Semester One : Contracts

Question 1

Sale of Goods Act 1979

Answer 1

Requires all goods that are bought or sold in the UK to be as described, of satisfactory quality and fit for purpose.

Question 2

Misrepresentation Act 1967

Answer 2

Exists to protect consumers from fraudulent claims that induce you into buying something or into a contract.

Question 3

Consideration

Answer 3

• An agreement is only legally binding if it is supported by “consideration”.
• A gets something in return for what they undertake to B.

Question 4

Offer and Acceptance

Answer 4

• Contract will only be concluded once an offer has been made and been validly accepted.
• Doesn’t need to be in writing, in English Law, a contract made orally is as valid as one made in writing.

Question 5

Unilateral contract

Answer 5

A promise to do something in return for someones else doing a specific act.

Question 6

Bilateral contract

Answer 6

Each side promises something

Question 7

Offer vs Invitation to Treat

Answer 7

• Not all apparent offers carry intention to be legally bound, merely invitations to open negotiations.
• Harvey v Facey

Question 8

Advertisements

Answer 8

• Certain types of advertisements held to be by definition to treat, not offers.
• Advertisement of goods for sale at a given price, these do not bind seller to sell to potential buyer.
• Scancarriers A/S v Aotearoa International Ltd.

Question 9

Offer v Counter-Offer

Answer 9

• Each counter-offer acts as a rejection of the previous offer.
• Hyde v Wrench

Question 10

Acceptance

Answer 10

• Contract only comes into effect once the offer is accepted.
• Must be offered by either the offer or by their nominated agent.

Question 11

Waiver of Communication

Answer 11

Offeror may indicate that simple non-reply will indicate acceptance.

Question 12

Postal Rule

Answer 12

• Acceptance is deemed to be made when the letter was posted.
• Contract is concluded in place where letter sent is.
• Brinkibon Ltd. v Stahag

Question 13

Acceptance by Action

Answer 13

In a unilateral contract, acceptance will be by an offeree performing an act.

Question 14

Revocation of Acceptance

Answer 14

• Acceptance only valid once communicated by offeror, may be revoked before then.
• Exception for postal rule, acceptance valid once posted, can not be revoked after that.
• Kinch v Bullard

Question 15

Representation

Answer 15

If the party did not intend to be contractually liable for accuracy of a statement.

Question 16

Warranty

Answer 16

If the party did intend to be contractually liable for the accuracy of a statement.

Question 17

Conditions

Answer 17

Fundamental terms of contract

Question 18

Promissory Conditions

Answer 18

• Promise fundamental to counterpart’s agreement to contract.
• e.g. in shipping contracts, that ship is in a given port or will leave port for destination on a given date.

Question 19

Non-promissory conditions

Answer 19

Condition may not be a promise but rather a term stating that A’s obligation will not arise until a specific event takes place.

Question 20

Innominate Terms

Answer 20

• Certain terms contain obligations whose breach may be substantial, or not, depending on circumstances.
• e.g. a ship may be totally unfit for voyage or might need only a minor repair in order to be fit.

Question 21

Illegality

Answer 21

If performing an obligation under contract would mean committing an illegal act, the party is excused from performing it.

Question 22

Contract to commit crime

Answer 22

• If parties know performance would be a crime, to enter into it will also be a conspiracy to commit the crime.
• Tinsley v Milligan

Question 23

Contract to commit tort

Answer 23

• Contract to defame someone also held to be enforceable and void for illegality.
• Clay v Yates

Question 24

Frustration

Answer 24

If the performance of obligation has become impossible, both parties are released from under contract.

Question 25

Frustration by law

Answer 25

• Where a contract does not contain explicit terms that parties discharged in certain circumstances, courts may imply it.
• Taylor v Caldwell

Question 26

Fraudulent Misrepresentation

Answer 26

• Origins in the tort of deceit.

- Derry v Peek

Question 27

Innocent Misrepresentation

Answer 27

• Where the party makes false representation, but is neither fraudulent nor negligent.

Question 28

Negligent Misstatement

Answer 28

• Making false statements.

- Hedley Byrne v Heller