Chapter 3 - Law of contract Flashcards
(41 cards)
What is a contract under seal?
A contract under seal (also known as a special contract or a contract by deed) is a formal contract that is signed, has the (wax) seal of the signer attached, and is witnessed.
What form can a contract be in?
Contracts can generally be in any form (including that of an oral agreement) although sometimes they must be in writing or be evidenced in writing
Whats the main problem with a verbal contract?
that there is no written evidence that it was formed between
the parties or the terms of the agreement.
it is very difficult to enforce the contract. It is often the word of one person versus the word of another as to whether a verbal
agreement was formed, and the terms thereof.
What is a unilateral contract?
is primarily a one-sided, legally binding agreement where one party
agrees to pay for a specified act.
What is a bilateral contract?
Is legally binding between two or more parties, where the offer by the
the promisor is accepted by the promisee.
Under a bilateral contract each party makes a promise to the other and both are legally bound.
Whats the difference when enforcing a contract between unilateral and bilateral?
a unilateral contract is enforceable when someone chooses to begin fulfilling the act demanded by the offeror, a bilateral contract is enforceable from the time when the contract is signed.
What is a void contract?
A void contract is a formal agreement that is unenforceable
For example, an agreement between a drug dealer and a buyer is void because the terms of the contract are illegal.
What is a voidable contract?
A voidable contract is a formal agreement between two parties that, though valid when made, is liable to be subsequently set aside on a number of different grounds.
What are the 5 essential elements for the formation of a valid contract under english law?
- there must be an agreement,
- there must be the intention to create legal relations;
- there must be consideration e.g. a promise to pay the agreed premium;
- the agreement must be in the form required by law (if any);
- the parties must have capacity to contract.
How is an agreement established in English law?
agreement is usually established by a process of offer and acceptance:
* The party who makes the offer is the offeror.
* The party who receives it is the offeree.
How may an offer be made?
An offer may be made:
* in writing;
* orally;
* by conduct;
* to one person;
* to a group of people; or
* to the public as a whole.
What is an invitation to treat?
An invitation to treat is a statement made when negotiations are still in progress, and not an offer. It is, effectively, an invitation to make an offer.
When an offer is made does this remain open indefinitely?
no
How can an offer end?
A time limit or a ‘reasonable time’
Death
Acceptance
Revocation
Rejection/counter offer
What is acceptance?
If an offer has been made, a contract will come into existence when the offer is accepted, provided all the essential terms of the contract are agreed.
What is the manner of acceptance?
An acceptance, like an offer, can generally be made in any form. It may be through words, either written or spoken, or may be implied by conduct.
What is the posting rule?
The posting rule applies only to acceptance: a letter containing an offer, revocation or rejection will only take effect when it is received.
What is consideration?
‘the price which supports the promise’
What are the rules of consideration?
Consideration must be real or genuine.
Consideration need not be adequate.
Consideration must not be past.
Consideration must move from the promisee.
What is promissory estoppel?
is to hold a party who makes a promise to another accountable for the detriment suffered by the counter party who relied on that
promise.
What are the 4 categories for a contract to take form?
- contracts which must be under seal;
- contracts which must be in writing;
- contracts which must be evidenced in writing by a ‘note or memorandum’; and
- contracts where one party must give certain written particulars to the other.
What contracts must be in writing?
- bills of exchange;
- cheques and promissory notes;
- the transfer of shares in a registered company;
- some consumer credit (‘hire-purchase’) transactions; and
- contracts of marine insurance
WHAT IS MEANT BY CONTRACTUAL CAPACITY?
Some people and bodies are subject to special rules which restrict their contractual capacity.
The main categories are minors, people who are mentally ill or drunk, and corporations.
what ARE THE THREE CATEGORIES CONTRACTS BY MINORS FALL IN to?
Contracts which are binding
Contracts which are binding unless they are repudiated
Contracts which are not binding on the minor
