contractual obligation Flashcards
what is contract law
binding agreement between parties
what are the legal elements of contract law
Offer - is a communication (verbal or in writing) amounting to a promise to do something (or not
do something) if the person to whom the offer is directed accepts the offer.
The Acceptance - is an statement (oral, written or by conduct) by person accepting the offer. An
offer may only be accepted by the person to whom it is directed and must show it is a valid
acceptance by also promising to do or not do something in exchange.
Intention – Is the intention to create a legal relationship by the parties.
The presence of consideration (offer & acceptance) usually demonstrates intention to form legal
relations. Attached to this intention is the presumption the parties are capable of forming legal
relations.
Consideration - the common law requires that, for an agreement to be binding, the offer and
acceptance must provide consideration (payment of some kind) for the promise they have
received. There has to be evidence both parties to the contract must receive a benefit
Certain and Complete - In Australian contract law, an agreement must be certain and
complete to be legally binding. This means that the terms of the contract must be clear
enough for the parties to understand their legal rights and obligations.
Mutuality - Mutuality of obligation is a contract law doctrine that requires both parties to a
contract to be bound to perform their obligations.
describe capacity and some circumstances where capacity may be an issue
ability to enter a contract legally
age
mental illness or intellectual disability
bankruptcy
intoxication
what is breach of contract
when a party to a contract fails to fulfil their obligations as agreed
ex- late payment, defective work, failure to deliver, anticipatory breach-When one party informs the other that they will not fulfill their obligations before they are
due. The non-breaching party can take legal action immediately., material breach-*A more serious violation of the contract, such as failing to provide a key element of the
contract. The contract is generally deemed to have ended, and the non-breaching party can
claim remedies.
name remedies for breach of contract
Specific performance: A court order that requires the breaching party to fulfill their
obligations
*Damages: Compensation paid to the non-breaching party
*Injunctive relief: A court order to prevent the breaching party from continuing the
breach
A breach of contract is not considered a crime or tort, and punitive damages are rarely
awarded.
what is invitation to treat
An invitation to treat is a request to make an offer, rather than an offer or a binding
contract. It’s a way to encourage someone to negotiate or make an offer, without being
obligated to accept it.
Some examples of invitations to treat include:
*Advertisements
*Catalogues
*Price lists
*Auction sales
*Tenders
*Items on display in a store
*Window displays
It is not practical to treat every advertisement as an offer. Give an example why?
describe warranty
A warranty in contract law is a promise or guarantee from one party to another that the
facts are true and reliable. A contractual warranty is a obligation that the facts that relate to
the subject of the contract are true. In the case that those facts ever become untrue, the
warranty is also a protection to the recipient to cover any losses that may arise
what are terms, conditions and clauses
Terms of a contract exist regardless of whether it is in writing or not: they are plainly
specific information (or knowledge) about the contract that the parties have agreed on. Eg/
I’m buying a blue car not a red one.
Clauses are what written contracts composed of. Eg. Part 1 Section 4.3.1 - the seller agrees
to….. Etc.
Conditions are terms that “any breach of which entitles the promisee to terminate the
performance of the contract” For example, a buyer might only be obligated to pay for a car if
it passes an inspection
what is the difference between valid or void illegal contract
valid is legally enforceable while void is not
what is ratification
ratification of contract is when all parties involved in a contract formally agree to it making it legally binding
what is repudiation
when a party to a contract indicates that they are unwilling or unable to fufill their obligations under the contract
what to do if someone breaches contract?
Document the breach: Collect evidence and prepare documentation
*Communicate with the other party: Discuss the breach and try to work out a
resolution
*Consider alternative dispute resolution: Try negotiation, arbitration, or mediation
*Seek legal advice: A lawyer can help you understand your rights and options
*Take legal action: You can sue for damages, seek an injunction, or request specific
performance
what are defences for breach of contract
Illegality: The contract violates the law or public policy, or is illegal in the place it was
made.
*Lack of capacity: One of the parties did not have the capacity to enter into the
contract. (drunk)
*Duress: One of the parties was under duress when they agreed to the
contract.(threatens to kick them out if they don’t sign)
*Undue influence: One party exerted undue influence over the other party. (A carer who
convinces an elderly patient to sign a contract that benefits the carer)
*Misrepresentation: One party misrepresented the terms or conditions of the
contract. (luminosity, Red Bull, Volkswagon, Mitchell v Valherie)
*Impossibility, impracticability, or frustration of purpose: The breaching party could
not perform their obligations due to factors beyond their control.
