Law of Contract

Question 1

To form an agreement enforceable by law, the following elements must exist:

Answer 1

I. Proposal / Offer
II. Acceptance
III. Consideration
IV. Intention to create legal binding relation
V. Capacity to contract

Question 2

An offer as the readiness of the person who makes the offer to create a legal relation and to be bound by the law, with the terms of the proposal are agreed upon by the acceptor.

Answer 2

Section 2(a) of the Contracts Act 1950

Question 3

Define Invitation to treat

Answer 3

It is a mere declaration of willingness to enter into negotiations; it’s not an offer, and cannot be accepted as a form of a binding contract

Question 4

The supporting case for Invitation to treat is _______________.

Answer 4

Partridge v Crittenden

Question 5

The supporting case for counteroffer is __________.

Answer 5

Hyde v Wrench

Question 6

When the proposer communicated the revocation of the proposal to the other party before its acceptance.

Answer 6

Section 6 (a) Contracts Act 1950

Question 7

Where the acceptor fails to fulfil a condition precedent to acceptance.

Answer 7

Section 6 (c) Contracts Act 1950

Question 8

When the person to whom the proposal is made signifies his assent thereto, a proposal is said to be accepted: a proposal, when the accepted becomes a promise.

Answer 8

Section 2(b) Contracts Act 1950

Question 9

The acceptance must be expressly in some usual and reasonable manner communicated.

Answer 9

Section 7 (b) Contracts Act 1950

Question 10

The acceptance is complete as soon as a letter is posted with a duly written address of the offeror and dropped in the post box.

Answer 10

Postal Rule

Question 11

Balfour v Balfour the Court held ______________.

Answer 11

It was presumed that the parties did not intend to be legally bound

Question 12

Merritt v Merritt the Court held _______

Answer 12

the agreement was made, the husband and wife were no longer living together; therefore, they must have intended the agreement to be binding.

Question 13

Executor consideration is defined as _____________.

Answer 13

When one promise is made in return for another promise.

Question 14

Past consideration is defined as ____________.

Answer 14

an act done before a contract is made

Question 15

The supporting case for past consideration?

Answer 15

Kepong Prospecting Ltd & S.K. Jagathesan v Schmidt & Marjorie Schmidt

Question 16

Section 26(c) Contracts Act 1950 provides ____________.

Answer 16

that an agreement without consideration is valid if it is a promise to pay wholly or in part a debt

Question 17

Privity of Contract states ____________.

Answer 17

that if a person is not a party to a contract he does not have any rights or obligations under it.

Question 18

A contract can be discharged by agreement between both parties.

Answer 18

Discharge by agreement

Question 19

List 2 types of damages.

Answer 19

Substantial damages
Nominal damages