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intro to contract Flashcards

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1
Q

what are the 4 requirements of a contract

A
  1. offer
  2. acceptance of that offer
  3. consideration
  4. intention to create legal relations
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2
Q

offeror

A

person making the offer

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3
Q

offeree

A

person to whom the offer is made

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4
Q

what is an offer

A
  • statement of the terms by which the offeror is prepared to be bound
  • all that is required from the offeree is an acceptance
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5
Q

why must an offer be certain

A

so that if it is accepted both parties know what they have agreed to

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6
Q

what is an invitation to treat

A
  • an invitation to someone to make an offer

- leaves the person who issued the invitation able to decide whether or not to accept any subsequent offer

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7
Q

what can offers be accepted to form (ITT cannot)

A

a contract

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8
Q

how does an offer indicate that no further negotiations are needed

A

the offeror intends to be bound by an acceptance of his/her terms

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9
Q

an invitation to treat is a statement which shows willingness as to what?

A

enter into negotiations or is art of the continuing negotiation process

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10
Q

what will whether a statement is an offer/ITT depend on

A

the circumstances

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11
Q

which case illustrates that displays of goods in shop windows are ITT

A

fisher v bell

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12
Q

principle in fisher v bell

A

although the shop keeper was displaying a flick knife in his window with a price tag, the court decided that this amounted to an ITT and not an offer for sale

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13
Q

which case illustrates that goods on display in supermarkets and self service stores are ITT

A

PSGB V boots

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14
Q

PSGB v boots

A

display of some drugs would be illegal if it was an offer

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15
Q

which case illustrates that advertisements in magazines, catalogues, newspapers and online are ITT

A

partridge v crittenden

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16
Q

partridge v crittenden

A

an advert in a magazine to sell wild birds was an ITT and not an offer for sale

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17
Q

which case illustrates that auction sales are ITT

A

payne v cave

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18
Q

payne v cave

A

it was held that an auctioneer asking for bids was not making an offer, it was an invitation to treat. offer is made by the bidder and the auctioneer is free to accept/reject it

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19
Q

which case illustrates that responses to requests for info are ITT

A

Harvey v facey

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20
Q

Harvey v facey

A

fs response ‘lowest cash price for bumper hall pen £900’ was not an offer but merely a statement of the price and an invitation to treat. so when f refused to sell to h at that price he was not in breach of contract

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21
Q

if an offer is made to one person or a group of people, who can accept it?

A

only by that person or group

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22
Q

if an offer is made to the whole world eg for offer of a reward, who could it be accepted by

A

anyone who does what is set out in the reward poster

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23
Q

which case involves a reward advertisement

A

CARLILL V CARBOLIC SMOKE BALL CO

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24
Q

CARLILL V CARBOLIC SMOKE BALL CO

A

the court decided that because of the sum of money set aside, and the fact that the advert was clear to what conditions had to be fulfilled to be entitled to the £100, the advert was an offer to the whole world and c was entitled to the reward

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25
Q

what do vending machines and automatic ticket machines make

A

standing offers

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26
Q

thornton v shoe lane parking

A

an automatic machine which issued tickets on entry to a car park made a standing offer which was accepted by a motorist putting money into the machine

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27
Q

what can a person not accept in relation to offers

A

what he/she does not know about

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28
Q

what must an offer be to come into existence

A

communicated

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29
Q

when will an offer made in writing be communicated

A

when it is received and read by the offeree eg carlill

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30
Q

when will an offer made orally be communicated

A

when it is heard by the offeree

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31
Q

when will an offer made by conduct be communicated

A

when it is seen by the offeree

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32
Q

what is an acceptance

A

unconditional agreement to all the terms of the offer by words or conduct

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33
Q

what must be clear if the acceptance is by conduct

A

that the offeree did the required conduct with the intention of accepting the offer

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34
Q

who must an acceptance be by

A

the offeree

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35
Q

why cant another person who hears the offer being made try to accept it

A

the offer was not to them

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36
Q

when can anyone accept an offer

A

if it is an offer to the whole world (carlill)

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37
Q

how must an offer be accepted if the offeror sets out a specific way for the offer to be accepted

A

only that method will do

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38
Q

which case states that if the offeror sets out a specific way for the offer to be accepted, only that method will do

A

eliason v henshaw

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39
Q

eliason v henshaw

A

the court held that post wasn’t a valid acceptance as it had not been communicated by the manner specified by E

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40
Q

if there is no specified way of communicating the acceptance then which method will do

A

any, as long as its effective

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41
Q

if the offeree uses a phone to accept the offer and just as he says he accepts the signal is lost and the offeror doesn’t hear, is it an effective acceptance?

A

no

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42
Q

is mere rumour of acceptance enough?

A

no

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43
Q

who must the acceptance be communicated to usually

A

to the offeror or to someone whos acting on behalf of the offeror

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44
Q

is silence sufficient for accepting an offer?

A

no, a positive act is required

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45
Q

which case illustrates that silence is insufficient in acceptance of an offer

A

felthouse v bindley

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46
Q

felthouse v bindley

A

it was held that as B had not communicated acceptance of the offer, there was no contract

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47
Q

which is the rule on acceptance by modern methods of communication

A

acceptance is immediate as long as its communicated

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48
Q

entores v miles far east corporation

A

the court held that acceptance by telex machine was made when the telex was received

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49
Q

brinkibon v stahag

A

the court held that the acceptance took effect at the start of the next working day

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50
Q

exception to the rule that acceptance must be communicated involving which type of unilateral contracts

A

unilateral contract whereby one party promises to pay the other a reward if the other party does a certain act eg carlill

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51
Q

where it is clear that parties expect use of post to accept an offer, what does the postal rule maintain

A

acceptance takes place the moment the letter of acceptance is posted by the offeree: ADAMS

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52
Q

under which case is it illustrated that acceptance takes place the moment the letter of acceptance is posted by the offeree

A

adams v linsell

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53
Q

which case states that is doesn’t matter if the letter of acceptance is lost in the post

A

household fire insurance v grant

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54
Q

when can an offer be brought to an end

A

at any point before acceptance

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55
Q

how can an offer come to an end by rejection

A
  • once refusal of an offer has been communicated to the offeror, the offer has ended
  • offer cannot be accepted later if the offeree changes mind
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56
Q

when can an offer by withdrawn by the offeror

A

at any time before it has been accepted

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57
Q

when must the withdrawal/revocation of an offer be communicated to the offeree

A

whilst the offer is still open

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58
Q

which case demonstrates revocation

A

byrne v van tienhoven

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59
Q

byrne v van tienhoven

A

the court held that the revocation was on the 20th oct when the letter arrived

so the offer was still in existence on 11th oct when the claimants accepted it and there was a contract between the parties

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60
Q

what is a counter offer

A

a response introducing new terms, rather than accepting all the terms of the original offer

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61
Q

how can an offer come to an end if a counter offer is made by the offeree

A

counter offer will kill off the original offer so that it cannot be subsequently accepted by the offeree

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62
Q

which case relates to counter offers

A

hyde v wrench

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63
Q

hyde v wrench

A

it was held that there was no contract. all the terms of an offer must be accepted and an attempt to change any of them becomes a counter offer. Hs counter offer of £950 killed off ws original offer so it could not be accepted

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64
Q

when does an offer exist if the offeror sets a time limit for the acceptance of the offer

A

only exists during the set times

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65
Q

for how long will the offer remain open where no time limit is specified

A

for a reasonable amount of time

what is considered reasonable will depend on the circumstances

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66
Q

which case illustrates that offers can end by lapse of time

A

Ramsgate Victoria hotel v montefore

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67
Q

Ramsgate Victoria hotel v montefore

A

it was held that there was no contract. the offer had lapsed because an excessive amount of time had passed

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68
Q

how can an offer come to an end by a specified event

A

an offer which is stated to come to an end if a certain evnt occurs cannot be accepted after that event has actually taken place

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69
Q

how can an offer come to an end by death of the offeror

A

an offeree cannot accept an offer once he/she knows that the offeror has died

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70
Q

when can an offer still be accepted once a offeror has died

A

the offer may not end and can still be accepted if the offeree is ignorant of the death and it is a contract for the sale of goods

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71
Q

when can an offeree ignorant of the offerors death not accept an offer

A

if it is a contract for the performance of personal services

72
Q

what is consideration

A

the element of exchange in a bargain

73
Q

currie v misa

A

for there to be a contract, both parties must contribute something that is real and of some actual value to the agreement

74
Q

executory consideration

A

exchange of promises by parties to do something in the future

75
Q

what can either party do in the event of the other not doing what it has promised in executory consideration

A

sue the other

76
Q

executed consideration

A

in unilateral contracts, where the offeror is under no obligation until the offeree performs his/her part of the agreement eg carlill

77
Q

for there to be consideration, what must be given by both parties

A

something real, tangible and of some actual value- WHITE V BLUETT

78
Q

WHITE V BLUETT

A

the promise made by the son was not offering anything of real value/substance to the bargain

79
Q

consideration need not be?

A

adequate or match the ‘value’ put in by the other person- chappell and co v nestle co

80
Q

CHAPPELL AND CO V NESTLE CO

A

it was held that the 3 wrappers were part of the consideration, even though on receipt the wrappers were thrown away

81
Q

a person to whom a promise is made can only enforce the promise if he himself provides consideration for what?

A

that promise (consideration must move from the promisee)- TWEDDLE V ATKINSON

82
Q

TWEDDLE V ATKINSON

A

the groom unsuccessfully sued the deceased’s estate for the money because consideration had not moved from the groom

83
Q

when must consideration come

A

after the agreement, rather than being something that has already been done. it must not be past- RE MCARDLE

84
Q

RE MCARDLE

A

there was no contract because the repairs had been done before the agreement was made

85
Q

a basic requirement of a valid contract is that at the time the parties make their agreement they must intend it to be…

A

legally binding

86
Q

what do the courts have to help them decide whether an agreement was intended to be legally binding

A

a rebuttable presumption for business/commercial agreements and a rebuttable presumption for social/domestic agreements

87
Q

what do the courts start by presuming if the agreement is a business one

A

that the agreement was intended to be legally binding- ROSE FRANK CO V CROMPTON BROS

88
Q

ROSE FRANK CO V CROMPTON BROS

A

it was held that the words ‘this agreement is not entered into as a formal/legal agreement and shall not be subject to legal jurisdiction in the law courts’ made it clear that the parties had not intended their agreement to be a legally binding contract

89
Q

what did the courts hold that using the words ‘binding in honour only’ means

A

that the agreement is not intended to be legally binding

JONES V VERNON POOLS

90
Q

JONES V VERNON POOLS

A

the courts held that such a statement on a football pools coupon meant that it was not legally binding

91
Q

what is presumed where free gifts/prizes are promised

A

the parties intended to enter into a legally binding contract

92
Q

why is it presumed that the parties intended to enter into a legally binding contract where free gifts or prizes are promised

A

because the purpose is generally to promote the commercial interests of the body offering the gift/prize

93
Q

what do the courts start by presuming where the agreement is between family members

A

it was not intended to be legally binding- BALFOUR

94
Q

BALFOUR

A

it was held that it was a purely domestic agreement and the parties, when the agreement was made, did not intend it to be a legally binding contract

95
Q

when is the presumption that domestic agreements are not intended to create legal relations rebuttable

A

if one of the parties can show the agreement was intended to be legally binding then it will be a valid contract- MERRITT

96
Q

MERRITT

A

the court held that when the agreement was made, the husband and wife were no longer living together, and that this, together with the written promises, meant that they must have intended the agreement to be legally binding. the agreement was made in a business context

97
Q

when is the presumption that social agreements are not intended to create legal relations rebuttable?

A

if one party can show the agreement was intended to be legally binding, it will be a valid contract- this will be so if money has changed hands

98
Q

when is a party said to be in breach of contract

A

when it without lawful excuse fails to perform an obligation under a contract

99
Q

what are the two types of breach

A

actual and anticipatory

100
Q

when does an actual breach occur

A

where performance of the contract is due but one arty either fails to perform their side or performs it poorly

101
Q

what do the remedies for actual breach of contract depend on

A

the nature of the term broken

102
Q

what is a breach of warranty

A

a breach of a minor terms that doesnt go to the root of the contract and only gives rise to the claim for damages

103
Q

which case illustrates breach of warranty

A

bettini v gye

104
Q

bettini v gye

A

this was a breach of warranty so the employer was not entitled to end the contract

missing rehearsals didn’t go to root of contract, it was merely an inconvenience to the employer

b entitled to damages because contract was wrongfully brought to an end by g

105
Q

what is a breach of condition

A

a breach of an important term, giving the innocent party right to end the agreement and claim damages

106
Q

which case illustrates breach of condition

A

pousard v spiers

107
Q

pousard v spiers

A

missing opening night was serious enough to be a breach of condition and s was entitled to end the contract

108
Q

when does an anticipatory breach occur

A

where one party is due to perform their part of the contract in future and, before the date for performance, they make it clear by words or conduct that they will not be performing the contract

109
Q

what two choices does the innocent party have in anticipatory breach

A

they can accept the anticipatory breach

they can choose to continue with the contract even though they know that the performance is not wanted by the other party

110
Q

what can the innocent party do if they accept the anticipatory breach

A

immediately treat the contract as at an end and sue for damages

111
Q

which case illustrates accepting anticipatory breach

A

HOCHESTER V DE LA TOUR

112
Q

HOCHESTER V DE LA TOUR

A

h was entitled to sue the defendants straight away. he did not have to wait until the contract was due to be performed

113
Q

what can the innocent party claim for if they choose to continue with the contract despite anticipatory breach

A

they can claim for loss caused after the other party breached the contract

114
Q

which claim illustrates continuing with the contract despite anticipatory breach

A

WHITE AND CARTER V MCGREGOR

115
Q

WHITE AND CARTER V MCGREGOR

A

it was held that w was entitled to full payment for 3 years of advertising as a debt

116
Q

what could the parties try as an alternative to the civil courts in solving a claim for breach of contract

A

ADR which includes negotiation, mediation, conciliation and arbitration

117
Q

why is negotiation often the most common method of resolving contract disputes

A

its completely private, least formal method of ADR

if lawyers aren’t used its also quickest and cheapest

118
Q

what will be the only way to remedy breach of contract is the other party denies liability/refuses to use ADR

A

to start a court case

119
Q

what will the court used depend on

A

the amount being claimed

120
Q

where are cases started where the amount claimed is up to £100,000

A

county court

121
Q

which courts can the claimant choose between where the amount claimed is over £100,000

A

county court of QBD of high court

122
Q

which form must a claimant complete for either court

A

an N1 form and take it to the relevant court office

123
Q

which fee has to be paid and what does it vary according to

A

a court fee for issuing the claim has to be paid

it varies according to how much the claim is for

124
Q

where will the court send the N1 form and what opportunity are the recipients given

A

to the defendant

they are given the opportunity to admit the claim and pay damages/ defend the claim

125
Q

what must the defendant send to the court if they choose to defend the claim

A

either an acknowledgement of service/ a defence to the court within 14 days of receiving the claim

126
Q

if the defendant wishes to make a counterclaim against C what should it follow on from

A

the defence in the same document

127
Q

once a claim is defended what will a judge in a relevant court do

A

allocate the case to the most suitable track/way of dealing with the case

128
Q

what is completed by both parties to help the judge decide which track to allocate the case to

A

an allocation questionnaire

129
Q

what kind of disputes does the small claims track hear

A

those under £10,000

130
Q

who are small claims track disputes heard by

A

district judge in the county court

131
Q

in what format are cases usually heard on the small claims track

A

-usually heard in private and informal

132
Q

what part will the district judge play in small claims cases

A
  • active part in proceedings

- asking questions and making sure both parties explain all their important points

133
Q

why are lawyers often not used in small claims track cases

A
  • use of lawyers discouraged
  • public funding not available to pay for lawyers
  • cost of using lawyers cannot be claimed from losing side
134
Q

which cases use fast track

A

straightforward disputed £10,000-£25,000

135
Q

who hears fast track cases

A

either district or circuit judge in county court- formal procedure

136
Q

why does the court set down a strict timetable for pre trial matters in fast track cases

A

to prevent one/both sides from wasting time and running up unnecessary costs

137
Q

what are fast track trials themselves limited to

A

one day

138
Q

how are lawyers used in fast track

A
  • they can only charge a certain amount

- legal aid may be available

139
Q

which cases is the multi track for

A

claims over £25,000/ complex cases under amount

140
Q

who are multi-track cases heard by

A

either in county court by circuit judge/high court by high court judge

141
Q

from which point will the relevant judge ‘manage’ a multi-track case

A

from the moment it is allocated to the multi-track route

142
Q

why is there case management conference for multi-track cases

A

to check everything is proceeding to plan

143
Q

what is encouraged in multi-track cases

A

ADR

144
Q

why are timetables fixed and directions given in multi-track

A

to ensure that any trial proceeds quickly and efficiently

145
Q

is legal aid available for multi-track

A

may be

146
Q

who is the burding of proving the case on for multi-track cases

A

the claimant

147
Q

what does the claimant have to prove to win the case

A

that there was a contract and that is should be enforced/that there was a breach of contract

148
Q

what is the standard of proof and what does this mean

A

balance of probabilities- judge decided who is most likely to be right

149
Q

what does the claimants counsel (barrister) do at first if the case reaches trial

A

opens the case and calls evidence- claimant may give evidence if he/she wishes

150
Q

what is each witness’ statement entered as if the case reaches trial

A

their evidence in chief

151
Q

who may witnesses be orally cross-examined by and why

A

by the defendant and re-examined by the claimants counsel to resolve any ambiguity

152
Q

what does the counsel for the claimant put forward after the witness’ have been cross-examined

A

any arguments on points of law

153
Q

how does a defending counsel then call evidence (after claimaints evidence has been delivered)

A

in the same way

puts forward any arguments on points of law

counsel for claimant may reply

154
Q

what must the judge decide when both counsels have spoken

A

if the claim has been proved or not

155
Q

what will the judge decide if the claimant wins

A

how much to award the claimant for the breach of contract/ whether another remedy should be awarded

156
Q

what is the aim of awarding damages

A

to place the claimant in the same position as if the contract had not been broken. the court is compensating the claimant for their loss- aim is not to punish the defendant

157
Q

what must the breach of contract be for loss to be claimed

A

it must be a cause of loss to the claimant, but it doesn’t have to be the only cause

158
Q

will the defendant still be liable for the loss if it arises partly from breach and partly from intervening events

A

provided that the chain of causation isn’t broken

159
Q

which case illustrates that breach doesn’t have to be the only cause of loss of claimant

A

STANSBIE V TROMAN

160
Q

STANSBIE V TROMAN

A

it was held that the decorator was liable for the loss of property as it had resulted from his failure to comply with his contractual duty to secure the house on leaving

didn’t matter that the thief was also a cause of the loss- chain of causation not broken by intervention of a third party

161
Q

which loss does the law not allow a claim for

A

loss which is considered to be too remote a consequence of the breach

162
Q

which case illustrates that loss which is considered to be too remote a consequence of the breach is not allowed for by the law

A

Hadley v baxendale

163
Q

Hadley v baxendale

A

it was held that as B didn’t know the mill couldn’t operate without the new shaft, the loss of profit was too remote and couldn’t be claimed for

164
Q

what did the case of Hadley v baxendale decide

A

damages should be awarded for loss which

  • arose naturally from the breach
  • was in reasonable contemplation of both parties when the contract was made
165
Q

why did the court hold in HADLEY V BAXENDALE that the loss of profit wouldn’t have arisen naturally from the breach

A

most mills would’ve had a spare shaft

loss of profit not in reasonable contemplation of both parties- mill owner didn’t tell d that quick delivery was necessary

166
Q

what is mitigation of loss

A

the innocent party must take reasonable steps to minimise his/her loss

167
Q

example of mitigating loss

A

BRITISH WESTINGHOUSE V UNDERGROUND ELECTRICK RAILWAYS CO

168
Q

BRITISH WESTINGHOUSE V UNDERGROUND ELECTRIC RAILWAYS CO

A

it was held that UER did not have to buy the substitute turbines, but since this had been done the financial advantages gained had to be taken into account. UER not entitled to damages

169
Q

what should an innocent party do in anticipatory breach if they have chosen to affirm the contract

A

should take reasonable steps to mitigate their loss in two sections

170
Q

how must the innocent party do in anticipatory breach where performance of the contract requires cooperation and is clearly not going to happen, do to mitigate their loss

A

they must make an effort to find a replacement and the defendant can be sued for loss of profits

171
Q

which other situation (than performance) must an innocent party in anticipatory breach mitigate their loss?

A

where greater cost would be incurred by the claimant from continuing with the contract than cancelling it

172
Q

which case illustrates that the claimant must mitigate their losses where greater cost would be incurred with continuing the contract than cancelling it

A

THE ALASKAN TRADER

173
Q

the Alaskan trader

A

it was held that the owners should have mitigated their loss by accepting the anticipatory breach and suing for damages

174
Q

when does the exception to the rule that consideration must not be past occur

A

when one party has asked the other to act and although payment is not specifically mentioned at the time, it is implied that the service will be paid for

175
Q

when will the courts enforce the promise when one party has asked the other to act and it is implied that itll be paid for

A

if the other party later promises payment for what has just been done at his request

176
Q

which case illustrates the exception to the rule that consideration must not be passed

A

lampleigh v braithwaite

177
Q

lampleigh v braithwaite

A

L entitled to money even though he had already got the pardon for b when the promise was made. this was because he acted at bs request and both parties would have contemplated a payment when the request was made

Law (39 decks)

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