Contract

Question 1

What are the key things needed to form a contract?

Answer 1

Offer, Acceptance, Consideration, Capacity, ICLR

Question 2

What are the 7 things you need to consider when looking at the formation of a contract?

Answer 2

1. Is the advert/notice/letter/statement an offer or an invitation to treat?
2. If an offer, is there a counter offer for further information?
3. Is the acceptance in response to the offer?
4. Is the acceptance a mirror image (unqualified)?
5. Is the acceptance made using a valid mode?
6. Is the acceptance communicated?
7. At the point of acceptance, is the offer still open?

Question 3

How do you know if an advert/statement etc is an offer or an invitation to treat?

Answer 3

Needs to be a clear and certain offer displaying intention to be bound.

Question 4

What are examples of an invitation to treat?

Answer 4

Advertisements, Displays of goods, Invitations to tender, Auctions

Question 5

What is the exception that an advert is not an offer?

Answer 5

In the case of unilateral offers, Smoke bill case.

Question 6

What are the requirements for an acceptance to be valid?

Answer 6

Must be a mirror image – must match the terms of the offer.

Question 7

What if there’s a counter offer?

Answer 7

It extinguishes the original offer. Cannot then come back and accept the original offer.

Question 8

What about a request for further information?

Answer 8

Original offer remains open.

Question 9

Can an offer be accepted in ignorance of the offer?

Answer 9

No and cannot be accepted by another person – only the person to whom it was made.

Question 10

What are the considerations regarding the mode of acceptance of an offer?

Answer 10

1. Person making offer must specify what mode they want the acceptance in if they want it a certain way. 2. If specified, then only an acceptance in the specified mode will bind the offeror. 3. An acceptance that is no less advantageous will also bind the offeror (Tinn v Hoffman).

Question 11

At what point is the acceptance deemed to be communicated, for post?

Answer 11

Post – a posted acceptance is effective upon posting. Exceptions apply.

Question 12

What if the acceptance is not received?

Answer 12

Offeree at fault = no contract;
Offeror at fault = contract;
Nobody at fault = no contract.

Question 13

What if acceptance is sent outside business hours?

Answer 13

Deemed as received first thing the next day.

Question 14

When will an offer cease to be open?

Answer 14

Rejection (incl counter offer), Lapse, Revocation (postal rule does not apply).

Question 15

Up to what point can revocation happen?

Answer 15

Until acceptance; Revocation must be communicated, and must be received; Binding upon receipt.

Question 16

In social/domestic agreements, is ICLR presumed?

Answer 16

No.

Question 17

When does someone lack mental capacity to enter a contract?

Answer 17

They do not understand, cannot retain, or do not use relevant info to communicate a decision.

Question 18

What are the requirements for consideration to be valid?

Answer 18

Must not be past (Eastwood v Kenyon), Must move from the promise, Need not be adequate, Must be sufficient.

Question 19

Is it possible to vary a contract?

Answer 19

Yes, it is the same as forming a new contract. Same requirements apply.

Question 20

What is the requirement when you try to vary a contract?

Answer 20

Consideration must be exchanged too. E.g good consideration needs to be given.

Question 21

What is promissory estoppel? What are the requirements?

Answer 21

Stops a promisor from going back on their promise. Requirements include a clear promise and change of position in reliance.

Question 22

What are the 3 types of duress?

Answer 22

Duress to person, Duress to property, Economic duress.

Question 23

What is economic duress?

Answer 23

Lack of practical choice caused by illegitimate pressure.

Question 24

What are the types of undue influence?

Answer 24

Overt acts of improper pressure or coercion, Relationship of influence/ascendancy.

Question 25

What are the 3 types of statement?

Answer 25

Representation, Express term, Mere puff – no legal effect.

Question 26

What is the main thing to consider when looking at if a statement is a representation or a term of the contract?

Answer 26

Did the parties intend the statement to be binding?

Question 27

What to consider when thinking of if a statement was intended to be binding?

Answer 27

Importance, Timing, Written contract, Special knowledge, Assumption of responsibility.

Question 28

What are the two types of terms?

Answer 28

Express terms, Implied terms.

Question 29

If it is an express term, then what are the ways it can become part of a contract?

Answer 29

Signed written contract, Incorporation by notice, Other ways of agreeing express terms, Incorporation by a course of dealing.

Question 30

What are the types of implied terms?

Answer 30

Implied in fact, Implied in law.

Question 31

What are the important parts of the Sale of Goods Act?

Answer 31

Description, Satisfactory quality, Fit for regular purpose, Correspond with the sample.

Question 32

What is relevant in the Supply of Goods and Services Act?

Answer 32

Services to be provided with reasonable care and skill.

Question 33

What are the 3 types of BREACHED term?

Answer 33

Warranty, Innominate term, Condition.

Question 34

What remedies are available for warranties?

Answer 34

Damages only.

Question 35

What remedies are available for conditions?

Answer 35

Right of election: affirm and damages OR terminate and damages.

Question 36

What is a condition?

Answer 36

Term going to the root of the contract.

Question 37

What is a warranty?

Answer 37

Less important term, not going to the root of the contract.

Question 38

What is an innominate term?

Answer 38

Uncategorised breached term.

Question 39

What remedies are available for innominate terms?

Answer 39

Ask whether the consequences of the breach deprive the party not in default of substantially the whole benefit from the contract.

Question 40

How do you know if a term is a condition or a warranty?

Answer 40

Ask if the parties intended that any breach would give the innocent party the right of election.

Question 41

What does an exemption clause do?

Answer 41

Acts as a potential way of limiting or excluding a claim in breach of contract.

Question 42

What do you need to consider when thinking if a party can rely on an exemption clause?

Answer 42

Incorporation, Construction, Statutory controls.

Question 43

What is misrepresentation?

Answer 43

Unambiguous, false statement of fact addressed to the claimant which induces the claimant to enter into a contract.

Question 44

What to consider when questioning whether there is a misrepresentation?

Answer 44

Unambiguous, False, Statement of fact, Addressed to C, Induces C to enter into contract.

Question 45

What is NOT a statement of fact?

Answer 45

Statements of opinion, Statements of intention, Silence.

Question 46

What IS a statement of fact?

Answer 46

Conduct, Statement of law, Opinions lacking reasonable grounds, Half truths.

Question 47

How is inducement established?

Answer 47

Representee shows that the statement influenced a reasonable person or was personally induced.

Question 48

What are the 3 types of misrepresentation?

Answer 48

Fraudulent, Negligent, Innocent.

Question 49

What remedies are available if misrepresentation is found?

Answer 49

Fraudulent – recission, damages; Negligent – recission, damages; Innocent – recission, indemnity.

Question 50

What are the 3 types of mistake?

Answer 50

Common mistake, Mutual mistake, Unilateral mistake.

Question 51

What is privity of contract?

Answer 51

The contract is only between the parties who made it.

Question 52

What are the exceptions to the privity rule?

Answer 52

Agency, Assignment, Actions in tort.

Question 53

What are the 5 ways that a contract can come to an end?

Answer 53

Performance, Expiry, Agreement, Breach, Frustration.

Question 54

What is frustration?

Answer 54

Without fault of either party, a contractual obligation has become incapable of being performed.

Question 55

What counts as an event being radically different (enough for frustration)?

Answer 55

Performance is impossible, Performance is illegal, Common purpose is frustrated.

Question 56

What is NOT a frustrating event?

Answer 56

Merely an increase in expense, Caused by default of a party.

Question 57

What are the consequences of a frustrating event?

Answer 57

Contract terminated, Parties discharged from future obligations.

Question 58

What about past obligations that have already happened before the frustrating event?

Answer 58

Look at Frustrated Contracts Act 1943.

Question 59

What are the damages for breach in contract?

Answer 59

Cost of cure, Diminution in value, Loss of amenity.

Question 60

What is the reliance interest?

Answer 60

Allows recovery of expenses incurred in preparing for, or in part performance of the contract.

Question 61

What is the restitution interest?

Answer 61

The interest in restoration of benefits acquired by the defaulting party.

Question 62

What are the 3 limiting factors for remedies?

Answer 62

Causation, Remoteness, Mitigation.

Question 63

What are the types of causation and what is the test?

Answer 63

Factual causation, Legal causation; D's breach is the dominant cause.

Question 64

What is remoteness?

Answer 64

What losses should have been in C's recoverable remit?

Question 65

What is mitigation?

Answer 65

Injured party should take reasonable steps to mitigate the effect of the breach.

Question 66

What are the three remedies available?

Answer 66

Damages, Specific performance, Injunction.