Contracts

Question 1

Under the postal rule, when is a contract created by mail?

Answer 1

A contract is created at the moment of posting under the postal rule.

Question 2

When is rejection of an offer effective?

Answer 2

Rejection is effective when received by the offeror.

Question 3

What must an offeree do to validly accept an offer?

Answer 3

The offeree must communicate their acceptance to the offeror.

Question 4

What is illusory consideration?

Answer 4

Illusory consideration, such as a promise to stop complaining, is insufficient in the eyes of the law.

Question 5

What happens if an offer prescribes a specific method of communication?

Answer 5

The prescribed method should be used unless the alternative method is no less disadvantageous to the offeror.

Question 6

Can leaving an answerphone message replace a prescribed email as acceptance?

Answer 6

No, if there’s no guarantee the offeror will listen to the message, it is not an adequate alternative to an email.

Question 7

What happens to a unilateral contract once performance begins?

Answer 7

It cannot be revoked or withdrawn once performance has started.

Question 8

What does ‘subject to contract’ mean?

Answer 8

Parties agree in principle, but they do not intend to be contractually bound until a formal contract is entered into.

Question 9

How do courts usually interpret advertisements?

Answer 9

Courts typically view advertisements as invitations to treat, not offers. However, price quotations may be considered offers if in response to a specific inquiry.

Question 10

Is part payment of a debt sufficient to settle the full amount?

Answer 10

No, part payment alone is not sufficient consideration. Exceptions exist where an additional benefit is conferred, such as payment by another method.

Question 11

What happens when a contract is frustrated?

Answer 11

The contract is automatically discharged, and neither party can sue for damages under it (though the LRFCA may apply).

Question 12

Can statutory terms be excluded under the CRA 2015?

Answer 12

No, exclusions of implied statutory terms under the Consumer Rights Act 2015 are prohibited and void.

Question 13

What happens if goods are not fit for the purpose made known to the merchant?

Answer 13

It breaches the condition of fitness, regardless of the trader’s beliefs.

Question 14

What is required for the conveyance of land?

Answer 14

The actual transfer of land must be executed by deed, not merely a contract for the sale of land.

Question 15

How do courts handle ambiguous contract terms?

Answer 15

The court will classify an unclear term as an innominate term and assess the effect of the breach to determine remedies.

Question 16

What determines if a breached term is treated like a condition or warranty?

Answer 16

The court considers if the breach deprives the innocent party of substantially the whole benefit of the contract. If so, it is treated as a condition; otherwise, as a warranty.

Question 17

When does the postal rule doesn’t apply?

Answer 17

Where the offer states that acceptance will not be effective until received.

Question 18

What is defence of laches?

Answer 18

Laches is available as an equitable defence if the innocent party has unreasonably delayed in bringing the action and the delay is prejudicial to the other party.

Question 19

What is the doctrine of waiver?

Answer 19

Generally, for a variation of a contract to be enforceable, it must be supported by consideration to be enforceable. However where a party promises not to enforce the other party’s obligation, the courts may conclude that the agreement is at least temporarily effective through waiver. The waiving party can reinstate the original obligation. However, they must give reasonable notice.

Question 20

Who can rely on exclusion of liability clause under the Contracts (Rights Against Third Parties) Act 1999?

Answer 20

Third parties named specifically or by group, and it appears the term was intended to be enforcable by the third party

Question 21

in which circumstances a court will find a contract void due to a common mistake?

Answer 21

the existence of the subject matter (as opposed to its quality)

Question 22

When is a unilateral contract void?

Answer 22

when the non-mistaken party knew or should have known of the mistake when the contract was formed.

Question 23

What test is used by courts for implying terms into the contract?

Answer 23

Business efficacy test - to make the contract work as intened (not whether it is reasonable to imply)

Question 24

When will a contract be discharged of frustration?

Answer 24

1. subject matter illegal 2. death 3. subject matter destroyed 4. radically different performance, difference must be fundamental

Question 25

When a promise to accept part of a debt as full payment is enforceable?

Answer 25

1. Payment by different means
2. A composition of creditors agreeing to take less
3. Payment of debt by third party
4. The debt was disputed (uncertain value)
5. The amount claim is uncertain
6. Earlier payment

Question 26

What is a promissory estoppel?

Answer 26

Substitue for consideration. Terms: 1. promise not to rely on existing legal rights 2. the promisee detrimentally relies on it 3. it’s unfair to go back on the promise

Question 27

How are terms implied in a contract?

Answer 27

1. By statute
2. By court
3. By custom and usage
4. Course of dealings between parties

Question 28

Which Statutes imply terms?

Answer 28

Sale of Goods Act (1979) - B2B
Supply of Goods and Services (1982) - B2B
Consumer Rights Act (2015) - B2C

Question 29

Which Conditions are implied under the SGA (1979)?

Answer 29

1. Seller has right to sell the goods
2. The goods match the desctiption by the seller
3. The goods are of satisfcatory quality (fit for purpose)
4. The goods fit for special purpose they told the buyer

דוגמא לזכירה: לאבי ספרים היה זכות למכור ספרי פסיכומטרי, הם תואמים את התיאור שלו שזה ספרי פסיכומטרי, הם מתאימים ללימוד, והם גם מתאימים למטרות אחרות.

Question 30

Which Conditions are implied under the SGSA (1982)?

Answer 30

1. For services - service will be cariied in reasonable time , care and skill (innominate term)
2. ForSupply of Goods - as SGA 1979

Question 31

Which Conditions are implied under the CRA (2015)?

Answer 31

1. Supply of Services - Reasonable care, price, timeand in accordance with information the consumer relies on (prices)
2. Supply of Goods - as SGA 1979

Question 32

Which Condition under the SGA (1979) cannot be excluded?

Answer 32

Condition of title

Question 33

Which Condition under the SGA (1979) can be excluded?

Answer 33

None

Question 34

What is NON EST FACTUM?

Answer 34

If a party can show they had no understanding of the contract they signed and there’s a fundamental difference between what was signed and what they thought, it’s an overriding defence for the party

Question 35

How do you incorporate an exclusion to contract?

Answer 35

1. Expressly
2. By notice (before or whilst)
3. By industry custom

Question 36

What is autmotically void under the Unfair Contract Terms Act (1977)?

Answer 36

1. Excluded liabiliy of death caused by negligence
2. Implied condition to title under SGA (1979)/SGSA (1982)

Question 37

What is void unless reasonable under the Unfair Contract Terms Act (1977)?

Answer 37

1. Excluded liabiliy of loss (not death) caused by negligence
2. Standard form excluding liability for breach/right to rendering performance different from what was expected/negates duty to render performance at all
3. Breach of all other conditions except title under SGA (1979)/SGSA (1982)

Question 38

For what reasons is a contract void?

Answer 38

1. Illegality at formation (by statute/contrary to morality/institution of marriage/damaging government/interferes with justice/non compete clause)
2. Mistake

Question 39

For what reasons is a contract voidable?

Answer 39

1. Misrepresentation
2. Duress (of person/economic, not goods)
3. Undue influence
4. Minors/Mental capacity (re mental - only if the other party knew)

Question 40

To whom the Unfair Contract Terms Act (1977) applies?

Answer 40

deals with business-to-business transactions