Law Of contract

Question 1

What are the two types of Contract?

Answer 1

Contracts under seal (formal in writing and witnessed)

Simple Contracts

Question 2

What is a unilateral contract?

Answer 2

One person is legally bound

e.g. a reward for lost property

Question 3

What is a bilateral contract?

Answer 3

Both parties legally bound

Question 4

What are the 5 essentials for a contract to be formed?

Answer 4

An agreement 
Intention to create legal relations
Consideration
Be in the form required by law (if any)
Capacity to Contract

Question 5

How is an agreement reached for a contract to be made?

Answer 5

Offer & Acceptance

Question 6

What type of offer is an ad or the display or price marked goods?

Answer 6

An invitation to treat

Question 7

What is a true offer?

Answer 7

The offeror intends to be bound immediately

Question 8

When can an offer be withdrawn?

Answer 8

Any time before acceptance

Question 9

Are domestic and social arrangements legally binding?

Answer 9

No

Question 10

What is Consideration?

Answer 10

“The price which supports the promise”

e.g. I agree to gove you my bike for £50
Unless you agree to pay or give something in return then there is no Consideration and the contract is not enforceable by law

It is the provision of something in exchange for something

Question 11

What are the rules of consideration when drawing up a contract?

Answer 11

Must be real or genuine
Does not have to be adequate (fair)
Must not be past
Must move from the promisee

Question 12

What types of contract are required to be in a certain form?

Answer 12

Not many
Contracts under seal = deeds, these need to be signed and witnessed
A lease for 3+ years must be by deed

Question 13

What groups have special rules for Capacity to Contract?

Answer 13

Minors
Mentally ill
Drunk
Corporations

Question 14

What types of contracts need to be in writing? (5)

Answer 14

Bills of exchange 
Cheques & promissory notes 
Transfer of shares in a company 
Some consumer credit (hire-purchase) 
Contracts of Marine insurance

Question 15

What are the types of terms?

Answer 15

Express

Implied

Question 16

What are express terms in contracts (general)?

Answer 16

Are based on the words sooken by the parties or written down

Question 17

What are implied terms in general contracts?

Answer 17

Terms implied by fact (not actually stated by presumed)

By custom or usage (the custom of the market)

In law

Question 18

What are implied terms by fact?

Answer 18

One thst is not actually stated but is presumed to be intended

Goes without saying

Question 19

Why are standard terms used?

Answer 19

Used for all customers
Saves time & simplifies
Risk of abuse though because Joe Soap will not normally read and cannot negotiate anyway

Question 20

Which rules are applied to control standard terms?

Answer 20

Common law rules - if one party includes an exclusion clause this must be made clear to the other party

Question 21

Who does Unfair Contract Terms Act 1977 apply to?

Answer 21

Parties acting in the course of business

Question 22

What are the rules about terms in a contract under UCTA 1977?

Answer 22

No one can exclude liability for death or injury by negligence

Contract Liability - if one party is acting on the others written terms of business, other party cannot exclude or restrict liability for breach of contract

Question 23

What are the Consumer Rights Act 2015 rules around contract terms?

Answer 23

Cannot exclude or restrict liability for death or bodily injury from negligence

Cannot exclude implied terms

Question 24

How can terms of a contract be classified?

Answer 24

Conditions and Warranties

Question 25

What is a warranty in Contract terms?

Answer 25

Affects only minor aspect of the agreement Injured party can claim damages but not terminate

Question 26

What is a Condition in Contract terms?

Answer 26

Remates to an important aspect of the agreement “goes to the root” Victim has right to claim damages and terminate the agreement

Question 27

How do defective contracts arise?

Answer 27

``` Illegality Improper pressure Mistake Misrepresentation Non-disclosure ```

Question 28

What makes a contract illegal?

Answer 28

Contrary to law Contrary to public policy Contracts in restraint of trade

Question 29

How is an insurance contract illegal?

Answer 29

``` Same as general contracts and: No Insurable Interest Purpose of contract is illegal Unlawful use of property Close connection with a crime ```

Question 30

How is a contract discharged?

Answer 30

By performance Breach of contract Frustration Discharge by agreement

Question 31

What remedies are available for a breach of contract in general contracts?

Answer 31

``` Termination Damages Specific Performance & Injunctions Other - action for an agreed sum - claim for restitution - action in ‘quantum Meruit’ as much as earned or deserved ```

Question 32

What are the limitations of actions in general contract law?

Answer 32

Goverened by Limitation Act 1980 - 3yrs in a claim for Personal Injuries - 6yrs in an action on a simole contract - 12yrs in action brought on a speciality contract (deed)

Question 33

What is Privity of Contract?

Answer 33

A doctrine that restricts the rights and duties created in contract to the persons who originally made it

Question 34

When can a 3rd party enforce a contract?

Answer 34

If the contract provides they can The contract purports to confer a benefit on the 3rd party 3rd party mist be identified by name Or they belong to a general to a general class of people identified in the contract

Question 35

What is a ‘chose (thing) action’?

Answer 35

A contractual right Valuable but intangible Cannot be seized, only enforced e.g. the right to recor money

Question 36

What is a ‘chose in posession’

Answer 36

A piece of property | Can be seized or controlled

Question 37

What are the two most common types of assignment in contracts?

Answer 37

Statutory Assignment | Equitable Assignment

Question 38

What is Statutory Assignment under the Law of Property Act 1925

Answer 38

The assignment of a debt or ‘chase in action’ is transferred to the assignee along with legal rights - must be absolute - in writing - expressly made in writing to the debtor - no need for Consideration as can be a gift or used for future debt payable

Question 39

What is Equitable Assignment of a contract?

Answer 39

If assigning a contract to another but cannot meet all the requirements for a Statutory Assignment, an Equitable assignment can be ised. There must be a clear intention to assign - by the assignor informing the assignee that they transfer the ‘chase’ to them - bu the assignor instructing the debtor to discharge the obligation to the assignee

Question 40

What rights cannot be assigned to another in contracts?

Answer 40

Rights under ‘personal’ contracts These are where it would be unreasonable to expect the 3rd party to carry out their obligation with anyone other than the original party e.g. car insurance

Question 41

Can obligations in a Contract be transferred?

Answer 41

Not normally Not without the consent if the other party and assignee One party can DELEGATE their obligations, this is not Assignment because thr original oarty is still liable Can cancel a debt by ‘novation’ A owes B £100 B owes C £100 They can agree that A will pay C

Question 42

What Assignment can happen within Insurance contracts?

Answer 42

1. Assignment of the subject matter - does not auto assign the policy - normally a new contract is set up instead 2. Assignment of the Benefit - the right to recover money, a ‘chose in action’ can be assigned - contract is not assigned, just the benefit - simply put ‘the proceeds of a claim can go to thr assignee’ 3. Assignment of the Contract itself - personal contracts are not freely assigned so insurance cannot - marine cargo & life policies are exceptions