Contracts Flashcards
What are the three basics requirements for a contract
Offer
Acceptance
Consideration
What type of contracts MUST be in writing
Guarantee
Sale of Land
Consumer Credit Transactions
What is a deed
Document that makes it clear on its face that it is a deed
Examples of deeds
Promise to make a gift (giving without consideration)
Conveyance of a land
Deeds must be
Executed in the presence of a witness
Delivered to be effective
Claim under a simple contract must be brought within…
6 years
Claim under a deed must be brought within…
12 years
The terms of the offer must be…
Definite and Certain
Does requesting information constitute an offer?
No
What is an invitation to treat?
Words or conduct to invite the other party to make an offer
What offers cannot be revoked?
Collateral contract was made
Unilateral contract where the offeree has began performance
Bilateral contract where the offeree has accepted the contract by beginning the performance
What is the effect of a counter offer?
The effect is a rejection of the original offer
How is an offer for a unilateral contract accepted?
completion of the requested act
Postal rule
acceptance by post creates a contract at the moment of posting (letter is properly addressed and stamped) - unless otherwise stated by offer
What is a consideration?
Act or forbearance
or
A promise to act or forbear
What is an illusory consideration?
consideration offered has no value
When is a promise to accept part of a debt valid?
Debt was disputed in good faith
Claim was unliquidated (uncertain)
Payment is at a different place or time or by different means
A composition of creditors
For promissory estoppel to apply…
there must be a promise not to rely on existing legal rights,
promisee must have detrimentally relied on the promise by altering their position
it would be inequitable for the promisor to go back on their promise
What is a representation?
A statement which induces someone to enter a contract
What is a term?
A statement of law or fact which is part of the contract
What are the types of contract terms?
Warranties or conditions
Express or implied
What is a condition?
Term that is so fundamental
It goes to the root of the contract
Remedy for breach of condition?
Termination + Damages
What is a warranty?
a term that is incidental or collateral to the main terms
Remedy for breach of warranty?
Damages
What is an innominate term?
not clear whether the term is a condition or warranty
What is the Parol Evidence Rule
External evidence cannot add to, subtract from, contradict or vary the terms of a written contract
What are the implications of the Sale of Goods Act 1979
Seller has right to sell goods
Goods match the description applied by the seller
Goods are of satisfactory quality
Goods are fit for any special purpose
The condition of title cannot be excluded
Exclusions of the implication of the Sale of Goods Act 1979 and the Supply of Goods and Services 1982 must be…
Reasonable
What are the implications of the Supply of Goods and Services Act 1982?
An innominate term - the supplier will carry out the services in a reasonable time and with reasonable skill and care
similar implications to the SGA 1979
The implications of Consumer Rights Act 2015
Seller has title
Goods comply with description
Quality
Fitness for purpose
Can the terms under the CRA 2015 be excluded or limited?
Not at all
When will a court imply a term into a contract?
Only when it is necessary to give the contract business efficacy
What is a defence against an exclusion clause?
An oral misrepresentation
What is the defence of non est factum?
The party can show they had no understanding of the contract they signed and there is a fundamental difference between what they thought they signed and what they actually signed
Exclusion clauses can be incorporated by notice if….
the party relying on it took reasonable steps to bring it to the other party before or while the contract was being made
What is the contra proferentem rule?
An ambiguous exclusion clause is interpreted against the party seeking to rely on it
What clauses are void under the Unfair Contract Terms Act 1977
Exclusion of liability for death caused by negligence
Exclusion of liability for breach of condition of title
What clauses are void under the Unfair Contract Terms Act 1977 UNLESS reasonable
Exclusion of liability for loss caused by negligence
Exclusion of liability for obligation of compliance with description, quality, or fitness
When is a term unfair under the CRA 2015?
If the term is contrary to good faith or causes significant imbalance
What is a common/identical mistake?
Both parties made the same mistake
What is a mutual mistake?
Parties are mutually and reasonably mistaken about different things - the agreement was ambiguous
When does a unilateral mistake make the contract void?
If the other party was aware of the mistake
What are examples of voidable contracts?
Contract in reliance on a misrepresentation
Contracts entered into by minors (other than necessities)
Duress
Undue influence
Undue influence is presumed in the following cases:
parent and child
solicitor and client
guardian and ward
medical adviser and patient
What is rectification?
The court will allow the written contract to reflect the oral agreement where the written contract mistakenly does not reflect the oral agreement
Silence can be actionable misstatement if…
Contracts uberrimae fidei (utmost good faith)
Partial disclosure is misleading
Earlier representation has become untrue
What are the types of misrepresentation?
Fraudulent misrepresentation
Negligent misrepresentation
Innocent misrepresentation
What are the remedies for misrepresentation?
Contracts are voidable - innocent party may rescind the contract or seek damages
Rescission is not available if…
Affirmation
IP waits so long that the other party would be harmed
impossibility to restore parties to their pre-contract positions
bona fide third-party purchaser has gained rights
Damages for fraudulent misrepresentation
if IP can prove it was fraudulent
Damages for negligent misrepresentation
If other party cannot disprove negligence
When does a judge grant damages in lieu of rescission
for innocent and negligent misrepresentation
Measure for damages for misrepresentation
losses incurred as a result of entering into the contract + incidental expenditure
Measure for damages for breach
seeking to put the IP in the position they would have been in had the contract been performed as promised
What is a discharge of the contract?
terminating the remaining duties of the parties under the contract
accrued rights remain in place
What is a waiver?
a promise not to enforce the other party’s obligations - the waiving party has the right to reinstate the original obligation by giving a reasonable notice unless the other party determinately relied on the waiver
What is frustration?
a contract is discharge if after the contract is made an event occurs that makes performance as originally agreed with impossible or radically different
Frustration for radically different performance requires that…
the difference is fundamental to the contract
AND
Has not been considered by the parties when they made their contract
Rules of frustration do not apply to contracts of…
insurance contracts
and
contracts including a force majeure clause
What is the purpose of damages?
TO put the IP in the position in which they would have been in if the contract had been performed
A party that has suffered no damages may recover only…
nominal damages
What are the types of damages?
Expectation damages / loss of bargain
Reliance damages
Nominal damages
What is an example of damages for injury to feelings?
contract where the sole purpose was enjoyment - the provision of a holiday
When is the duty to mitigate not applicable?
claim for a debt
What is a liquidated damages clause?
allows an innocent party to recover a specified amount for breach of contract without having to prove their loss
When is a liquidated damages clause not enforceable
when the value amounts to a penalty
What is an indmenity
promise to accept responsibility if someone else does not perform an obligation or a promise to make good all the other party’s losses arising from a breach of contract
What is a guarantee
a promise to perform an obligation instead of the person in the primary contract
- in writing
- if obligations under the primary contract are discharged, it will cease
When is specific performance order granted?
When money damages are inadequate
When is specific performance order not granted?
When it would cause undue hardship
person relying was unreasonable in delaying the remedy
Additional rights granted by the CRA 2015?
Right to reject defective goods within 30 days from supply
right to require the trader to repair or replace item at trader’s expense
right to require the trade to reduce the price, or right to reject the goods in return for a refund
What is a restitution?
sought to prevent unjust enrichment
Quantum meruit
restitution in relation to services - monetary award
Quantum valebat
restitution in relation to goods - reasonable payment for the value of goods
