rules of contract law

Question 1

what is a contract

Answer 1

a legally binding agreement between two parties who are bound by law to carry out the obligations under the contract which is enforceable in court

Question 2

elements of contract formation (3 parts)

Answer 2

1. the offer and acceptance
2. the consideration (thing of value being exchanged)
3. the intention (intention for it to be legally binding)

Question 3

process of forming agreement

Answer 3

to form an agreement there must (usually) be an offer by one part and an acceptance by the other

Question 4

contract terms

Answer 4

• the content of the contract is called the terms
• they are binding
• both parties must agree to perform these terms for the contract to be fulfilled
• terms can be express -> actually said or written
• terms can be presumed -> suggested/obvious (presumed to be there)
• terms can be imputed -> the law puts into contract, you may not have done

Question 5

vitiating factors

Answer 5

• unknown defects in a contract are vitiating factors
• these can invalidate a contract even if both parties were happy with the contract they agreed upon at the time

Question 6

discharge of a contract

Answer 6

• this means ending a contract
• contracts are generally discharged when a contract is fulfilled
• it can also be discharged through frustration (unforeseen event) where a contract ends due to an intervening act meaning the contract cannot be fulfilled

if the contractual terms are not fulfilled the party is in breach and secondary obligations replace primary obligations

Question 7

remedies

Answer 7

damages
(1) nominal
(2) speculative
the right to repudiate the contract
specific performance
injunctions
rescission