Short Ch 5 Flashcards
Can you identify the key elements of a contract?
1) An agreement,
2) supported by consideration from both parties
3) and made with the intention to be legally binding,
4) by parties who have the legal capacity to make such an agreement
Can you define an offer?
An expression of willingness to be bound on certain terms
Can you list different ways in which an offer may be terminated?
Rejection
Conditional acceptance
–(when a party responds to an offer with terms that add or modify conditions to the original offer)
Lapse of time
Death of offeror or offeree
Offeree failing to comply with all the terms of the offer
Counter offer
Can you explain what is an invitation to treat?
Inviting another (person/company) to make an offer
e,g, goods in a supermarket
adverts in newspapers
auctions
propectus
Can you remember the rules relating to acceptance?
1) Can be made by authorized person only
2) Must be made while offer is still open (e.g. before revocation, expiry or death)
3) Must be communicated by positive words or actions
4) Cannot be imposed by silence
5) May be inferred by conduct
Can you explain the postal rule?
Contracts can be deemed accepted from the moment of posting by the offeree
UNLESS instant method communication - when and where received
also - offer revocation - must be received
Can you explain the difference between executed, executory and past
consideration?
Present - Executed - act in return for a promise
Future - Executory - promise in return for a promise
Past - NOT valid consideration - something already done at time promise made
Can you explain the presumptions relating to domestic and commercial
arrangements in terms of intention to create legal relations?
Social domestic and family - not legally binding
Commercial - legally binding
H&W - not legally binding, unless parties specify they intend to be legally binding
other domestic - Courts look at intention of parties when the arrangement was made
Can you explain privity of contract?
Only a part to the contract has enforceable rights or obligations under it
Third parties have no right of action except in exceptional circumstances
Can you explain the remedy for breach of contract?
A fundamental breach of contract will entitle the other party to sue for damages
Damages = a compensatory financial award
Can you explain the difference between terms and representations?
Term - any statement forming part of a contract
Representation - A statement made by one party designed to induce the other party to enter into the contract
Can you explain misrepresentations and the impact this can have on a contract?
Misrepresentation - a false statement of fact or law, made with the intention of inducing another party to make a contract
Misrepresentation makes a contract voidable
