Lecture 3 Flashcards
Contract = ?
An agreement which the law will enforce
What is the purpose of contracts?
To allocate risk through bargain
Contractual rights?
The court will examine existence of contract to ascertain contractual rights
Ingredients of a contract?
An agreement (offer & acceptance)
Intention (to create legal relations)
Consideration (justa causa)
Offer?
A proposal made by offerer together with a promise to be bound if unconditionally accepted by the offeree
To whom can an offer be made?
A specific person
Group of persons
World at large
How can an offer be made?
Expressly (word of mouth)
Impliedly (conduct of offerer)
For an offer to be valid…?
Has to be communicated to offeree
An offer has to be specific, it should not be vague
Answer to a question or supply of info is not an offer
Invitation to make an offer?
An advertisement is an invitation to make an offer
An advertisement is an offer if it contains a promise to pay or reward
Company prospectus?
An invitation to make an offer by a company
(E.g., application for shares = offer, giving shares = acceptance)
Examples of invitations to make an offer?
Company prospectus
Display of goods in shop window
Invitation to tenders
Call for bids
What causes a termination of an offer?
Lapse of time
Revocation of offer
Rejection by offeree
Death
Change of circumstances
Justa causa?
The justifiable cause for the promise to be binding
Examples of consideration?
Promise
Price paid
Act performed
Detriment suffered
Must consideration be sufficient?
Yes
Fulfilling an obligation by law is not sufficient consideration
Characteristics of a defective contract?
Void
Unenforceable
Are void contracts valid?
Void contracts aren’t contracts
No contractual obligation arises
Voidable contract?
Contract that can be avoided by the affected party
Unenforceable contract?
A valid contract but cannot be enforced due to absence of technical formalities
Misrepresentation?
A false statement of fact made by one contracting party before the contract was made to induce the other contracting party
Induce ?
To persuade or influence someone to do something
Fraudulent misrepresentation?
False statement made knowingly
Remedies for fraudulent misrepresentation?
Rescind the contract
Claim damages for tort of deceit
Tort = ?
A wrongful act
Negligent misrepresentation?
False statement made without looking into it properly
Remedies for misrepresentation?
Damages for tort of negligence
Innocent misrepresentation?
False statement made believing that it was correct
Can silence count as misrepresentation?
No
A positive statement must be made
Contracts of utmost good faith?
Insurance contracts
Company prospectus
Family arrangements
Duress?
Actual or threat of of physical violence
Economic duress
Undue influence
Makes contracts voidable
Are illegal contracts void?
Yes
when a case for suing occurs, what must the judge establish?
was there a contract
was there a breach
what was the damage/loss
if a prosecuting party wins a suing case, what happens?
they’re compensated
difference between civil & common law
criminal court = punishment approach
civil court = compensation approach
person who makes an offer?
person to whom an offer is made?
offerer
offeree
is an answer to a question or a supply of information classed as an offer?
no
what is a company prospectus?
a document that describes a financial security for potential buyers
must offers and acceptance be communicated?
yes
unilateral contract = ?
a contract involving only one party
only a contract if acted upon (if dog is retreived)
(e.g., offer made if a stray pet is retreived: “find my dog & you get £100”)
Postal Rule = ?
When the parties agree to make
acceptance by post, acceptance is completed when the letter is posted (even if the letter is lost in the
post and never received by the offerer).
consideration = ?
for a promise to be binding there must be consideration
what the promisee has given to the promiser
e.g., price paid, promise in return for a promise, act performed, detriment suffered
types of consideration?
executory (promise in a contract will be delivered in the future)
executed (promises in a contract are delivered immediately)
past (a past promise or act which forms the basis of a future promise)
is past consideration effective?
no
has no legal value
can consideration be legal or immoral?
consideration shouldn’t be illegal or immoral
does consideration need to be adequate and sufficient
needs to be sufficient, doesn’t need to be adequate
waiver of existing rights?
waiver of a right usually means that the contracting party loses the right to assert a breach of contract claim
