Legal Studies (Unit 2) Flashcards
Explain the conditions that establish a contract
- Intention to create legal relations
- Offer (proposal for contract)
- Acceptance
- Consideration
Whats the difference between offer and invitation to treat?
An offer is a proposal to enter a legally-binding relationship with another, which requires acceptance. An invitation to treat is when a seller advertises their products to invite consumers to make their offer. For example, goods on display at a store are an invitation to treat, while taking these products to the checkouts is an offer.
What are factors that influence capacity?
- under 18
- intoxicated
- mentally impaired
What is the difference between terms and representations?
Terms are the specific details of a contract, conditions being the essential terms that define the contract (ie product) and warranties being the lesser important terms (ie. year of product manufacturing).
Representations are often referred to as ‘sales talk’, promotional promises not included in contracts
What is the parol evidence rule?
Common law that prevents secondary interpretation of a term (you can’t explain what you meant outside of the objective wording)
What is the function of exclusion clauses?
Limit or exclude liability of one party (ie for negligence on their part)
What are circumstances where contracts cannot be enforced?
- Lack of capacity
- Lack of genuine consent
- Legality of object
What is the difference between mistake of fact and misrepresentation?
Mistake of fact regards is an honest factual error, whereas misrepresentations can be innocent or fraudulent. These involve untrue statements of fact within the contract terms.
Explain how a misrepresentation of fact can be used to terminate a contract?
The misrepresentation must be fraudulent, acted upon, and responsible for damages
What are factors that inhibit genuine consent?
- misrepresentation
- duress
- undue influence (eg. doctor/patient)
- unconscionability
- unreasonable contract terms
Explain unconscionability with examples
A contract cannot be legally enforced against an individual deemed socially or culturally disadvantaged, eg. poverty, sickness, age, education, language, race, ect., according to s20-21 of the ACL
case law: Commercial Bank of Australia v Amadio [1983]
Explain the difference between void and voidable?
When a contract is voidable, the injured party can decide if they want to continue, however when the contract is void, it is fully terminated.
What are methods of incorporation for exclusion clauses?
- signature
- reasonable notice
- ticket case
(incorporation must be explicit)
List ways a contract can be discharged?
- performance (both parties complete terms)
- mutual agreement
- operation of law (one party becomes bankrupt)
- frustration (external circumstances)
- discharge by breach
explain rules regarding damages:
- damage must result specifically from breach
- person claiming damage must have reasonably acted to prevent damage
- damages must concern financial loss
What legislation protects consumers in Australia and how?
The Australian Consumer Law (2011) provides a system of consumer protections and remedies for defective goods and services, protects against unfair contract terms, and provides enforcement of these codes
What was the precedent established by Adams v Lindsell (1818)? And Entores Ltd v Miles Far East (1955)?
Acceptance through post is established at the exact moment the parcel is sent
Acceptance through email is established at the moment the email is received
What is the function of the ACCC?
The Australian Competition and Consumer Commission acts as a consumer watchdog, ensuring the conduct of business does not compromise the safety, fairness and efficiency of the competitive free trade market
What legislation establishes consumer rights to good service?
s52: undisturbed possession of goods
s54: the goods are of acceptable quality
s56: the goods match their description
What are remedies if a good is of broken or unacceptable nature?
- a repair, replacement or refund
- cancellation
- compensation
What is the precedent established in Carlill v Carbolic Smoke Ball Co [1893]
(Acceptance)
An ad was placed in the papers offering a reward for any that tested the newly released carbolic smoke balls. However, a lady was denied the reward after meeting the terms, as they argued she never accepted.
The outcome established that she accepted by meeting the contract terms, and that acceptance is unconditional and does not need to be communicated to
What is the precedent established in Felthouse v Bindley (1862)?
(Acceptance)
Silence does not constitute acceptance
What do the cases Roscorla v Thomas (1842) and Folkes v Beer (1894) say about consideration?
If further promises are made after the contract is accepted, these additional promises require consideration.
However, additional promises are not consideration within themselves
What are terms implied by statute (include examples)
Implied terms are details of the contract assumed to be reasonably expected, ie. a service is carried out with skill, or a good will be provided within a reasonable amount of time
If a contract is breached, what is one common law and one statute (ACL) remedy?
In common law, the contract could be considered voidable, for the injured party to decide whether to continue or not. Under the ACL, the injured party can pursue legal compensation, if certain conditions are met (ie the breach caused financial loss)
What is the function of s18 of the ACL?
Seeks to regulate misleading or deceptive conduct, which is identified by the ACL
