Legal Studies

Question 1

Define contract

Answer 1

A contract can be defined as an agreement between two or more parties that creates rights and obligations that are enforceable by law

Question 2

What are the three elements of a valid contract?

Answer 2

1. The intention to create a legal relationship
2. Agreement
3. Consideration

Question 3

Explain intention to create a legal relationship?

Answer 3

Courts assume that social agreements are made without the intention of being enforceable however courts assume that business agreement are intended to create a legal relationship.

Question 4

Explain agreement?

Answer 4

Agreement is the second element of a valid contract. A contract is formed when one party - the offeror, makes an effort to enter a contract and the other party - the offeree, accepts the offer. A clear understanding of what has been agreed upon should exist.

Question 5

Explain consideration

Answer 5

Consideration is the third element of a valid contract. It is the ‘price’ one party pays to buy the promise of the other party. It’s something of value, such as a sum of money given by one party to a contract to the other party

Question 6

What is an invitation to treat?

Answer 6

An invitation to treat is not an offer; it is communication that invites offers from parties wishing to enter into a contractual agreement.

Question 7

What is a counteroffer?

Answer 7

A counteroffer is a new offer from the the party after the original offer has been rejected/made.

Question 8

What is a gratuitous promise?

Answer 8

A gratuitous promise is a promise to freely give or do something with nothing given in return

Question 9

Explain capacity to contract

Answer 9

Despite all three elements being present, a contract will not be valid unless the parties to the contract have the capacity to contract. The capacity of the parties to contract refers to their ability to fully understand the terms and obligations contained in a contract.

Question 10

What are minors and necessaries?

Answer 10

A minor is a person under the age of 18 and necessaries are items considered essential for minors.

Question 11

Define void and voidable

Answer 11

Void means not valid; having no legal effect. A voidable contract may be treated as valid, or alternatively, may be rejected by one of the parties on a legal ground such as a lack of metal capacity.

Question 12

What is metal capacity?

Answer 12

The law assumes that a person who is mentally unsound, or under the influence of alcohol and drugs, does not have the metal capacity to enter into a binding contract.

Question 13

What is contract law concerned with?

Answer 13

Contract law is concerned with situations where people are longer willing or able to fulfil their part of an agreement

Question 14

Define misinterpretation

Answer 14

Misrepresentation occurs when one party makes an untrue statement to entice another party to enter into a contract

Question 15

Define fraudulent misrepresentation

Answer 15

Fraudulent misrepresentation is a false statement made recklessly with the intention that the statement will be acted upon, even if it results in damage to the plaintiff.

Question 16

Define duress and undue influence

Answer 16

Duress is force or compulsion to perform a particular act. Undue influence is improper influence of power over another.

Question 17

Explain what legality of contract refers to

Answer 17

If the subject matter of a contract is illegal, it will not be enforced by the courts

Question 18

What is an express term? And term?

Answer 18

An express term refers to a term the parties have agreed to, either in words or writing or both. A term is a legally binding statement in a contract.

Question 19

Define an implied term

Answer 19

An implied term is a term in a contract that is not expressly made, but is reasonable assumed to be part of the contract.

Question 20

What is a condition?

Answer 20

A condition is a significant contractual term that, if breached, enables the injured party to end the contract and receive damages. Conditions are terms that are regarded as essential to the contract.

Question 21

What is a warranty?

Answer 21

A warranty is a less important contractual term which if breached, enables an injured party to claim damages.

Question 22

Define mediation

Answer 22

Mediation is a means of settling disputes in which a neutral third person (a mediator) assists the parties to meet a mutually acceptable agreement. Mediators have no power to impose a decision.

Question 23

Define arbitration

Answer 23

Arbitration is the precess of resolving disputes by an independent third party, such as a court of tribunal, where the decision is binding on the parties

Question 24

What is a small claim?

Answer 24

A small claim is a dispute in relation to a contractual matter, such as the supply of goods and services, for amounts less that $10,000

Question 25

What is a remedy?

Answer 25

A remedy is an outcome of a civil dispute awarded by the court to the successful party.

Question 26

Name and explain the 5 types of remedies

Answer 26

1. Damages - a sum of money awarded to the plaintiff to compensate their loss or injury suffered
2. Injunctions - a court order restricting the actions of a person or a requirement for them
3. Order of specific performance - order requiring a defendant to comply with the the terms of a contract
4. Rescission - an order to cancel a contract
5. Restitution - an order compelling the return of property

Question 27

Explain real consent

Answer 27

A basic principle in contract law is that there must be real consent by the parties. This means that if one of the parties has agreed to a contract based on a mistake, misrepresentation, duress or undue influence, there has not been real consent.

Question 28

What is one thing CAV is concerned about?

Answer 28

One area of concern highlighted by CAV is con artists who go from door to door offering dodgy deals to residents such as sealing the driveway or painting roof tiles