Core Principles of Contract Law

Question 1

What are key elements for formation of contract?

Answer 1

1) Agreement (offer and acceptance)
2) Intention and capacity (intention to create legal relations)
3) Consideration

Question 2

How can express terms be incorporated?

Answer 2

Orally or in writing

Question 3

What can you look at when determining if something is implied in fact?

Answer 3

Trade customs, conduct of parties, course of dealings

Question 4

What is implied in law?

Answer 4

By court or statute

Question 5

How does a contract come to an end? (5)

Answer 5

1) Performance
2) Agreement
3) Breach
4) Frustration
5) Discharge by expiry

Question 6

What is frustration?

Answer 6

Impossible to perform due to total or partial destruction of object necessary

Or

An event fundamental to contract does not occur

Question 7

What is a condition?

Answer 7

An important term going to the root of the contract

Question 8

What is a warranty?

Answer 8

A less important term not going to the root of the contract

Question 9

What are the main remedies available?

Answer 9

1) Unliquidated damages
2) Liquidated damages
3) Equitable remedies

Question 10

What are unliquidated damages?

Answer 10

Compensatory principle (make good of Claimant’s Losses and nothing else, put C into position had contract not been breached)

Question 11

What are liquidated damages?

Answer 11

A pre-agreed sum serving as fixed compensation

Question 12

What are equitable remedies?

Answer 12

Specific performance, injunctions

Question 13

When is a principal responsible for act of agent?

Answer 13

• If agent acts in actual authority (express or implied)
• If agent acts outside actual authority but within his apparently authority

Question 14

How can a contract be executed?

Answer 14

Simple contract or by a deed

Question 15

When is a deed needed?

Answer 15

• Land transaction
• 12 years limitation period rather than 6