Intro to contracts Flashcards
What is a contract?
An agreement between parties that sets out obligations for each party and is legally enforceable
What form must a contract take?
Can take any form
e.g. in writing, verbally or through conduct
What are the exceptions to the ‘any form’ rule?
These contracts must be in writing only:
> Law of Property (Miscellaneous Provisions) Act 1989
- sale of land/property
> Bills of Exchange Act 1882
- an order in writing from one party, telling another that they must pay £x by a fixed date
> Financial Services Act 1986
- consumer credit and hire-purchase agreements
What happens once you sign a contract?
What is the case for this?
Briefly explain the case
You are bound by all its terms
L’Estrange v Graucob (1934)
L’Estrange hired a cigarette machine from Graucob to put in her cafe.
When it arrived it was faulty, but in the contract there was an exclusion clause re the condition of the machine.
L’Estrange said she didn’t read the contract, and wouldn’t have signed it she did.
Held:
If you sign a contract, the law deems you to have read it, therefore you are bound by the terms.
What are the 4 essentials of a contract?
Agreement
Intention to be legally bound
Consideration
Certainty of terms
Give the 3 types of contract and their definitions
Valid
- a legally binding contract with all the essential characteristics
Voidable
- the contract can be voided by the injured party
Void
- null, the contract never existed in law
What are the 7 vitiating factors of a contract?
- Missing an essential element
- Form
- Capacity
- Legality
- Mistake
- Duress and undue influence
- Misrepresentation
How can ‘form’ vitiate a contract?
If the contract is in the wrong form
e.g. verbal agreement for sale of land
What are the 4 groups included under ‘capacity’?
Minors
Intoxicated (drugs/alcohol)
Mental health patients
Diplomats
Which act defines the age of a minor as somebody under 18?
Which contracts made by minors fall into valid, voidable or void?
Family Law Reform Act 1969
> Valid
- Sale of Goods Act 1979 s.3 (2) = minors must pay a reasonable price for necessary goods and services
- Minors can make valid contracts of employment as longs the contract is overall beneficial to the minor
Voidable
- contracts of partnership
- contracts to buy shares
- contracts to take lease of land
Void
- all those not classed as valid or voidable
What are the rules re contracting with an intoxicated party?
Valid
- Sale of Goods Act 1970 = drunkards must pay a reasonable price for necessary goods and services
Voidable
- if the drunkard did not know what they were doing when they made the contract, and the other party was aware of this
NOTE: if a drunkard ratifies (gives consent to) a voidable contract upon becoming sober, he will be liable on it
What are the rules re contracting with a mentally disordered person, not considered as ‘lacking capacity’?
Same rules as intoxicated party.
Which act protects people lacking capacity?
What are the legal implications of this?
Mental Capacity Act 2005
His property becomes controlled by the court and any attempt he makes to dispose of his property will be void.
How is legality involved in vitiating a contract?
If a contract is:
> immoral
> against public interest or policy
- e.g. selling drugs
How is ‘mistake’ involved in vitiating a contract?
When does this normally happen?
Give a general example
If there is a mistake as to the subject matter or the identity a party
When contracts are made at a distance and communication is less clear as to what was agreed
Delivered goods not matching what was agreed
