Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

ICAS TC Business Acumen > Module 11 Entering into Contracts > Flashcards

Module 11 Entering into Contracts Flashcards

1
Q

Contract

A

An agreement that gives rise to obligations which the law will enforce.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

There are six elements of a valid contract

A
  • Offer plus acceptance
  • Consideration
  • Consent
  • Capacity
  • Formality
  • No legal prohibition
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Offer plus acceptance

A
  • Agreement on all material aspects (consensus in idem)
  • When an offer has been accepted, the contract is viewed as final and no new terms can be inserted into the contract.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Consideration

A
  • Each party is required to bring something of value to the contract
  • English law only, not Scots law
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Consent

A
  • The parties must intend to be legally bound
  • Should not be possible to unintentionally enter into a valid contract
  • Intention to be bound could be implied from the way a person acts
  • Full, free and voluntary
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Capacity

A
  • The parties entering into a contract must be legally able to enter into the contract
  • In Scotland, an adult is classed to be an individual of 16 years of age or older
  • In England, an adult is an individual of 18 years of age or older.
  • Intoxication and adults with incapacity can also lack the capacity to consent.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Formality

A
  • The contract must conform to any requirements regarding its form.
  • Example some contract must be in writing or witnessed
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

No legal prohibition

A
  • The agreement must not be prohibited by law
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Offer

A

Definite, capbale of being accepted and the person making the offer intends to be bound by the consequencess.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Statment of intention

A
  • Not equivalent to an offer
  • Statment has too many uncertanties
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Supply of information

A
  • Not equivalent to an offer
  • Not capable of being accepted by the buyer
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Invitation to treat

A
  • This does not constitute an offer
  • You’re in a shop and want to buy a bottle of juice, price is displayed on the shelf as £1.50, you then walk to the checkout, at that point as a customer you’re making an offer to the shop to purchase the goods. No contract is in place until the offer of purchase is accepted by the shop.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Revoking an offer

A
  • Express revocation - The offeroer clearly states to the other party the offer is being withdrawn
  • Implied revocation - The offer lapses without any need for communication
  • In Scotland, an offeror can revoke their offer at any time prior to acceptance
  • In England, a contract requires consideration and promises to keep an offer open are generally not valid due to a lack of consideration
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Counter offer

A
  • Will terminiate the original offer
  • If not accepted the party cannot fall back on the original offer
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Acceptance

A
  • The acceptance must match the offer in every respect
  • Agreement to a set of terms, normally by signing an agreement
  • Need for communication, can be express or implied
  • Passive inaction is not sufficient to acceptance.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Void Contract

A
  • No contract ever existed
  • Those defective on grounds of capacity
  • Illegal contracts
  • Contracts which lack the fundamental matter to constitute a contract
  • Contracts contrary to public policy
17
Q

Voidable Contract

A
  • Contract has flaws, however, these flaws are less serious
  • It is regarded as valid and binding
  • At most, one party to the voidable contract will be bound by it
  • A contract entered into following misrepresentation
  • Entering a contract under duress
  • A contract entered into with a minor
18
Q

Methods of discharge

A
  • Agreement
    • Both parties agree to end the contract
  • Performance
    • Both parties have fully performed their obligations under the contract
  • Frustration
    • If it becomes impossible or illegal to perform the contract
  • Breach
    • One of the parties to the contract fails to meet their obligations
19
Q

Breach of Contract

A
  • Material breach (breach of a condition)
    • The innocent party has access to greater remedies including the right to bring the contract to an end and to make a claim for damages.
  • Non material breach (breach of a warranty)
    • The innocent party has no right to bring the contract to an end. They will be able to claim damages or other remidies.
20
Q

Damages

A
  • Defined as a sum of money to compensate the innocent party for losses resulting from the breach of contract
21
Q

Principles that may limit liability

A
  • Causation
  • Mitigation
  • Remoteness of loss
22
Q

Other remidies for breach of contract

A
  • Rescission - The innocent party be entitled to declare the contract at an end
  • Specific implement / specific performance - force them to perform their obligations
  • Interdict / injunction- An order that requires the contract breaker not to do something
  • Retention - Party not in breach withholds performance of their own obligations such as payment
  • Lien - The party not in breach retaining or refusing to deliver the other party’s goods in their possession until it performs obligations
23
Q

Elements to misrepresentation

A
  • There must be a false statement of fact
  • A statement of opinion cannot normally amount to a misrepresentation
  • The misrepresentation must have been material in inducing the other party into the contract
  • (A false statement of law cannot amount to misrepresentation as everyone is presumed to know the law.)
24
Q

Three types of misrepresentation

A
  • Fraudulent Misrepresenation - false statement of material fact
    • Knowing it to be false
    • Beliving it to be false
    • Not caring if it is true or false
  • Negligent Misrepresentation
    • Duty of care to the other party
  • Innocent Misrepresentaiton
    • Reasonable grounds to believe that the statement was true
25
Q

Requirement for traders to provide some key information to their consumer

A
  • A description
  • The total price
  • Cost of delivery and details of who pays for the cost of returning items
  • Details of any right to cancel
  • Information about the seller
26
Q

Cancelling goods

A
  • 14 days from which the consumer recives the good
  • 14 days is the time the consumer can decicde
  • Further 14 days to return the goods
  • No valid for perishables, custom goods and sealed goods like CD’s
27
Q

Refunds to customers

A
  • Entitled to a refund within 14 days
  • The refund must include basic delivery costs
28
Q
A

ICAS TC Business Acumen (16 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions