4 Content

Question 1

2 Contracts are

Answer 1

o Legally enforceable

o Legally recognizable rights and obligations

Question 2

Privity of contract

Answer 2

Third parties are not bound

o Exceptions such as agency, easing and insurance

Question 3

3 • Formation of contract requires

Answer 3

1. Offer+Acceptance
2. Intention of legally binding relationship
3. Presence of consideration (both parties bargain)

Question 4

Unconditional assent (mirror image rule)
Last Shot rule

Answer 4

Offer + Acceptance, without counteroffer. Otherwise not valid for formation of contract

Last offer is binding

Question 5

Create legal relations intention
Domestic or social agreement
Commercial agreement

Answer 5

Domestic or social arrangements do NOT intend to create legal relations

Commercial agreements DO intend to create legal relations

Question 6

Presence of consideration (both parties bargain) is in the the form of either bilateral or unilateral

Answer 6

1. Bilateral (promise for promise)

2. Unilateral (promise for doing)

Question 7

2 Consideration has to be

Answer 7

• Adequate

* Sufficient (recognizable economic value)

Question 8

• Invitation to treat

* Invitation to tender

Answer 8

• Not the same as offer, so not legally binding
• Classified as invitation to treat

o But if offer accepted = offer becomes binding

Question 9

• Parol Evidence Rule (only used in common law)

Answer 9

o If contract is formally written, no outside evidence can be used

Question 10

• Representation

Answer 10

o Statements made to begin are inducement to enter contact, thus not grounds for terms of contract

Question 11

• English Law recognizes terms as

Answer 11

o	Condition (Fundamental term)	 
             Breach = can terminate
o	Warranty/Guarantee (Minor term)
            Breach = can’t terminate
o	Innominate (Intermediate term)
            Parties disagree if term is condition or warrant

Question 12

Validity of Exclusion Clause (used to limit liability), when consumer is involved

Contra proferentem rule
Main purpose rule
Fundamental breach is determined by (UK LAW)

This leads to (EU example) ->

Answer 12

Contra proferentem rule: the exclusion clause must cover the exact circumstances in question. Any ambiguity in the clause is interpreted strictly against the one relying on it.

Main purpose rule: it is presumed the exclusion clause is not intended to defeat the main purpose of the contract.

The judge

this makes makesa lot of clauses void, hence more protection

Question 13

Validity for exclusion clause B2B, test is if claim is

Answer 13

Fair and reasonable