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Commercial Law > Week 6 - End of Contract Law & Sale of Goods > Flashcards

Week 6 - End of Contract Law & Sale of Goods Flashcards

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1
Q

What is Discharge of a Contract

A
  • when a Contract Comes to an End
  • an Obligations Under the Contract Finish and the Parties are No Longer Bound in Law
  • 4 Methods of Terminitating a Contract
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2
Q

What are the 4 Methds of TERMINATING (Discharge) a CONTRACT

A
  • AGREEMENT
  • PERFORMANCE
  • FRUSTRATION
  • BREACH
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3
Q

Explain DISCHARGE of a CONTRACT By AGREEMENT

A
  • where the Parties Agree to Bring a Contract to an End Before All Obligations have Been Completed
  • can be Bilateral or Unilateral Agreement
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4
Q

Explain DISCHARGE of a CONTRACT By AGREEMENT - BILATERAL AGREEMENT To DISCHARGE

A
  • where Neither Party has Completed All Their Obligations e.g. Ronaldo at United, contract ends June 2023 but agreed to end contract early in January 2023
  • the Consideration Each Party Offers is Releasing the Other Party From their Obligations
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5
Q

Explain DISCHARGE of a CONTRACT By AGREEMENT - UNILATERAL AGREEMENT To DISCHARGE

A
  • One Party has Performed All their Obligations, But the Other Party Wishes to be Released From their Obligations Before Performing Them
  • can Only be Released If the Party Provides some Consideration For the Release
  • Agreement to be Released = Accord
  • Supply of Consideration to be Released = Satisfaction
  • e.g a Football Club Buying Another Teams Manager Out of a Contract
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6
Q

Explain DISCHARGE of a CONTRACT By FRUSTRATION

A
  • Before the Obligation have Been Completed, an Event may Occur (through no fault of the parties) that Renders Performance Impossible
  • e.g. Destruction of Subject Matter, ilness/injury of One Party, Non-Occurence of Cruical Event etc.
  • Both Parties Discharge from Carrying Out any Further Obligations
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7
Q

Explain DISCHARGE of a CONTRACT By BREACH

A
  • where 1 of the Parties Breaks One of More of the Contract
  • Breach will Only Discharge the Contract If it’s a Condition or an Innominate Term that Deprives the Party of Substaintially By the Whole Benefit of the Contract
  • 2 Types of Breach
    ACTUAL Breach - Innocent Party can Sue for Breach and, If the Term Broken Is a Condition, can Also Terminate the Contract
    ANTICIPATORY Breach - the Innocent Party may Sue Immediately or Wait for the Date of Performance to Pass
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8
Q

Explain DISCHARGE of a CONTRACT By PERFORMANCE

A
  • the Ideal Method of Discharge
  • Each Party has Done Precisely what they’ve Promised to Do
  • Contract Ends All Obligations have been Performed
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9
Q

What are the REMEDIES for BREACH of CONTRACT

A

if the Contract is Breach, the Innocent Party may Claim for One of More of the Following Remmies in Court :
- DAMAGES
- QUANTUM MERUIT - a Claim for Work Done, where Completion has been Preveted By the Other Party
- SPECIFIC PERFORMANCE - Party is Legally Required to Complete Performance of Contract (or Specificed Action)

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10
Q

Explain the Remedie for Breach of Contract - DAMAGES

A
  • Monetary Compensation Aimed to Put the Parties Into the Position they Would have been In Had the Breach Not Occured
  • the Most Commonly Sought Remedy
  • Up To the Court to Decide the Amount of Damages to Grand , Unless the Parties have Pre-Estimated the Amount of Damages & have Stated this In the Contract
  • Where the Innocent Party Suffered No Real Loss, the Damages Awarded will be Nominal
  • the Aim of Damages is to Restore the Innocent Party to the Same Financial Position they would have Been In If the Contract Had been Performed
  • Not to Punish the Party who Broke the Contract
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11
Q

Explain REMOTENESS Of DAMAGE

A
  • Claims for Damages are Restricted to the Recovery of Loses that Aren’t Too Remote
  • Court to Decide How Far the Liability of the Defendant Extends
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12
Q

Explain MEASURE OF DAMAGES

A
  • In Contract Law, the Purpose of Damages Is to Put the Claimant (as far as is possible) in the Financial Position they Would have Been In If the Contract has Been Performed Satisfactorily
  • if the Contract was For the Sale of Goods, the Damages are Usually Assessed According To the Market Rule i.e. examining how much the goods would have cost on the open market
  • If a Breach Results in a Lost Opportunity, This can be Recoverable If the Lost Chance can be Quantified
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13
Q

Explain the MEASURE Of DAMAGES Case - JOYCE V Bowman Law (2010)

A
  • when Acting for Buyer of a House, the Conveyor Negligently Failed to Include a Buyer’s Option to Purchase Adjacent Land for £20,000
  • the Buyer Claimed for Loss of Profit that could have Been Made on the Land
  • Decision : Buyer was Entitled to £37,700 damages From the Lost Chance to Redevelop Property
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14
Q

Explain DAMAGES In BUILDING CONTRACTS

A
  • Usually, when a Building Contract is Breached :
  • Cost of Correcting the Deft = Amount of Damages that Can be Claimed
  • However, the Courts may Decide that the Cost of Remedying the Defects is Disproportionate to the Difference in Value of What was Supplied and What was Ordered
  • In this Situation, the Court will Award Damages to Reflect the Loss of Vlaue
  • If No Real Loss in Value, this Will Minimise the Level of Damages
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15
Q

Explain the DUTY To MITIGATE

A
  • the Claimant Must Take Appropriate Steps in Order to Minimise Their Losses
  • they Cannot Claim Damages for Losses which Could have Reasonably been Avoided
  • it’s For the Defendant to Prove that the Claimant Didn’t Minise their Losses
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16
Q

Explain what Liquidated Damages and Penatlies are

A
  • Liquidated Damages - sometimes a Contract may State the Amount of Damages to be Paid in the Event of a Breach of Contract
  • Generally, this will Be the Sum Awarded By the Courts
  • However, If the Sum is Clearly Excessive in relation to loss incurred, this Would be Regarded As a Penalty Clause
  • If Regarded As a Penalty Clause, the Liquidated Damages Wouldn’t be Enforceable By a Court (who would decide on the Correct Level of Damages
17
Q

What are the 2 Statutes (acts) that Cover THE SALE OF GOODS

A
  • CONSUMER RIGHTS ACT 2015 - Applies to Consumer Contracts (i.e. those Made Between a Trader and a Consumer) For the Supply of Goods, Digital Content or Services From 1st Oct 2015
  • SALE of GOODS ACT 1979 - Cover All Other Contracts For the Sale of Godds e.g. Trader to Trader, Individual to Individual etc.
17
Q

Explain the Case Related to Liquidated Damages and Penalties - PARKING EYE LTD V BEAVIS (2015)

A
  • Mr Beavis Argued that the £85 Fine Received For Parking Beyond the Time Limit Was a Penalty Clause Due to it’s Excessiveness
  • Decision : The Supreme Court ruled in Favour or the Car Park Owners
  • the Reasoning was that the Amount was Considered Not to Be ‘extravagant or unconscionable’
18
Q

Implied Terms - Explain s.12 The RIGHT TO SELL in the Sale of Goods Act (SOGA)

A
  • Seller has the Rights to Sell the Goods (either Now or When the Property Passes To the Buyer)
  • Seller Breaks this Term If it Transpires that the Goods are Stolen, as If they Don’t Have the Right to Transfer the Goods
19
Q

Implied Term - Explain s.13 SALE BY DESCRIPTION in the Sale of Goods Act (SOGA)

A
  • Sale by Description is Where there Is a Reliance On a Description
  • Includes Sales Where the Goods are Unseen but Also Includes Goods that are Seen but Where the Buyer is Relying on a Description Given Of the Goods
  • Where there Is a Contract For the SOG By a Description, the Implied Term Is that the Goods will Correspond With Description
  • Reliance on Description
  • Where Goods are ‘Sold as Seen’, it Means they Aren’t Sold Under Any Description Within the Meaning of s13
  • in this situation, it’s Up to the Buter to Examine the Goods Carefully
20
Q

Implied Terms - Explain s.14(2) The GOODS ARE OF SATISFACTORY QUALITY (SOGA)

A
  • Doesn’t Apply to Private Sales, Only Goods Sold as Part of Business
  • Includes Sale Of Second-Hand Items as Well as New
  • Buyer Doesn’t Need to Prove to Court how Goods Came to be Under Standard, Only that They’re Not of Sufficient Quality
21
Q

What is SATISFACTORY Quality in relation to the SOGA

A
  • Means the Quality is Satisfactory In the Eyes Of the Reasonable Buyer
  • the SOGA Sets Out some Considerations on This :
    Fit for Purpose of that type of goods
    Appearance and Finish
    Freedom from Minor Defects
    Safe
    Durability
22
Q

Explain Knowledge and Examination in relation to the SOGA

A
  • if the Buyer has Had any Defects Pointed to Them or Has Examined the Goods Before Purchase, they May Not Have the Protection of SOGA
  • Defects Pointed Out to Buyer Have to State the Specific Flaw in the Goods
  • Buyer Under No Obligation to Examine Goods, But If they Do, and Fail to Spot an Obvious Defect, Seller not Liable
23
Q

Explain Instructions and Precautions in relation to the SOGA

A
  • Buyer is Expected to Follow Instructions Supplied with Goods
  • Seller will Not be Liable If Instruction Not Followed
  • Buyer is Expected to Take Normal Precautions, but Not Have to Take any Special Precautions
24
Q

Implied Terms - Explain s.14(3) THE GOODS ARE REASONABLY FIT FOR THEIR PURPOSE (SOGA)

A
  • Doesn’t Apply to Private Sales
  • In Many Cases, there Isn’t an Overlap Between this Implied Term and the Previous Term re : Being of Satisfactory Quality
25
Q

Implied Terms - Explain s.15 SALE of GOODS By SAMPLE (SOGA)

A

when a Business Buys Goods Having Looked at a Sample, it’s an Implied Condition That:
- the Bulk (reminder) will Correspond With the Sample
- the Goods will be Free from Any Defect that Isn’t Reasonably Apparent on Reasonable Examination Of the Sample
- Applies to Private Sales Also

26
Q

Explain the REMEDIES Under the CONSUMER RIGHTS ACT (CRA)

A

If Goods Don’t Meet 1 or More of the Following :
- the Satisfactory Quality
- Fit for Their Specified Purpose
- Match Description
- Match Sample/Model
The Consumer can :

  • Reject the Goods for a Full Refund (within 30 days of receipt
  • Require Trader to Repair or Replace Goods

Commercial Law (8 decks)

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