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Flashcards in 6 Contract Law Deck (36):
1

What is contract law? (2)

1. A contract is a legally binding document and agreement
2. It is a body of rules of agreement based on a mutual exchange of obligation

2

What ingredients are needed for a contract? (8)

1. An intention to create legal relations
2. An offer (usually preceded by an invitation to treat)
3. An acceptance
4. Consideration
5. Capacity
6. Consensus ad idem
7. Legal and possible objects
8. Sometimes written formalities

3

What is an intention to create legal relations? (2)

1. Must be an intention to establish a legally binding contract
2. Where work has been done and paid for there is an assumption that there existed an intention to create legal relations due to transaction

4

What is an offer? (3)

1. Must be an offer by one party which is unequivocally accepted by another
2. May be in writing, oral or inferred from the parties conduct
3. 'An offer is a statement or a promise by one party of a willingness to enter into a contract which if accepted will give rise to a binding contract'

5

What is an invitation to tender? (5)

1. Considered under Common Law
2. An invitation to tender is not an offer but an invitation to negotiate
3. A tender can be revoked at any time before it has been and accepted
4. A tender, once accepted, becomes a binding contract
5. Under Local Government Act 1972 an 1988 Local Authorities must publicise their tendering / formalised contracting procedures

6

What is an acceptance? (2)

1. A final and unqualified acceptance of the terms of an offer and made in writing or by conduct
2. An acceptance must exactly match the offer and must be certain and unambiguous

7

What happens if a party rejects an offer? (2)

1. If an offer is rejected or a counter offer is made the the original offer is no longer valid
2. You have to frame any negotiation as an enquiry

8

What is consideration? (4)

1. A one way promise of exchange of value in return for what is promised by another party
2. Must be an exchange of value (provisions of goods, performance of works, payment of money)
3. Each variation to a contract must be treated as a new contract
4. Consideration must be taken on both sides of the contract

9

What are the 3 key points on consideration?

1. Consideration must be sufficient but need not be adequate
2. Consideration must not be past
3. Consideration must move from the promisee

10

What does 'consideration must be sufficient but need not be equate' mean? (3)

1. If a party promises to do nothing more then they are already bound to do then this shows no consideration
2. Requires that something of value must be given for a promise
3. It's not about receiving equal value, needs to be some real or sufficient value and consideration

11

What does 'consideration must not be past' mean? (2)

1. Anything which has been done in the past is not consideration
2. If one party performs an act and the other party then makes a promise it is considered to be in the past and is unenforceable

12

What does 'consideration must move from the promisee' mean? (2)

1. Consideration must be provided by the promisee to the promiser and arise out of the contractual relationship
2. Needs to be detriment to the promisee

13

What is capacity? (2)

1. Must ensure that all parties in the contract have the legal capacity (or ability) to enter into a contract
2. Not a minor

14

What does 'consensus ad idem' mean? (3)

1. Also referred to as 'meeting of the minds'
2. Described the intentions of the parties forming the contract
3. Refers to situations where there are common understandings

15

What is estoppel? (2)

1. Legal principle which arrises when a promise, assurance or representation of some future conduct is relied upon by another to that persons detriment
2. Prevents a person from making assertions or legal actions that are contradictory to their prior position on certain matters

16

What is representation? (4)

1. Is a statement made prior to the formation of a contract
2. Different to a contractual term
3. Contract terms are particulars in the contract and if unfulfilled then parties could be sued for breach of contract
4. If a party is unfulfilled on a representation then an action of misreporting can be brought

17

What is misrepresentation? (3)

1. A false fact or statement made by one party to the other which induces the parties to enter into a contract
2. Can be considered as fraudulent, negligent or innocent
3. All three can lead to rescission

18

What is rescission? (2)

1. Setting aside of a contract
2. Damages can then be awarded from fraudulent or negligent claims of misreputation

19

What is contract negligence? (4)

1. Failure to take proper care over something
2. If you can show a lack of a duty of care then you frame your claim in tort
3. Must ensure 'reasonable skill and care'
4. If you can prove a case of contractual negligence then you can withdraw from a contract. Claimant must act on the information and not sit on rights

20

What is privity? (3)

1. The nature of a contract is only between the parties
2. A person who is not a party to the contract cannot sue or be sued on it
3. Known as privity of contract

21

What is the exception to privity?

Agency

22

What is agency? (5)

1. Architect / professional acting on behalf of the client
2. Must show that 1) there was a duty to undertake tasks specified by the terms of the agency 2) discharge of duties was handled with care and due diligence 3) all parties have a duty to avoid issues of conflict of interest

23

What is a condition? (4)

1. A promise
2. Statements or undertakings that form the agreement
3. Establish the extent of the parties obligations
4. Can be expressed or implied

24

What happens if a condition is broken? (2)

1. It will enable the claimant to be discharged from the contract
2. Claimant can claim damages

25

What is a warranty? (2)

1. A lesser condition
2. If broken, a claimant can claim damages

26

How are terms of a contact implied into a contact? (3)

1. By court
2. By custom
3. By statute

27

How does a judge respond in the event of a claim? (2)

1. Will look at the reality
2. All conditions and warranties are considered on a whole basis

28

What should be remembered when excluding contract conditions? (3)

1. Must bring the exclusion to the attention of the other party
2. Exclusions must be carefully written in an addendum to the contract
3. Liability can be excluded as long as it is fair and reasonable

29

What 3 things can happen at the end of a contract / breach of contract?

1. Damages
2. Specific performance
3. Injunction

30

What are damages? (4)

1. Assessed due to breach of contract
2. Must be demonstrable and demonstrate actual loss rather than penalty - liquidated damages
3. Unliquidated damages - can be awarded for matters of financial loss, personal injury or damage to property

31

What is specific performance?

1. The court may order the party in breach of the contract to perform their obligation

32

What is an injunction? (2)

1. Court order to stop a party from doing something
2. Carried out under equitable law / discretion

33

What is a mandatory injunction? (2)

1. Court order to enforce a party to do something
2. Carried out under equitable law / discretion

34

What is Duress? (3)

1. Voiding of a contract if signed under duress
2. Threat to a person or property form one party to another
3. Undue pressure to enter into a contract

35

What is economic duress?

1. Where suppliers put pressure on you to use products or pressure for a fee for products

36

What is frustration?

1. Where obligations of contract are impossible to perform ( as a result of fire, demolition of building etc)