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Contract Topic Flashcards

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1
Q

Key Terms

Contract

A

Set of promises which the law will enforce. For contrcat you will need an offer and acceptance. Offer is normally the starting point of an contract

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2
Q

Key Terms

Offer

A

A propsoal or promise showing a willingness to contract on firm and defenite terms

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3
Q

Key Terms

Invitation

A

An indication that one person is willing to negotiate a contract with another is not yet willing to make a legal offer

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4
Q

Key Terms

Reqeust for information

A

A general inquiry (Normally for price)

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5
Q

Key Terms

Bilateral Contract

A

Both the offer and offeree are required to do something

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6
Q

Key Terms

Unilateral Contract

A

An agreement to pay in exchange for a performance, if the potential performer chooses to act

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7
Q

Key Terms

Rejection

A

The offeree refuses the offer- this ends the offer

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8
Q

Key Terms

Counter-offer

A

A respone to a n offer which makes a firm proposal that materially alters the term of the offer

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9
Q

Key Terms

Acceptance

A

Final and unconditional agreement to all the terms of the offer

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10
Q

Ways an offer can be made

A

Person
Partnership
Company
Machiene

Thorton V Shoe Lane Parking

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11
Q

Offer

Ways an offer can end

A

Rejection
Counter Offer
Lapse of time (Ramsgate Victoria hotel)
Death

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12
Q

Acceptance

What must acceptance be

A

Positive and unqualified. Silence can not be accpetance

Felthouse V Bindley

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13
Q

Methods of communictaion

Postal Rule

A
  1. Only applies if post is the usual method and expected method of communication
  2. Letter must be properly adressed and stamped
  3. Offeree must be able to prove that the letter was posted

Adams V Lindsell

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14
Q

Acceptance

What happens when the letter is posted

A

The acceptance takes place as soon as it is posted

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15
Q

Acceptance

What happens when a message/email is sent

Electronic methods

A

The acceptance takes place when the message is opened

Entores
Thomas and gander V BPE

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16
Q

Consideration

A

Both parties give something to the other by way of exchange. This can be done by :
Executed consideration- An act in return for a promise
Executionary Consideration- Promise in return for a promise

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17
Q

Adequacy

Rule 1 Considertaion

A

Does not need to be adequate but must be sufficent.
Suffiency must be real

White V Bluett
Ward V Bytham

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18
Q

Past consideration

Rule 2 Condsideration

A

Past consideration is no consideration

McArdle

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19
Q

Promisee

Rule 3 Consideration

A

The consideration must move to the promisee

Tweddle V Aktinson

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20
Q

Pre-Existing duty

Rule 4 Consideration

A

Performing a Pre-existing duty can not be consideration for a new contract

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21
Q

Rule 4 Consideration

When can Pre-existing duty occur

A
  1. A duty is imposd by a public duty to act.
    * Police doing what they are required to do(Colins V Godfrey)
    * A duty under existing contract(Stilk V Myrik)
    * A promise to pay exisiting debt (Pinnel’s)
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22
Q

Consideration

Promissory Estoppel

A

If one party to an existing contrat agrees to vary the contract amd the other reies on that promise the promissor can go back on it.

Central London property Trust V high trees house

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23
Q

Consideration

Promissory Estoppel Limitations

A
  • Can not be used to found a new contract
  • Promisee must have relied to his or her detriment on the promise
  • It may suspend rights but not extinguish the rights of the promisor
  • Equitbale principle anyone relying on it muts have acted equitably(Builders V Rees)
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24
Q

Privity

What is privity of contract

A

Only those who are party to a contract are bound by it and can benefit from it. Based on the need for consideration to pass from promisee

Jackson V Horizon

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25
Q

Privity

What are the exceptions to Privity of Contract

A
  • Agency
  • Collateral damage
  • Contract( Rights of third parties
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26
Q

Privity

What is agency

A

One party is authroised to make a contract on behalf of another person. The principal will be bound

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27
Q

Collateral damage

A

This is subsidary contract which induces a person to enter into a main contract or which depends upon the main contract

Shanklin Pier V Detel

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28
Q

Privity

Contract ( Rights of third parties) Act 1999

A

Someone who is not party to the contract can enforce the contract against either or both the actual parties

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29
Q

Privity

Contract ( Rights of third parties) Act 1999. What needs to be shown to pass

A
  • Third party is expressly identified by name or as member of a class or awnsering or particular description
  • The contract expressly provides that a third party may enforce it
  • The contract term is an attempt to confer the benefit
30
Q

Privity

Intention to create legal relations- Business setting

A
  • Presumed in a business. Agreements presumtion can be rebutted
  • Deteremined by facts of the case objectivley
  • Content letters are not leaglly binding
31
Q

Privity

Intention to create legal relations- Domestic setting

A
  • Intention in not preusumed
  • Can be rebutted
  • if money changes hand it is more likely to be considered that parties had intention to create legal relations (Simpkins, Wilson V burnett)
32
Q

Consumer Contracts

A
  • Effects remedies- Term being breached will lead to a claim of breach of contract
  • A represenation if untrue will give rise to a remedy for misrepresentation
  • Decided by courts on case by case basis
33
Q

Consumer contracts

Factors in deciding

A
  • Importance attached to represenation- The more obviously important the more likely it is to be a term
  • Special knowledge/skill of person making statement
  • Time lag- Bigger the gap less likely it is to be a term
  • Whether there is a written contract- If there is, the court will assume everything the parties wanted as a term is included
34
Q

Consumer contracts - Types of terms

Condition

A

A term that is so important that failure to perform it would destroy the main point of the contract. Results in the person suffering the failure to end the contract by repudiation

Poussard V Speirs and Pond

35
Q

Consumer contracts

Innomiate term

A

A term that is not clearly a condition or a warranty. Result can be either that of a condition or a warranty depending on the severity

Hong Kong fir V Kawasaki

36
Q

Consumer contarcts

Warranty

A

A minor term - only damages can be claimed- contract does not end

Bettini V Gye

37
Q

Consumer contracts

What are terms implied by business efficacy

A

The courts will imply terms to ensure the contract works on business like basis

38
Q

Cosumer contracts

Officious by-stander test

A
  • Is term necessary to make the contract effective
  • If parties had thought about it would they have agreed that the term was obviously going to be a contract

(Shirlaw v Southern foundries) (Mans V BNP Paribas)

39
Q

Consumer contracts

Express and implied terms

A

Express terms are terms which have bneen specifcally agreed between the parties. Implied are not

40
Q

Counsumer contracts-Terms implied by common law

Custom

A

Terms must be veiwed in light of custom
Prior conduct may indicate the terms to be implied.

41
Q

Consumer contracts

Statute based implied terms

A

Business to business transaction- sale of goods act 1979/ supply of goods and services act 1982
Business to consumer transcation- Counsumer right act 2015

42
Q

Consumer contracts

Contract to supply goods

A
  • S.9- Satisfactory quality
  • S.10-Fitness for purpose
  • S.11- As described
    Remedies
  • S.20 Right to reject
  • S.23 Right to repair or replacement
  • S.24 Right to price reduction or rejection
43
Q

Consumer contracts

Contract to supply services

A
  • S.49 Reasonable care and skill
  • S.52 Within reasonable time
  • S.53 right to require repeat performance
  • S.56 Right to price reduction
44
Q

Exclusion Clauses

Types of exclusion clauses

A
  • Limit the value of a claim to the purchase price of the goods
  • Limit time for a defect to be discounted to 14 days
  • Exclude the rights of 3rd party beneficaries to bring a claim
  • Limit or exclude liablity for a breach of contract
45
Q

Exclusion Clauses

Basic Rules on interpreting contract

A
  • The contract should be considered as a whole to establish intentions of the parties
  • Interpretation is not an excat science the trend is for more purposive approach
  • If the words are clear and unambigious then they will be treated as representing the parties intentions
  • If they are not then an objective test is used
46
Q

Excluson clauses

What is the obejcetive test in basic rules interpreting contracts

A
  • Reasonable man interpret to be the meaning of the contract
  • Parties intentions may be shown by post contrcatual actions
  • Commericial practice and common sense will also be a guide
47
Q

Exclusion clauses- Common laws+ incorportaion

Common law controls incorporation

A
  • Is the agreement signed- If signed they are bound by it(L’estrange V Graucob)
  • If the effect of the clause is misrepresentaion by the party seeking the exclusion it would be interpreted in accordance with the misreprisentation(Curtis V Chemical cleaning and dying co)
  • Is any notice with the term in it incorportaed by reasonable notice- occurs when the exclusion are contained on a notice or form but the contract itself is unwritten
  • Introducing law later will fail (Olley V Marlborough court hotel)
  • Is any notice with the term in it incoporated by previous dealings of the parties- Needs to be consistent with dealings ( Hollier V Rambler Motors)
48
Q

Exclusion clauses

Reasonable notice

A
  • Must be contractual document distinct from the reciept (Barry)
  • Must be reasonable steps to draw the exclusion clause to the others partys attention (Parker)
  • Must be reasonable notice given before the conclusion (Olley,Thorton)
49
Q

How Common law controls the effect of exclusion clauses on third parties to contract

A

Exclusion clauses are ineffective for 3rd party who want to rely on them (Scruttons V Midland silicone)

50
Q

How common law controls Contra Profernten Rule

A

Where there is a doubt about the meaning of a term, the words will be constructed against the person who put them in the contract- Applies to exclusion clauses ( Transocean Drilling )

51
Q

What are the statutory control of exclusion clauses

A

UCTA 1977
Consumer Rights Act 2015

52
Q

What are the 3 Reasonableness tests

A
  • Knowledge Test
  • Test in relation to exclusions of the sale of goods act/ supply of goods act/ services act
  • Section 11(4)
53
Q

Exclusion Clauses- Reasonablness tests

Knowledge test

A

S.11(1) UCTA 1977- is the insertion of the clause reasonable in light of what was known by the parties at the time of the contract

54
Q

Exclusion Clauses- Reasonablness tests

Test in relation to the exclusions of the sale of goods/supply of goods/ Services act

A
  • Strength of bargaining position of the parties
  • Whether teh customer recevied an inducment to agree to the term
  • Whether the customer knew of existence and extent of the term
  • Where the term excludes or limits liability if some condition is not complied with, Whether it was reasonable at that time of the contract to expect that complaince with it would be practicable
  • Whether the goods were manufactured/processed or adapted to customer
55
Q

Exclusion Clauses- Reasonablness tests

S.11(4)

A

This relates to the limitation clauses
* The resources which the defendant could expect to be available for meeting his or her liabilty should it arise
* How far it was open to the defendant to cover him or herself by insurance against any successful claim

56
Q

Exclusion clauses

CRA 2015

A

Effect of s.31 and s.57
* s.31 states that you can not exclude liablity for: s.9,10,11,14,15
* S.57 prohibits excluding or limiting liabilty relating to the sale of services s.49,50,51,52

57
Q

Economic Duress

What are Vitating factors

A

These are things that make the contract void or voidable

58
Q

Economic duress

What is Economic duress

A

Contract made where one party is forced into it should not be valid. Threat to damage a business or person financially. Threats must be “ Improperly coercive”- though not neccserially unlawful

59
Q

Economic Duress

Undue Influnece

A

Pressure which deprived victim of independent judgement.It is presumumed where there is a relationship of trust one party will benefit at the exspense of another

Alcard V Skinner

60
Q

Economic Duress

Duress

A

Threats such as blackmail or violence to persuade the victim to sign

61
Q

Economic Duress Test

A
  1. Must be pressure
    * The effect of which is that there is a lack of pratical choice for the victim, which is illeegitimate and a significant cause inducting the claimant to enter the contract
  2. Evidnece that pressure was illegitamate can be
    * Did C Protest about pressure
    * Did C have any other available courses of action that were reasonable
    * After entering did C try to make contract Void
62
Q

Economic Duress

Remedies Economic Duress

A

Court can order an restitution of money extracted or property taken. And aslo the avoidance of any contract made under duress.
This is equitable and discretionary

63
Q

Economic Duress- Misrepresentation

What is Misrespresentation

A

This is a false statement ehich can be verbal or written but can also be an action

64
Q

Economic Duress- Misrepresentation

Misrepresntaion and silence

When Can silence be misrep

A
  1. Half truths
  2. Where parties relationship is based on trust
  3. If a statement has been made then there is a change ( making statement untrue) parties must be notified
  4. Inusrance contracts and contracts made in good faith
65
Q

Economic Duress- Misrepresentation

Misrepresentation and being material in fact

A

This must have led the person to make the contract and influence the mind of the person making it.
Can not be an opinon
Not future Intention

66
Q

Economic Duress- Misrepresentation

Misrepresenation and being a party to the contract

A

This can include a persons agent.
It can be avoided by Negligent Missastatement

Hedley Bryne V Heller

67
Q

Economic Duress- Misrepresentation

Misrepresentation and inducing other to enter contract

A

Must be a critical part of their decision making
Does not matter if they could have discovered the truth by taking reasonable steps

68
Q

Economic Duress- Misrepresentation-Omissions

Omissions in a consumer context

A
  1. S.12 the Pre-contractual information must be given to the consumer prior to the contract for it to be valid
  2. Any changes must be agreed expressly or it will be misrep
  3. Misleading omissions include
    * Not giving information needed to make an informed decisions
    * Hides or provides material information in an unclear or untimley manner
69
Q

Economic Duress-Types of Misrepresentation

Innocent

Misrep Act 1967

A

A false statement but one genuinley held on reasonable grounds
Remedy is recission or damages
Recission is equitable aims to pur in a position before Pre contractual position

70
Q

Economic Duress-Types of Misrepresentation

Negligent

A

A false statement made by a person who honestly believed the statement was true but had no reasonable ground for believing it was true
Misrep Act must show
* Misrep results in contract then suffers loss.
* Burden is on person making statement to show that there was reasonable grounds to make it

71
Q

Economic Duress- Types of misrepresentation

Fraudulent

A

This comes from the tort of decit.
Person making the represnatation knows it to be untrue, or is reckless as to whether it is untrue.

72
Q
A

Contract Law (4 decks)

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