Miscellaneous

Question 1

What is the postal rule and its implications? Prerequisite and scope?

Answer 1

Rule = where acceptance is by post, it is effective when the letter is posted (i.e. offer cannot be revoked after posting and acceptance valid even if letter destroyed)

Prerequisite = postage must be a reasonable (i.e. in circumstances, reasonable to accept by non-instantaneous communication) or specified method of acceptance

Scope = may apply to other non-instantaneous forms of communication

Question 2

When are contracts with a minor not void (2 requirements)?

Answer 2

Where the contract is (i) beneficial to the minor and are for (ii) necessary (rather than mere luxury) goods and services, i.e., those suitable to the minor’s condition in life and his actual requirements at the time of sale and delivery.

Question 3

When can a minor (i) be awarded restitution of benefits transferred under a contract; or (ii) be sued for restitution of benefits under a void contract?

Answer 3

1. Minor cannot get restitution unless there is total failure of consideration.
2. Minor can be liable in restitution at common law; or under the Minor Contracts Act where just and equitable to do so (does NOT permit minor to be sued for the price)

Question 4

When will the incapacity of an adult person render a contract with him void (3 requirements)?

Answer 4

That person

1. Did not UNDERSTAND the nature of the contract;
2. The other party was AWARE of his impairment; and
3. There was no subsequent RATIFICATION of the contract.

Question 5

4 exceptions to the rule in Pinnel’s Case?

Answer 5

The rule in Pinnel’s case is that part-payment of a debt cannot be good consideration for the whole. Does not apply if

1. Creditor has altered his position.
2. Creditor agrees to accept goods and services in lieu of money.
3. Compositions with creditor
4. Agreement was for part-payment to be made by a 3P

Question 6

How to construe an auction with no reserve?

Answer 6

An offer by auctioneer to sell at the highest price, accepted by bidder who makes the highest bid.

Question 7

When can a unilateral offer be revoked (note qualification)?

Answer 7

Any time before complete performance - but see Errington, where Denning suggested that (i) if one has begun acceptance of a unilateral offer and (ii) would suffer inequitably if the offer were immediately revoked, the offeree must be allowed to try and complete the act and the offeror cannot withdraw the offer in this time.

Question 8

What is an option contract?

Answer 8

A collateral contract for the offeror to keep the option open for a longer period of time in return for good consideration from the offeree.

Question 9

3 exceptions to the postal rule?

Answer 9

1. Letter not properly addressed
2. Application would cause manifest inconvenience and absurdity
3. If the postal rule is ousted by the offeror (e.g. requires acceptance to be by actual delivery or receipt)

Question 10

What if B purports to accept A’s offer by email and A does not receive it? Is A bound?

Answer 10

Depends on whether B knew that acceptance not received - if yes, B is responsible for resending acceptance. If not, and A does not ask it to be resent, A estopped from relying on own failure.

Question 11

How to prescribe only one particular mode of acceptance? Exception? Effect of failure to prescribe?

Answer 11

Make it explicitly and exclusively mandatory (i.e., ONLY valid mode of acceptance) - unless prescribed mode is for benefit of offeree only in which case offeree may waive it.

Otherwise, any other equally efficacious method will do.

Question 12

When is past consideration nevertheless good consideration (Pao On)?

Answer 12

1. Provided at the request of the promisor
2. Payment was understood to be due (i.e. both parties assumed that payment would be made)
3. Contract will be enforceable apart from the past consideration issue.

Question 13

When will a promise to pay more for the same be enforceable?

Answer 13

When, in consideration of the promise to pay more, the promisee agrees to go beyond its existing contractual duties OR the exceptions in Williams v Roffey applies.

Question 14

5 steps to the practical benefit doctrine in Williams v Roffey (per Glidewell LJ)?

Answer 14

1. Existing contract
2. B has reason to doubt that A will complete at all or on time
3. B approaches A and promises extra for punctual completion
4. B obtains a practical benefit or obviates a disbenefit
5. B’s promise was not given as a result of duress or fraud,
   In this case, the practical benefit or avoidance of disbenefit on B’s part is capable of being consideration binding B to his promise.

Question 15

When will a promise to accept less be enforceable (4 situations)

Answer 15

Generally part-payment of a debt is not good consideration, with three exceptions

1. Pinnel’s Case - the payment is made differently to what was originally contemplated (i.e., paid with a different asset, in a different place or at a different time)
2. Welby - Part-payment by a 3P
3. Promissory estoppel
4. MWB - where the promisor receives a practical benefit (e.g. for a landlord - receiving less rent in exchange for keeping the premises occupied)

Question 16

When do rights suspended under a promissory estoppel resume?

Answer 16

1. Following reasonable notice or

2. The circumstances giving rise to an estoppel have ceased

Question 17

3 prerequisites for enforceability of a contract by 3Ps under the CR(TP)A?

Answer 17

1. Contract purports to confer a benefit on 3P
2. 3P is expressly identified by name, class or description
3. On a proper construction, it appears the parties intended the term to be enforceable by 3P (rebuttably presumed if contract purports to confer a benefit on 3P)

Question 18

When must the original parties to a contract falling within the CR(TP)A obtain 3P’s consent to vary it?

Answer 18

1. 3P has communicated assent to that particular term to the promisor
2. Promisor is aware that 3P has relied on the term, OR
3. Promisor can reasonably expected to have foreseen that 3P would rely on the term and 3P has in fact relied on it

Question 19

Three implied terms regarding quality of goods under the SGA?

Answer 19

1. Satisfactory quality - i.e., generally fit for purpose
2. Reasonably fit for specific purpose IF the buyer expressly or impliedly makes that purpose known to the seller
3. Will match their description or any sample

Question 20

Special implied term for contract for the supply and installation of goods?

Answer 20

The goods will not conform to the contract if they are installed incorrectly.

Question 21

Implied terms for services contracts regarding (i) standard; (ii) deadline; (iii) price; and (iv) representations about the service?

Answer 21

ONLY if contract is silent/does not displace the implied term -

1. Reasonable care and skill
2. Reasonable time
3. Reasonable price
4. Any representations about the service by the trade is taken to be a term to the extent the consumer has taken the info into account

Question 22

When does breach of an innominate term constitute a repudiatory breach?

Answer 22

If it deprives the innocent party of substantially the whole benefit of the contract

Question 23

3 statutory remedies under CRA for breach of contract for sale of goods?

Answer 23

Consumers can

1. Reject goods and return them for a full refund within 30 days
2. Right to have goods repaired or replaced
3. A right to a price reduction or rejection if the repair fails after the first attempt, less a deduction for the use consumer has had if the rejection is made after 6 months (or any time for vehicles)

Question 24

2 statutory remedies under CRA for a breach of contract for provision of services?

Answer 24

1. Right to require repeat performance

2. Right to price reduction if repeat performance impossible or not done in a reasonable time

Question 25

2 circumstances in which the presumption of no ICLR for social or domestic agreements is more likely to be rebuttable?

Answer 25

1. Agreement between a married couple that is estranged or separated
2. Where the family relationship is ruined by discord

Question 26

4 examples in which the strong presumption of ICLR for commercial agreements more likely to be rebutted?

Answer 26

1. Letter of comfort - unlikely to be legally binding since falls short of a guarantee
2. Letter of intent - where one party indicates that he is likely to contract eventually but not currently ready to be bound
3. Honour clauses - i.e. clause stating that an agreement is to be binding in honour only
4. Collective agreements - presumed not to be entered into with ICLR and therefore not generally enforceable

Question 27

What is the parol evidence rule? Name 5 exceptions to it.

Answer 27

No evidence can generally be admitted to add to, vary or contradict the written agreement unless there is evidence concerning

1. Ambiguity - can adduce extrinsic evidence to resolve ambiguity
2. Incomplete agreement - can adduce extrinsic evidence to complete an incomplete written contract
3. Trade usage or custom - may form part of the parties’ agreement even if not reduced to writing
4. Existence of a collateral contract
5. Operating status - can adduce extrinsic evidence to show contract not yet effective

Question 28

When is evidence of pre-contractual discussions admissible?

Answer 28

Only in an action for rectification.