Parties and capacity Flashcards
What is privity of contract?
Only a contracting party can sue or breach of contract or be liable for breach.
Can a party acquire rights to sue under statute?
The Contracts (Rights of Third Parties) Act 1999 states that a party can acquire rights if:
The contract expressly provides that they may acquire a benefit
The term purports to confer a benefit on them (this must be express to be enforceable)
What powers or abilities do agents have?
To change the legal relations of the person for whom they are the agent.
e.g. a director of a company, shop assistants, auctioneers
What are the characteristics of actual authority by an agent?
What the agent has said or done with any relevant circumstances.
It can be granted expressly or implied.
The law regards the acts of the agent as the act of the principle.
What are the characteristics of apparent authority by an agent?
- At some stage, the principal must have represented that they had authority
- The third party must rely on this representation that the agent had authority
- The third party must alter their position by entering into a contract
When are minors bound by contracts?
In contracts for necessary goods/services (e.g. food/clothing)
In contracts for the service of the minor’s benefit (employment where they gain experience, apprenticeships)
When will a contract be invalid if a party is mentally incapacitated?
The person was incapable of understanding the nature of the transaction
The other party knew that to be the case
Can corporations be held liable of breach in a contract?
Yes, if they have separate legal personality. This includes:
Registered companies
Statutory corporations e.g. local authorities
Limited liability partnerships
