Week 4 - Contract Law II Flashcards
1
Q
Explain MINORS in Relation to Contracts
A
- person Under 18
- Contract with Minor for Necessaries will Be Binding On the Minor, As Long As it Doesn’t Contain Harsh Terms that Are Detrimental To the Minor , e.g. a Travel Pass for School
- What’s Regarded as Necessary will Depend on the Minor and their Social Standing
2
Q
Explain Capacity to Contract
A
- Some People may be Limited in Their Powers to Make Contracts, i.e. they Lack Contractual Capacity
3
Q
State the 3 Types of Contracts Made with Minors
A
- Voidable
- Valid
- Unenforceable
4
Q
Explain Beneficial Service Contracts (VALID) for Minors
A
- Contracts for Necessaries, Beneficial Service Contracts
- Contract for Training, Education or Employment is Binding on a Minor as Long as it is, On the Whole, For the Benefit
- Even If Some of the Terms are Detrimental to the Minor, the Contract will Still be Binding If the Majority of the Terms are In Their Favour
5
Q
Explain UNENFORCEABLE Contracts with Minors
A
- Contracts with Minors that Aren’t Necessaries, Beneficial Service Nor Fall Under Voidable will be Regarded as Unenforceable
- Includes Contracts for Non-Necessary Goods and Services, also Loans
- Though the Minor Could Choose to Ratify the Contract, i.e. be Legally Bound by it, Once they Reach 18
6
Q
Explain Contracts VOIDABLE by Minor
A
- Certain Contracts can be Voidable by a Minor, i.e. they Can be Voided By the Minor Before or Just After Reaching the Age of 18
- Contracts are Usually of a Continuous Nature, e.g. Partnership Agreements, Property Leases etc.
7
Q
Capacity - Explain INTOXICATION
A
- is Presumed that People Under the Influence of Alcohol or Drugs Still have Capacity to Know What They’re Doing, Therefore will be Bound By the Contract
- However, a Contract will be Unenforceable If the Intoxicated Party Doesn’t Comprehend the Nature of the Transaction AND the Other Party was Aware But Carried On Regardless
8
Q
Explain Corporations and Capacity
A
- a Corporation is a Legal Entity with its Own Legal Personality
- a Company has Unrestricted Objects, Meaning it Has No Restrictions to Enter into Legal Relations
- However, a Company May Choose to Restrict its Objects by Stating Restrictions in its Constitution
9
Q
Explain Consideration
A
- a Binding Contract Must have Consideration from Both Parties
- Unless made Under Deed, Gratuitous Promises Will Not be Enforced
- Consideration is the Promise to Give, Do Something or Refrain from Doing Something
- PROMISOR - Person who Make Promise
- PROMISEE - Person who Receives Promise
- in many contracts, there’s an Exchange of Promises, meaning Both Parties are Promisors and Promisees at the Same Time
10
Q
What is Executory and Executed Consideration?
A
- EXECUTORY CONSIDERATION - the Promise to Do Something in the Future
- EXECUTED CONSIDERATION - Consideration that has Already been Completed
11
Q
Explain Past Consideration
A
- Occurs when a Promise is Only Made After an Act has Been Done
- e.g. If a Person were to Find and Return an Expensive Item to You, You’d Realise that You’d Lost It
- Usually, Not Accepted as Consideration
12
Q
Explain a Request with an Implied Promise to Pay
A
- if a Request is Made for a Service and the Request Implies a Promise to Pay for It, Then Completing the Service is Consideration, Not Past Consideration
- e.g. Hiring a Taxi or Ordering at a Restaurant
- For this Rule to Apply, there Must be these Conditions Present :
the Act Must have been Carried Out at the Request of the Promisor
Both Parties Must Contemplate that Payment is Going to be Made for the Service
13
Q
Explain how Consideration Must be Sufficient, But it Need Not be Adequate
A
- SUFFICIENT- it Must have Some Measurable and Material Value, and it Must be Real, Legal and Certain
- NEED NOT BE ADEQUATE - Provided it has Some Value in the Eyes of the Law, the Consideration will be Regarded as Valid
- Parties have Freedom to Make their Own Contracts, that Courts Don’t Care if the Parties Make a Good or Bad Bargain
14
Q
Explain Privity of Contract
A
- Contract is Binding Between the Offeror and the Offeree (only those that signed the contract are binded)
- Privity of Contract = Persons not Party to the Agreement (i.e. 3rd parties) Cannot be Bound by the Terms or the Take Action if the Terms are Broken
15
Q
Explain Exemption to the Rule of Privity
A
- As the Rule can Cause Injustice, the Courts Developed a Number of Exceptions
- e.g. If the Contracts were Made for the Benefit of a Group of People such as Family
- Jackson v Horizion Holidays Ltd (1975)
Mr J made a Complaint Against Horizion for Misrepresentation regarding the Lack of Facilities During a Family Holiday
Horizion Accepted Liability But would Only Aware Compensation to Mr.J and Not the Rest of the Family
As Mr.J Had Entered Into the Contract on Their Behalf, Damages were Awarded By Court in Respect Of the Whole Family
