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Flashcards in Basic Law Deck (58):
1

What is a contract?

An agreement which is enforceable, i.e. which the law will enforce
• An agreement between two or more persons
- in law can mean “natural persons” and corporations
• The persons who enter into the contract are parties to the contract
• Each of the parties to a contract obtains rights and owes obligations under the contract

2

What is the common law system?

• Common law system operates in countries influenced in their development by England
• Law can be made:
• by Parliament (Parliamentary law / statute law / written law)
• by Judges (case law / unwritten law)

3

What is the Civil Law System?

• Most other countries operate Civil law system
• Relies on statutory rules, often in a code, e.g. Napoleonic Code
• Parliament / Government makes law
• Judges interpret and apply the law, but do not make law
• Largely developed from Roman law

4

What legal system does Australia have?

• Australia has a common law system
• Written law and unwritten law
• Originally based on law of England
• 1788 British declared Australia terra nullius – ‘empty land’
• Did not recognise existing rights of ownership over the land
• English law assumed to be in force

5

What is the Australian Constitution?

A set of rules that a country or state is run by
1 January 1901
Set up legal framework for governance at national level
Established federal (Commonwealth) parliament and government, responsible for national decision-making and law-making
Established six state governments
Established power sharing arrangements between federal and state parliaments
Section 51 gives federal parliament power to make laws about specific matters

6

What does the High Court do?

Established High Court of Australia
• High Court:
• interprets the Constitution
• decides its meaning
• settles disputes between federal and state governments
• Section 109: in a conflict between state and federal law, federal law will prevail

7

What are the 3 separations of power?

• Australian Constitution divides governance amongst three groups.

• Parliament (Senate and House of Representatives) makes and amends written law
• Executive (government departments) puts written law into action
• Judiciary (judges/High Court) interprets and makes judgments about written and unwritten law

8

What are the 3 levels of government?

Federal
State/Territory
Local

9

What is a state constitution?

• Each state has its own constitution, which set up legal framework for governance at state level

• e.g. Constitution Act 1867 (Qld)
• State constitutions:
• established state level courts
• provided for system of local government by councils

10

What components is Australia's common law made of?

Written law
Unwritten law

11

What is written law?

Law made by Parliament (Federal, State or Territory) in the form of Acts of Parliament (known as Acts, Statutes, Primary Legislation)

12

What is unwritten law?

• Case law or judge-made law
• Made by judges in courts when they hand down decisions
• Process of adaption and development of existing rules to handle new situations, e.g. law of negligence

13

What is the hierarchy of Australian Courts?

Refer to slides L1

14

What is Civil Law?

• Objective is to compensate person for loss or damage caused due to wrongful conduct of another
• Remedy is monetary damages (or equitable remedies, e.g. injunction)

15

What is Criminal Law?

• Objective is to punish persons guilty of committing crime
• Punishment is monetary fine, community service or imprisonment

16

What is a contract?

An agreement which is enforceable, i.e. which the law will enforce
• An agreement between two or more persons
in law can mean “natural persons” and corporations

• The persons who enter into the contract are parties to the contract

17

Does a contract have to be in writing?

• A contract does not have to be in writing to be enforceable, unless specifically required by legislation
• Can be difficult to prove existence of an oral contract, or what the contract says (the terms of the contract)

18

What do we need to form a contract (4 points)?

Offer - Has an offer been made?

Intention (to create legal relations) - Did the parties intend to make a contract?

Consideration - Was consideration provided?

Acceptance - Has the offer been accepted?

19

In addition to the 4 elements needed to make a contract, what else is needed?

Capacity - Is the person recognised in law as able to enter into a legal contract?

Meeting of minds - Do the parties have the same understanding of the key terms?

20

What is an offer?

An indication made by one person (the offeror) to another (the offeree) of the offeror’s willingness to enter into a contract with the offeree on certain terms

• A proposal to which the person making the proposal is prepared to be contractually bound

• Most common example:
the offeror promises to perform an act or supply goods or services in return for a sum of money

21

What happens to an offer?

Offeror may withdraw

Oferee may reject offer, or accept offer

Offer may lapse with passing of time, death of offeror or offeree, failure of condition precedent

22

When is an offer not an offer?

• When it is simply an indication of an intention, or possible course of conduct
• When it is merely part of a negotiation or discussion
• When it is a response to a request for information (Harvey v Facey[1893] AC 552)

23

What is an invitation to treat?

A communication by a person to other people that the person is willing to enter into negotiations or dealings which may eventually lead to an offer being made, e.g.
Goods on display in shops
Goods for sale at auctions
Requests for tenders
Advertisements

24

What is a revocation of offer?

• Offeror can withdraw (revoke) an offer.
• The rules for revoking an offer:
Offer can be revoked prior to acceptance by offeree
cannot revoke it once it has been accepted
Revocation must be communicated to offeree
the revocation must reach offeree, but offeror does not have to do it personally

25

What is rejection of an offer?

• Offeree can reject an offer expressly or by implication
• Rejection of an offer terminates the offer –it cannot subsequently be accepted
• A counter offer is a rejection of the offer

26

What is privity of contract?

• Only parties who enter into the contract are bound by the contractual terms and entitled to enforce them against each other
• Third parties (parties who did not enter into the contract) cannot bring a legal action to enforce the terms

27

What does Consumer mean under the ACL?

• A person who acquires good or services where the amount payable is $40,000 or less
or
• the goods are of a kind ordinarily acquired for personal, domestic or household use or consumption; or
• the goods are a vehicle or trailer for transport of goods on public roads

28

What is vitiation of contract?

•Where the legal validity of the contract can be destroyed:
Formed under duress
Formed under mistake
One of the parties entered the contract due to misleading or deceptive conduct by the other

29

When can a contract be viewed as void?

Where a contract is declared void:
• Viewed by courts as not existing
• Generally will be void ab initio, i.e. void from the beginning, so never came into existence
• Cannot enforce, or claim damages for breach under, void contract

30

What are the 5 vitiations of contract?

Duress (common law)
Mistake (common law)
Misleading or deceptive conduct (ACL)
Unconscionable conduct (common law or ACL)
Unfair contract terms (ACL)

31

What are the 3 common law mistakes?

Common mistake
Mutual mistake
Unilateral mistake

32

What is conscionable conduct?

Unconscionable= unfair, unscrupulous, unjust
• Rules against unconscionable conduct in common law (case law) and in statute

33

What is discharge of contract?

Discharge (termination) of a contract occurs when the parties are relieved of their obligations to perform under the contract

When a contract is discharged it comes to an end

34

What are the 4 ways a contract can be discharged?

Discharge of contract
Performance
Agreement
Frustration
Breach or repudiation

35

What are remedies for breach of contract?

1. The innocent party can enforce the contract in court
Normally damages either liquidated damages (listed in the contract) or unliquidated damages (not listed in the contract) are remedies for breach.

• To successfully enforce a contract and recover remedies, plaintiff must establish that:
a contract between plaintiff and defendant exists; and
breach of one or more terms of the contract has occurred; and
that breach was the cause of loss to plaintiff

36

What are the test to be applied in awarding damages 3 points?

Causation
Mitigation
Remoteness

Causation
loss must be caused by the breach of contract
‘but for’ test: but for the breach, the loss would not have occurred

• Mitigation
plaintiff has duty to take reasonable steps to mitigate (minimise) losses arising from breach
cannot exploit the breach by sitting back and allowing losses to accumulate

• Remoteness
Test for remoteness set down in Hadley v Baxendale(1854) 156 ER 145
Test has two ‘limbs’, and damages only awarded if losses fall within one of the two limbs:
1) reasonably foreseeable losses which flow naturally from the breach, or
2) loss would have been within the reasonable contemplation of the parties (at time of formation of the contract) as a probable result of the breach

37

What is negligence?

•Negligence is conduct (or a failure to act) that breaches a duty to take care
•A person will be negligent if they fail to take reasonable care to prevent loss, damage or injury to others whom they could reasonably foresee might be harmed if that care was not taken
•Negligence is a tort

38

What is a tort?

• A tort is a civil wrong committed by one person (a tortfeasor) which detrimentally affects another
• Different from a crime:
An action for tort is brought by the person who is affected
A crime is prosecuted in court by the state

39

What are the 3 elements of negligence?

Defendant owed plaintiff a legal duty of care:
Did defendant owe a duty to plaintiff to take reasonable care to avoid the injury or harm that occurred

Defendant has breached that duty of care:
Did defendant fail to exercise the required standard of care?

Plaintiff has suffered injury or harm (damage) caused by that breach:
Was plaintiff’s loss or harm caused by defendant’s negligence and was loss or harm reasonably foreseeable?

40

When is a duty of care owed?

• Neighbour test
• You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour*
• Proximity test
• Who, then, in law is my neighbour?

41

What is vicarious liability?

• Employers vicariously liable for torts committed by their employees in the course of their employment

42

How can you succeed in tort for trespass to land?

• Plaintiff must prove direct interference with the land
• Plaintiff does not have to prove damage
the mere act of a continuing or repeated trespass may detract from the land owner’s legal right to enjoy their own land

43

What are defences to action for trespass to land?

To defeat action in trespass, defendant must justify interference with plaintiff’s land

Includes:
Defendant had acquired a legal right to enter the land
• e.g. an easement or licence

Interference was necessary to avert a disaster

A mistake is not justification for trespass

44

What is building enroachment tresspass?

Common law rule is plaintiff entitled to an injunction to prevent the trespass continuing (i.e. alteration or demolition of the building)

Courts have followed ‘good working rule’ to decide when to award damages in lieu of injunction

Seeks to establish whether harm to defendant caused by demolition of encroaching building would be out of all proportion to detriment caused to plaintiff by having to live with permanent encroachment

45

What are the 2 types of nuisances?

Public
Private

46

What is public nuisance?

Unreasonable, unwarranted or unlawful interference with a right common to the general public

47

What is private nuisance?

Unreasonable, unwarranted or unlawful interference with a person’s private use and enjoyment of his or her property

48

What does the QBCC stand for, and what do they do?

• Regulates building industry throughout Queensland
• Set up to provide information, advice and regulation to ensure the maintenance of proper building standards and remedies for defective building work
• Responsible for administering the QBCC Act

49

What is a PBA?

Project Bank Accounts (PBAs)
• From 1 March 2018 for State Government funded projects between $1 million and $10 million
• Head contractor must establish three trust accounts (PBAs):
1. General trust account (to secure progress payments)
2. Retention trust account (to secure retention money)
3. Disputed funds trust account (to secure money which is subject to a payment dispute)

50

What is precedence?

The condition of being considered more important than someone or something else; priority in importance, order, or rank.

51

What is the chain of responsibility for a product?

Product Designer > Product Manufacturer > Product Importer > Product Supplier > Product Installer

52

What are express terms?

Statements made, and included in the contract
Conditions and Warranties
Conditions - important , also called material breach, fundamental parts
Warranties - less important, if breached can only sue for damages

53

What are the terms of the contract?

Express and Implied Terms
Express - Statements either oral or written
Implied - inserted by law, exist even if not stated in contract

54

What tests do courts apply in awarding damages for breach of contract?

Causation - loss caused by breach
Mitigation - losses were mitigated
Remoteness - 2 tests, reasonably foreseeable, and reasonable losses

55

What are exemption clauses

Clauses that protect a company

56

What must a plaintiff prove to recover damages for negligence?

Causation - factual causation (necessary condition to loss), scope of liability (fair to say that defendant is responsible for losses)

Remoteness - Must be relatively foreseeable

57

What is the limitation of actions period for negligence?

Contract - when breach occurs
- 6 years personal injury no claim
(deed) personal injury 12 years

Tort when damage or loss starts
- 6 yrs no personal injury claim
3 yrs personal injury

58

What are implied terms of a contract?

Exist in contracts even if not expressly stated
Inserted into the contract by law