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Real Estate > Lesson 5 > Flashcards

Lesson 5 Flashcards

1
Q

What is a contract?

A

A contract is a voluntary agreement between two or more parties that is enforceable by law.

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2
Q

What do contracts set for the parties involved?

A

Contracts set the rights and duties (obligations) of the parties involved.

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3
Q

Does a general contract need to be written to be valid?

A

No, a general contract need not be written; it can be formed verbally or by conduct without specific form or formalities.

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4
Q

What are the four legal elements required to form a contract?

A

The four elements are: a) Offer b) Acceptance c) Consideration d) Intention to create legal relations

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5
Q

What must a contract have to ensure certainty and completeness?

A

A contract must have Certainty and Completeness, often referred to as the 3Ps: Parties, Price, and Property.

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6
Q

What is an offer in contract law?

A

An offer is an expression of willingness to enter into an agreement, also referred to as a proposal

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7
Q

Who are the two parties involved in making an offer?

A

The party making the offer is called the offeror, and the person receiving the offer is called the offeree.

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8
Q

How can an offer be made?

A

An offer can be made in writing, verbally, or by conduct.

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9
Q

What is required for an offer to be effective?

A

An effective offer must be communicated to the offeree.

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10
Q

If the offeror sends an offer letter on Monday and it reaches the offeree on Wednesday, when is the offer considered made?

A

The offer is considered made on Wednesday when the offeree receives it.

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11
Q

Is invitation to treat an offer?

A

No

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12
Q

Give 3 examples of invitation to treat

A
  1. Display of goods with price tags
  2. Auction
  3. Advertisement
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13
Q

What is the general rule regarding the withdrawal of an offer?

A

An offer can be withdrawn at any time prior to it being accepted.

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14
Q

How must the withdrawal of an offer (revocation) be communicated?

A

The withdrawal of the offer must be communicated to the offeree to be valid.

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15
Q

Who can communicate the revocation of an offer?

A

The withdrawal of the offer can be made by a third party, not necessarily the original offeror. The offeree must have knowledge of the revocation.

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16
Q

Can an offer that is open for a fixed period be withdrawn without legal liability?

A

Yes, an offer open for a fixed period can be withdrawn by the offeror without legal liability.

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17
Q

Is there an obligation to keep an offer for any particular time?

A

No, except through an Option to Purchase, which must be supported by consideration.

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18
Q

What happens when an offer is replaced by a fresh offer?

A

The fresh offer must stipulate that it supersedes the earlier offer.

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19
Q

How can a fresh offer be communicated?

A

A fresh offer can be communicated with a letter stating that it replaces the previous offer.

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20
Q

What occurs if an offer is made with a deadline for acceptance?

A

The offer expires after the deadline.

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21
Q

What happens if there is no deadline set for an offer?

A

The court assumes the offer lapses after a reasonable time.

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22
Q

What is meant by “failure of a condition” regarding an offer?

A

If an offer is made subject to a condition and that condition is not met, the offer automatically terminates.

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23
Q

How does the death of the offeror or offeree impact an offer?

A

If the offeror or offeree dies, the offer is terminated, even if the other party was not aware of the death.

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24
Q

How can an offer be rejected?

A

Rejection can be made in writing, verbally, or by conduct and must be communicated, leading to the inability to revive the offer.

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25
Q

What is a counter offer?

A

A counter offer is when the offeree rejects the original offer and proposes new conditions, which constitutes a rejection of the initial offer.

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26
Q

What is acceptance in contract law?

A

Acceptance is an expression of approval to the offer proposed by the offeror.

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27
Q

How must acceptance be structured in relation to the offer?

A

Acceptance must be unconditional and unqualified; it must be on the same terms as the offer with no new conditions attached.

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28
Q

What happens if acceptance includes new conditions?

A

If acceptance is conditional, it constitutes a counter-offer rather than acceptance of the original offer.

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29
Q

How must acceptance be conveyed to the offeror?

A

Acceptance can be made in writing, verbally, or by conduct.

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30
Q

What is an example of prescribed acceptance?

A

If the seller grants an Option to Purchase, the buyer must exercise the acceptance copy of the OTP and hand it over to the seller or the seller’s solicitor.

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31
Q

What is the Postal Rule of Acceptance?

A

The Postal Rule states that if the offeree accepts the offer and sends it by post, the acceptance is effective as soon as the letter is posted, regardless of whether the letter reaches the offeror.

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32
Q

Does silence amount to an acceptance?

A

No

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33
Q

Can an acceptance be withdrawn after being communicated to the offeror?

A

No

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34
Q

What is consideration in contract law?

A

Consideration is something of legally recognized value given in exchange for a promise or performance.

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35
Q

What does consideration refer to when exchanged between parties?

A

Consideration refers to a promise made by one party in exchange for a promise made by the other party (executory consideration).

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36
Q

Is consideration always monetary in business transactions?

A

No, while consideration is often money, it is not restricted to monetary value; it can be any form of value exchanged.

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37
Q

What does the requirement that consideration must be sufficient but not necessarily adequate mean?

A

The law does not scrutinize the fairness of the bargain; even a nominal amount (e.g., $1) can be sufficient to enforce a contract.

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38
Q

What is the principle regarding past consideration in contracts?

A

Past consideration is not considered valid consideration; a promise based on past actions cannot be enforced.

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39
Q

What is the role of intention to create legal relations in contract law?

A

Intention to create legal relations is the element that converts an agreement into a contract, indicating that the parties intend to be legally bound by their agreement.

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40
Q

What is the formula for a valid contract?

A

Offer + Acceptance = Agreement; Agreement + Intention + Consideration = Contract.

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41
Q

What is meant by “meeting of the minds”?

A

A meeting of the minds is an agreement between parties where each party is fully aware of the commitments being made, reflecting their mutual intention to contract.

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42
Q

Why is contractual intention essential?

A

Contractual intention is necessary for an enforceable contract because it ensures that the parties intend to enter a legal relationship.

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43
Q

What presumption exists for business and commercial agreements?

A

For commercial transactions, the State Court of Singapore will presume that there is always an intention to create legal relations.

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44
Q

What presumption exists for social and domestic agreements?

A

In social and domestic agreements, there is no presumption of intention to be legally bound, meaning such agreements are generally not enforceable.

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45
Q

What does “subject to contract” mean in legal terms?

A

“Subject to contract” clauses indicate that an agreement is incomplete and not legally binding until the terms of a formal contract have been settled.

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46
Q

What happens if an agreement is incomplete?

A

An incomplete agreement is considered an unenforceable contract, meaning it cannot be legally enforced until finalized.

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47
Q

When is an agreement made “subject to contract” considered legally binding?

A

It is not legally binding until the execution of a formal document.

48
Q

What are the three types of express terms in a contract?

A

Written
Verbal
Mixture of verbal and written

49
Q

What are implied terms in a contract?

A

Implied terms are terms that are not expressly stated but are understood to be part of the contract through:
Statute
Court decisions
Facts, often based on the conduct of a person.

50
Q

What are conditions in a contract?

A

Conditions are important terms of the contract; a breach of these terms allows the innocent party to treat the contract as repudiated and sue for damages.

51
Q

What are warranties in a contract?

A

Warranties are less important terms of the contract; a breach of a warranty entitles the innocent party to claim for damages but does not allow for repudiation of the contract.

52
Q

What determines whether a contract is enforceable?

A

The enforceability of a contract depends on its status; the courts must be willing to give effect to it, and the parties must be able to sue on it.

53
Q

What is a valid contract?

A

A valid contract is an agreement that satisfies all legal requirements and can be enforced by the courts.

54
Q

What are the key requirements for a contract to be valid?

A

i. Parties must have legal capacity. ii. No vitiating factors must be present (factors that could invalidate the contract).

55
Q

What is the full equation for an enforceable contract?

A

(Offer + Acceptance + Consideration + Intention) + Capacity of Parties + No Vitiating Factors = Enforceable.

56
Q

What does it mean when a contract is considered void?

A

A void contract is treated as if it never existed at law due to a serious flaw.

57
Q

What is a voidable contract?

A

A voidable contract is treated as valid at law and can be either affirmed or rejected at the option of one party.

58
Q

What is an unenforceable contract?

A

An unenforceable contract is a valid and legally binding contract that cannot be enforced due to non-compliance with certain formalities.

59
Q

What does “revocation” mean in the context of a contract?

A

Revocation refers to the withdrawal of an offer or acceptance, indicating that it is no longer valid.

60
Q

What is rescission in contract law?

A

Rescission is the act of ending a contract in such a way that it is treated as void from the beginning (ab initio), as if it never existed.

61
Q

When is rescission typically applied?

A

Rescission is confined to cases involving fraud, mistake, or misrepresentation.

62
Q

What does “repudiation” refer to?

A

Repudiation refers to a party’s expression, through words or conduct, of their intention not to perform their obligations under a contract.

63
Q

What options does the innocent party have in the case of repudiation?

A

The innocent party can either accept the repudiatory breach, which discharges the contract, or affirm the contract, allowing it to remain in effect.

64
Q

What is meant by renunciation in the context of contracts?

A

Renunciation refers to a voluntary act by a party to give up their rights and obligations under a contract.

65
Q

What are vitiating factors?

A

Vitiating factors are facts or circumstances that negate or invalidate a contract.

66
Q

What happens to a contract if vitiating factors are present?

A

If vitiating factors are present, the contract is either void or voidable.

67
Q

What is a void contract?

A

A void contract has no legal effect in law and is treated as if it never existed from the beginning.

68
Q

What are some examples of factors that can make a contract void?

A

Illegality
Incapacity (such as a minor)
All mistakes except unilateral mistakes.

69
Q

What is a unilateral mistake in the context of contracts?

A

A unilateral mistake occurs when only one party is mistaken about a fundamental fact, which may make the contract void or voidable depending on circumstances.

70
Q

What are some factors that can make a contract voidable?

A

Duress
Undue influence
Misrepresentation
Incapacity (such as being a drunkard or mentally incapable)

71
Q

What does “illegality” refer to in the context of contracts?

A

Illegality refers to contracts that are prohibited by law, either due to common law or specific statutes.

72
Q

What types of activities typically result in illegal contracts?

A

Committing a crime or tort.
Promoting sexual immorality.
Promoting corruption in public life.
Evading revenue (taxes).

73
Q

What is a mistake in the context of contracts?

A

A mistake is an erroneous belief that occurs when a party enters into a contract based on an assumption that later proves to be false.

74
Q

What is a common mistake?

A

A common mistake occurs when both parties are in agreement but operate under the same false assumption — their contract is based on a situation that is actually false.

75
Q

What is a mutual mistake?

A

A mutual mistake happens when the parties have different assumptions about essential terms of the contract, meaning they are not truly in agreement from the start.

76
Q

What is a unilateral mistake?

A

A unilateral mistake occurs when only one party is operating under a false assumption while the other party is aware of the true situation.

77
Q

What does non est factum mean?

A

Non est factum is a defense stating that a written contract does not reflect a party’s intentions or understanding, often due to misunderstanding or error in the signing process.

78
Q

What does Non Est Factum apply to?

A

Non Est Factum applies to written and signed contracts.

79
Q

What does it mean if a contract is fundamentally different under Non Est Factum?

A

It means that the contract signed was fundamentally different from the document that the party believed it to be.

80
Q

What is one way a mistake may occur regarding a signature?

A

A signature may have been signed by mistake without knowledge of its meaning, but this does not apply to cases where a party fails to read the contract before signing it.

81
Q

What must a party show to successfully claim Non Est Factum?

A

The party must demonstrate that they were not negligent and that the document signed was significantly different from what they intended to sign.

82
Q

Can a party claim Non Est Factum for not reading a contract before signing?

A

No, the claim does not apply to situations where a party simply fails to read a contract before signing it.

83
Q

What is duress?

A

Duress involves actual or threatened physical violence to oneself or family members and results in unlawful pressure and a lack of free will.

84
Q

What are the two main types of duress?

A

Physical Duress: Threats of physical violence (e.g., threat to life or limbs).
Economic Duress: Use of unlawful economic pressure to compel a party to agree to demands they otherwise wouldn’t.

85
Q

How does economic duress manifest in contracts?

A

Economic duress occurs when a party is forced to agree to a contract or demands because of unlawful economic pressure, such as intimidation or coercion.

86
Q

What does undue influence involve?

A

Undue influence involves one person taking advantage of a position of power over another, preventing the victim from freely exercising their will.

87
Q

When is it considered wrong to influence someone into a contract?

A

It is only wrong when the influence becomes excessive and applies unfair pressure on a party to enter into the contract.

88
Q

What is actual undue influence?

A

Actual undue influence requires the victim to show that the pressure from the wrongdoer negated their free will and induced them to sign the contract.

89
Q

What is presumed undue influence?

A

Presumed undue influence arises in certain relationships where influence is expected, such as:
Parent and child
Teacher and student
Doctor and patient
Lawyer and client
Religious leader and disciple

90
Q

What is a term in contract law?

A

A term is a statement made during contractual negotiations that is incorporated into the contract and is legally binding.

91
Q

Are all statements made during contractual negotiations treated as terms?

A

No, not everything spoken or written is treated as terms; some statements may be considered representations.

92
Q

What defines a representation in the context of contracts?

A

A representation is a statement made during negotiations intended to induce another party to enter into the contract, but it is not part of the final contract itself.

93
Q

What are the three types of pre-contract statements?

A

Puff: An exaggerated statement with no legal consequence.
Representations: Statements that, if false, can lead to misrepresentation lawsuits.
Terms: Legally binding aspects of the contract.

94
Q

What is a misrepresentation?

A

A misrepresentation is a false statement of a material fact made by the representor that affects the representee’s decision to agree to a contract.

95
Q

Who can make a statement that qualifies as misrepresentation?

A

The statement must be made by one contract party (representor) to the victim (representee); representations made by third parties are immaterial.

96
Q

What is Element 1 of misrepresentation?

A

A statement made by the representor to the representee that is ultimately untrue and affects the representee’s contract decision.

97
Q

What is Element 2 regarding misrepresentation?

A

The statement must be a false statement of fact (not opinion) related to present or past existing facts.

98
Q

What is Element 3 in the context of inducement?

A

The statement must be material and induce the victim to enter into the contract.

99
Q

What is Element 4 concerning reliance?

A

The victim must demonstrate that they relied on the misstatement and that it influenced their decision to enter the contract.

100
Q

What is fraudulent misrepresentation?

A

Fraudulent misrepresentation involves dishonesty and can include knowingly making a false statement, making a statement without belief in its truth (reckless disregard), or being reckless and careless regarding the truth of the statement.

101
Q

What is negligence misrepresentation?

A

Negligent misrepresentation occurs when a person makes a false statement due to carelessness, failing to take reasonable steps to verify the truth.

102
Q

What is innocent misrepresentation?

A

Innocent misrepresentation is when a false statement is made without any intention to deceive and with good reason to believe it is true.

103
Q

What remedies are available for fraudulent misrepresentation?

A

Rescission and damages for fraud

104
Q

What remedies are available for negligent misrepresentation?

A

Rescission and damages under the misrepresentation act, with the court having discretion to award damages in lieu of rescission

105
Q

What remedies are available for innocent misrepresentation?

A

Rescission, damages under the misrepresentation act if the court considers it fair to award them and indemnity for expenses incurred

106
Q

What are the two main categories of remedies for breaches of contract?

A

Common Law and Equity

107
Q

What is the primary remedy under common law for breach of contract?

A

The primary remedy is repudiation, which can lead to damages.

108
Q

What types of damages can be awarded under common law?

A

Damages can either be liquidated (agreed upon in the contract) or unliquidated (determined by the court).

109
Q

What remedies are available under equity?

A

Remedies include:
Specific performance
Injunction
Rescission
Restitution

110
Q

What are vitiating factors in contract law?

A

Vitiating factors are issues that can invalidate a contract, including:
Misrepresentation
Mistake
Illegality
Duress
Undue influence
Incapacity

111
Q

What are the two potential statuses of contracts affected by vitiating factors?

A

Contracts can be classified as void or voidable.

112
Q

What remedies are available for void contracts?

A

Remedies can include damages, injunctions, specific performance, or restitution.

113
Q

What are the outcomes associated with the discharge of a contract?

A

Discharge of a contract can result in termination or performance.

114
Q

What does termination of a contract lead to?

A

Termination results in remedies such as:
Damages
Rescission
Restitution
Rectification

115
Q

What can cause frustration in the performance of a contract?

A

Frustration can occur due to:
An act of God
A force majeure clause breach
Agreement between the parties

116
Q

What is meant by “discharge of contracts”?

A

Discharge of contracts refers to the ending of a contractual obligation, either through performance, termination, or frustration.

Real Estate (19 decks)

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