Chapter 8

Question 1

Elements of a contract

Answer 1

Intention to create legal relations

Offer an acceptance

Exchange of consideration

Question 2

Consideration

Answer 2

What is exchanged/the value given by each party

Future promises can be a consideration

A benefit can be promised to a third-party

Question 3

Adequate consideration

Answer 3

Means the value being exchanged is around the same or at least a fair value

Question 4

Sufficient consideration

Answer 4

Includes anything of value

Not love, kindness, care, or affection

Question 5

Rule of consideration

Answer 5

Must be sufficient, but doesn’t have to be adequate

Question 6

Past events in contracts

Answer 6

Something a party did prior to contemplation of a contract and cannot be considered in a contract

Question 7

Consideration for pre-existing obligation

Answer 7

Consideration can be a promise to fulfil a pre-existing contractual obligation with the exception that consideration cannot be a pre-existing obligation to perform a public duty

Question 8

Fresh consideration

Answer 8

Means the value exchange to form a contract must be something new

If amendment is taking place there needs to be a new consideration for a new obligation

Question 9

Seals

Answer 9

A symbol of intention for promises to be enforced, even with no consideration

Not required if there is consideration, but sometimes Dunne as a formality

Question 10

Promissory estoppel

Answer 10

Prevent a party for retracting a promise that a person has relied on

Promises are enforcible if
- exchanged for consideration
- if relied upon

Paying rent example

Question 11

Elements of promissory estoppel

Answer 11

Existing legal relationship

Representation
- a clear unambiguous promise made by one party

Reliance
- the promisee relies on the promise

Inequitable behaviour
- it would be unjust or unfair to allow the promisor to go back on their word

Question 12

Privity of contract

Answer 12

Privy refers to how close something is to another

Refers to the relationship that exist between the individuals who created the contract

Question 13

Only parties to a contract can enforce the contract. The exceptions are.

Answer 13

Statute
- law allows for it

Assignment
- a party transfers, their contractual rights to third-party

Trusts
- document created in favour of the third-party beneficiary eg trust fund

Employment
- employees complete the work