Contract 1 Flashcards

1
Q

What are contracts? And what are the three needed requirements to be successful?

A
Contracts are legal agreements that can be enforced by law.
intention to create a legal; 
i) contractual intention; 
ii) agreement and 
(iii) consideration
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2
Q

What is the first element of a contract?

A

The first element of a valid contract requires the parties to intend to create a legal relationship

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3
Q

What is the second element of a contract?

A

The second element of a valid contract is agreement. Both parties must agree on the subject matter of the contract

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4
Q

When does the first stage of an agreement occur?

A

The first stage in reaching agreement occurs when an offer is made by the offeror to the offeree.

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5
Q

What is not an offer in contract law?

A

An invitation to treat is not an offer in contract law.

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6
Q

What does a counter offer do to an original offer?

A

A counter offer cancels out the original offer.

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7
Q

Acceptance of an offer is the…

A

Acceptance of an offer is the second stage of an agreement and to be effective it must be clearly communicated to the offeror.

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8
Q

When does special rules apply to acceptance?

A

Special rules apply when an offer and an acceptance are made through the post.

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9
Q

What is the third requirement of a valid contract?

A

The third requirement of a valid contract is consideration. This refers to the price paid in exchange for the promises both parties make.

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10
Q

When are contracts invalid?

A

The parties to a contract must have legal capacity or the contract will not be binding.

  • Must not be underage
  • Have the mental capacity
  • They did not freely give their consent
  • A contract of illegal matter
  • If they are under duress or undue influence.
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