Lecture 3

Question 1

Contract = ?

Answer 1

An agreement which the law will enforce

Question 2

What is the purpose of contracts?

Answer 2

To allocate risk through bargain

Question 3

Contractual rights?

Answer 3

The court will examine existence of contract to ascertain contractual rights

Question 4

Ingredients of a contract?

Answer 4

An agreement (offer & acceptance)
Intention (to create legal relations)
Consideration (justa causa)

Question 5

Offer?

Answer 5

A proposal made by offerer together with a promise to be bound if unconditionally accepted by the offeree

Question 6

To whom can an offer be made?

Answer 6

A specific person
Group of persons
World at large

Question 7

How can an offer be made?

Answer 7

Expressly (word of mouth)
Impliedly (conduct of offerer)

Question 8

For an offer to be valid…?

Answer 8

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

Question 9

Invitation to make an offer?

Answer 9

An advertisement is an invitation to make an offer

An advertisement is an offer if it contains a promise to pay or reward

Question 10

Company prospectus?

Answer 10

An invitation to make an offer by a company

(E.g., application for shares = offer, giving shares = acceptance)

Question 11

Examples of invitations to make an offer?

Answer 11

Company prospectus
Display of goods in shop window
Invitation to tenders
Call for bids

Question 12

What causes a termination of an offer?

Answer 12

Lapse of time
Revocation of offer
Rejection by offeree
Death
Change of circumstances

Question 13

Justa causa?

Answer 13

The justifiable cause for the promise to be binding

Question 14

Examples of consideration?

Answer 14

Promise
Price paid
Act performed
Detriment suffered

Question 15

Must consideration be sufficient?

Answer 15

Yes

Fulfilling an obligation by law is not sufficient consideration

Question 16

Characteristics of a defective contract?

Answer 16

Void
Unenforceable

Question 17

Are void contracts valid?

Answer 17

Void contracts aren’t contracts

No contractual obligation arises

Question 18

Voidable contract?

Answer 18

Contract that can be avoided by the affected party

Question 19

Unenforceable contract?

Answer 19

A valid contract but cannot be enforced due to absence of technical formalities

Question 20

Misrepresentation?

Answer 20

A false statement of fact made by one contracting party before the contract was made to induce the other contracting party

Question 21

Induce ?

Answer 21

To persuade or influence someone to do something

Question 22

Fraudulent misrepresentation?

Answer 22

False statement made knowingly

Question 23

Remedies for fraudulent misrepresentation?

Answer 23

Rescind the contract

Claim damages for tort of deceit

Question 24

Tort = ?

Answer 24

A wrongful act

Question 25

Negligent misrepresentation?

Answer 25

False statement made without looking into it properly

Question 26

Remedies for misrepresentation?

Answer 26

Damages for tort of negligence

Question 27

Innocent misrepresentation?

Answer 27

False statement made believing that it was correct

Question 28

Can silence count as misrepresentation?

Answer 28

No A positive statement must be made

Question 29

Contracts of utmost good faith?

Answer 29

Insurance contracts Company prospectus Family arrangements

Question 30

Duress?

Answer 30

Actual or threat of of physical violence Economic duress Undue influence Makes contracts voidable

Question 31

Are illegal contracts void?

Answer 31

Yes

Question 32

when a case for suing occurs, what must the judge establish?

Answer 32

was there a contract was there a breach what was the damage/loss

Question 33

if a prosecuting party wins a suing case, what happens?

Answer 33

they're compensated

Question 34

difference between civil & common law

Answer 34

criminal court = punishment approach civil court = compensation approach

Question 35

person who makes an offer? person to whom an offer is made?

Answer 35

offerer offeree

Question 36

is an answer to a question or a supply of information classed as an offer?

Answer 36

no

Question 37

what is a company prospectus?

Answer 37

a document that describes a financial security for potential buyers

Question 38

must offers and acceptance be communicated?

Answer 38

yes

Question 39

unilateral contract = ?

Answer 39

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")

Question 40

Postal Rule = ?

Answer 40

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).

Question 41

consideration = ?

Answer 41

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

Question 42

types of consideration?

Answer 42

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)

Question 43

is past consideration effective?

Answer 43

no has no legal value

Question 44

can consideration be legal or immoral?

Answer 44

consideration shouldn't be illegal or immoral

Question 45

does consideration need to be adequate and sufficient

Answer 45

needs to be sufficient, doesn't need to be adequate

Question 46

waiver of existing rights?

Answer 46

waiver of a right usually means that the contracting party loses the right to assert a breach of contract claim