Untitled Deck Flashcards
What is a contract?
A legally binding agreement between two or more parties.
What is a bilateral contract?
Both parties take on an obligation.
What is a unilateral contract?
One party assumes an obligation, can be made to the whole world.
What is the difference between an offer and an ITT?
Offer is part of the negotiations; ITT is merely an indication of a willingness to start negotiations.
What can form a contract when accepted?
An offer can form a contract when accepted; an ITT cannot.
What are examples of ITT?
1) Ad in a newspaper (Partridge)
2) Shop window (Fisher v Bell)
3) Self-service shop (Pharmaceutical society of GB)
4) Auctions (Harris)
5) Requests for information.
What are examples of an offer?
1) Vending machine - makes the offer
2) Giving of information (Harvey v Facey).
What are ways to end an offer?
1) Lapse of time
2) Revocation
3) Rejection
4) Counter-offer
5) Death of offeror
6) Death of offeree.
What is required for acceptance?
Acceptance has to be positive and unqualified.
What constitutes a counter-offer?
If the offeree attempts to vary the terms, this is then a counter-offer (Hyde v Wrench).
What is a request for information?
Not a counter-offer, does not terminate the offer and it is still open to acceptance (Stevenson v Mclean).
What are the forms of acceptance?
1) Words: can be said or written
2) Conduct: general silence or inaction is not acceptance, a positive act is needed.
What is the significance of specified methods of acceptance?
Only acceptance by specified methods will be binding (Tin v Hoffman).
What are the methods of communication of acceptance?
1) Conduct
2) Postal rule
3) Electronic.
What is executed consideration?
Completed consideration.
What is executory consideration?
Consideration which has not yet been completed.
What must consideration be?
Need not be adequate but it must be sufficient; must be real, tangible and have some actual value (Chappell).
Is past consideration valid?
Past consideration is not good consideration.
Who must provide consideration?
Must move from the promisee; a person cannot sue or be sued under a contract unless they have provided consideration for it.
What is performing an existing duty?
Merely doing something you are already bound to do is insufficient consideration for a new contract.
What is privity of contract?
A person not party to a contract cannot sue or be sued under it.
What is the intention to create legal relations?
Parties must intend the agreement to be legally binding.
What is presumed in commercial agreements regarding ITCLR?
ITCLR is presumed to exist (McGowan).
What is presumed in social agreements regarding ITCLR?
ITCLR is presumed not to exist.
What is a condition in a contract?
A major term that goes to the root of the contract; a breach has serious consequences.
What are warranties in a contract?
Minor terms within a contract.
What are innominate terms?
Looks to the effect of the breach and whether the party was deprived of the whole benefit of the contract.
What does discharge of contract deal with?
Deals with the end of the contract.
What is complete performance?
Must be ‘complete and exact.’
What is a frustrating event?
Before the contract can be completed, an event occurs which makes completion impossible (Paradine).
What is the doctrine of frustration?
If it is impossible for the contract to be completed as the subject matter has been destroyed (Taylor); radical change in circumstances (Krell v Henry).
When may frustration not apply?
1) Self-induced (Maritime)
2) Contract becomes less profitable/difficult to perform (Davis)
3) ‘Event’ was a foreseeable risk.
What are fixed damages?
Parties may fix the sum needed to be paid if there is a breach into the contract (Cavendish).
What are equitable damages?
Awarded where damages would be inadequate.
What does s9 imply?
Implies a term in every contract that goods will be of satisfactory quality.
What does s9(2) state?
What a reasonable person would consider satisfactory given the price, description etc.
What does s9(3) cover?
Fitness for all common purposes.
What are the exceptions to s9(4)?
Does not apply if:
1) Defect drawn to consumers attention
2) Consumer makes an examination before purchasing
3) Defect would have been revealed by a reasonable examination.
What does s10 state?
If a consumer makes it known to a trader a particular purpose, the goods must be fit for that purpose (Baldry).
What does s11 cover?
Goods as described; match description (Beale).
What does s20 provide?
Short term right to reject.
What does s23 provide?
Right to a repair/replacement.
What does s24 provide?
Right to a price reduction or a final right to reject.
What are exclusion clauses?
Term that limits liability for a breach of contract.
What are the controls on exclusion clauses?
1) Rules relating to the incorporation of the clause
2) Construction of the clause
3) Unfair contract terms act 1977
4) Consumer Relations Act 2015.
What are vitiating factors?
Defects in a contract, may operate to invalidate an otherwise validly formed contract.
What is a void contract?
As if the contract never existed.
What is a voidable contract?
A party can continue with the contract if it is to their benefit.
What is misrepresentation?
A false/untrue statement made by one party which induces the other to enter into the contract.
What constitutes a false/untrue statement?
Anything that influences another party’s decision (Spice Girls); must be a statement, not silence (Fletcher).
What is a statement of material fact?
Statement of fact, not opinion (Bissett).
Who must make the misrepresentation?
Made by a party to the contract; no misrepresentation where the statement is made by a 3rd party.
What must the statement do in misrepresentation?
Must be a statement that induces the other party.
What is fraudulent misrepresentation?
Intentionally lied or is reckless as to its truth; made a statement they know to be untrue (Derry).
What is innocent misrepresentation?
Person believed the statement was the truth.
What is negligent misrepresentation?
Careless as to the truth of the statement.
What is economic duress?
Entering a contract as a result of financial threats; a contract made where one party is forced into it should not be valid.
What does s49 imply?
Implies a term that a trader will perform a service with reasonable care and skill.
What does s52 state?
A trader will perform the service within a reasonable time.
What does s55 provide?
Right to a repeat performance.
What does s56 provide?
Right to a price reduction.
What is an actual breach?
1) Poor performance
2) Work done badly or goods that are substandard
3) Non-performance.
What is a breach of condition?
When a condition is breached, V may terminate the contract if they wish (Poussard).
What is a breach of warranty?
V may sue only for damages and the contract continues (Bettini).
What is anticipatory breach?
Occurs when a party gives notice in advance that they will not be performing the contract; C can either sue immediately or wait until the time for performance (Hochester).
What are the remedies for breach?
1) Repudiation
2) Damages.
Who is a trader?
‘A person acting for purposes relating to the persons trade.’
Who is a consumer?
‘An individual acting for purposes outside the individuals trade’; a company cannot be a consumer as they are not an individual.
What is the purpose of damages?
Compensate the claimant for damages suffered as a result of the breach; damages put the claimant back in their position pre-contract.
What is the Hadley test for damages?
1) Objective test according to what loss is a natural consequence of the breach
2) Subjective; specific knowledge of potential losses in the minds of both parties.
