The Law of Obligations Flashcards
What are the equitable remedies?
There are 3 equitable remedies:
- recission
- specific performance
- injunction
Damages are what form of remedy for breach of contract?
Common law
Equitable remedies are used first to remedy breach of contract.
Is this statement true or false?
False, equitable remedies are only used when common law remedies are deemed insufficient.
What are the purposes of damages?
To put the innocent party in the position they would have been in if the contract had been performed
What are the 4 ways a contract can be discharged?
- By agreement
- By frustration
- By performance
- By breach
A representation is a type of term in a contract.
Is this statement true or false?
False.
What type of term has a nature which is unknown until it is breached?
Innominate
If a warranty is breached, the other other party can terminate the contract and claim for damages.
Is this statement true or false?
False, if a warranty is breached, the other party can only claim for damages
What type of contract term, when breached, can cause the wronged party to terminate the contract?
Condition
What is the aim of awarding damages when a contract is breached?
To compensate the innocent party
What are common law remedies for breach of contract?
- Damages
- Action for price
- Quantum meruit
What remedy of breach of contract has the claimant asking for the value of the work they have done in order to be put back in the position they would have been in had the contract never been made?
Quantum meruit
What is the consideration for remoteness of damage?
The losses must have arisen naturally from the breach or both parties must have been reasonably aware of the possible result of the breach
How does reliance interest differ from expectation interest?
With reliance interest, the claimant gets put into the position they would have been in had they not relied on the contract, while expectation interest puts the claimant in the position they would have been in had the contract been performed as expected
What are liquidated damages?
This is an agreed measure of the damages that is in the contract beforehand
When do the courts accept liquidated damages?
This form of damages is only allowed if it is a genuine pre-estimate of the likely loss to the innocent party if the contract is breached.
What 2 rules are used to determine the amount of damages payable?
- The remoteness of the damages (Was the loss suffered remote from the breach?)
- The measure of the damage (How much loss was incurred as a result of the breach?)
A condition of recission is that the contract hasn’t been affirmed by one party.
Is this true or false?
True
What is recission?
This is an equitable remedy that involves putting the parties back to where they were before the contract.
What are the 5 aspects of a contract?
- An offer
- Acceptance
- Consideration
- Intention to create legal relations
- Legal capacity
What is acceptance?
Acceptance is the unconditional assent to all terms.
Silence amounts to acceptance.
Is this statement true or false?
False, all acceptance must be communicated, either expressly or through implied conduct
When does acceptance not have to be communicated?
- Where the offeror has waived the right to receive communication, such as in unilateral contracts - reward cases
- Acceptance is through the postal service, once it is agreed that such a method is to be used for acceptance
What are the 3 types of consideration?
- Past
- Executed
- Executory
Which form of consideration is invalid when making a contract?
Past
Executed consideration is either a promise to pay or provide goods/services.
Is this statement true or false?
False, this is executory consideration
Which form of consideration is an action, normally done in return for a promise of money.
Executed
For domestic relations, when are agreements presumed to be legal?
When spouses are separated
Commercial agreements are presumed to be legal.
Is this statement true or false?
True
Goods on a shop shelf are offers to customers to buy the goods.
Is this statement true or false?
False, goods on a shop shelf are merely invitations to treat
What are the 2 components of an offer?
An offer must:
- have certain and specific terms
- be capable to be accepted
Is a tender an offer or an invitation to treat?
Invitation to treat
A placed bid in an auction is an offer or an invitation to treat?
An offer
If the court establishes contributory negligence, it has the power to not award damages.
Is this statement true or false?
False, the court can only reduce the damage by the proportion to which the claimant contributed to the damages suffered
To whom does the auditor owe a duty of care?
The client company
If volenti non fit injuria is applied to a claim, can damages be awarded?
No, as with volenti, the claimant is said to have been fully aware of the risks and voluntarily consented, either expressly or through implied conduct
What is vicarious liability?
This is a claim made by an employee where they state that it is in fact the employer that is liable for negligence, rather than the employee themselves, as they were following their employer’s instructions
What must a claimant prove in order to be successful in a suit for negligence?
- The other party owed a duty of care to the claimant
- The duty of care was breached
- The breach caused harm
- The losses made by the claimant were not too remote
What test is used to establish causation when proving negligence?
But for
What does a counter offer do the original offer?
A counter-offer nullifies the original offer
Is an invitation to treat needed in order to make a legal contract?
No, an offer is needed to make a legal contract
When the court applies res ipsa loquitur, who is the burden of proof on?
The burden of proof is on the defendant as the breach of duty of care by them is obvious enough for them to have to prove they did not act negligently.
What does res ipsa loquitur mean?
The facts speak for themselves
Does a request for information nullify an offer?
No, it is not a counter offer
What actions are not considered offers?
- Invitations to treat
- Statement of intention
- Supply of information
What is the tort of passing off?
This is the use of a name, logo or description which is trying to make people incorrectly think that one is acting under a different entity.
When are public adverts considered offers?
When they are precise
B2B exclusion clauses fall under what legislation?
Unfair Contract Terms Act 1977
B2C exclusion clauses fall under the Consumer Rights Act 2015.
Is this statement true or false?
True
What is the main consideration for B2C exclusion clauses?
Fairness
The main consideration for B2B exclusion clauses is reasonableness.
Is this statement true or false?
True
What type of exclusion clauses are ignored by the courts?
Ones relating to death and personal injury
A breach of a _______ is a breach of the contract.
Which word is correct? Term or representation?
Term
Are statements made by experts considered terms or representations?
Terms
What are the 2 types of tort?
- Passing off
2. Negligence
When does the court reduce damages payable to the claimant?
When it is found that the claimant contributed to their own loss (contributory negligence)
A person agrees to do a job for a certain amount and then gets offered additional monies.
If they do not receive the extra money, can they sue the other party?
No, because there was no extra consideration given
Do events that cause a contract to become frustrated occur before or after the contract is agreed on?
After, as the contract is now unable to be performed
According to the general postal rule, acceptance occurs when the letter is received.
Is this statement true or false?
False
Do courts always treat penalty clauses as void?
Yes
2 persons discuss payment for a job and after the job is done, a payment amount is offered.
However, although accepted, no monies are paid.
Can the person be sued for the money?
Yes, as there was executed consideration through the implied promise and agreement (to be paid) before consideration (performing the job)
Damages awarded put the claimant in the position they would have been in had the contract been performed.
What interest is being protected?
Expectation
Are domestic agreements presumed to be legal?
No, not generally
The case of Anglia TV v Reed is an example of what legal principle?
Reliance interest
Liquidated damages can be seen in what case?
Dunlop v New Garage
The case of Hadley v Baxendale is an example of what legal principle?
Remoteness of damage
Does a request for information nullify an offer?
No, as it is not a counter-offer
An exclusion clause with any ambiguity is ruled which way based on the contra proferentum rule?
Against the person relying on it
What words are used to complete the following?
An exclusion clause in a contract purports to … liability or to … it by limiting the extent of the liability.
exclude, restrict
The court can imply a term into a contract in order to give the contract efficacy.
Is this statement true or false?
True
Can the remedy of specific performance be used when the court can supervise the order?
No, this can only be used when the courts cannot ensure the performance
Are all equitable remedies only granted at the court’s discretion?
Yes.
In relation to the tort of negligence, when does a duty of care exist?
When there is sufficient proximity between the parties, such that the harm suffered was foreseeable
What happens to one’s duty of care when the costs of precautions against breaching is high?
The duty of care is lowered.
