Contract Flashcards
(104 cards)
1
Q
A
2
Q
What is the basic principle of contract law?
A
The parties must be in agreement and have intended to be legally bound, supported by consideration.
3
Q
What is a simple contract?
A
Any form (written, oral, or through conduct of the parties).
4
Q
What types of contracts require writing?
A
- Guarantees
- Contract for the sale or other disposition of an interest in land
- Consumer credit agreements
5
Q
What is a deed?
A
A document intended to be a deed, executed by parties in the presence of a witness and delivered.
6
Q
What are certain contracts that must be made by deed to be enforceable?
A
- Promises where nothing is received in return
- Conveyance of land
7
Q
What is the claim period for contracts by deed?
A
12 years.
8
Q
What is required for an offer to be valid?
A
- Intent: Promise, undertaking, or commitment
- Definite and certain terms
- Communication to the offeree
9
Q
What is an invitation to treat?
A
An invitation for the other party to make an offer, such as advertisements and price lists.
10
Q
What constitutes a unilateral contract?
A
A promise by the offeror contingent upon the offeree doing something in return.
11
Q
How can an offer be terminated by the offeror?
A
- Revocation communicated directly
- Indirectly if the offeree receives reliable information indicating the offeror no longer wishes to make the offer.
12
Q
What is required for acceptance of an offer?
A
The offeree must know of the offer and accept it in a reasonable manner.
13
Q
What is the Postal Rule in contract law?
A
Acceptance by post creates a contract at the moment of posting, unless certain conditions are not met.
14
Q
What is the difference between conditions and warranties in a contract?
A
- Conditions: fundamental terms that go to the root of the contract
- Warranties: incidental terms, breach is less serious.
15
Q
What is the presumption regarding intention to create legal relations in domestic situations?
A
The presumption is that parties do not intend to be legally bound.
16
Q
What are the exceptions to the presumption in social situations?
A
Evidence to the contrary must be presented to rebut the presumption.
17
Q
What is the status of a contract entered by a minor?
A
It is voidable by the minor.
18
Q
What is the legal effect of past consideration?
A
Past consideration is not sufficient unless there is an implied understanding of payment.
19
Q
What is Promissory Estoppel?
A
An equitable principle that gives legal effect to an agreement unsupported by consideration, used only as a defense.
20
Q
What does the Contracts (Rights of Third Parties) Act 1999 allow?
A
A third party can enforce a term of a contract if expressly provided or if the term confers a benefit.
21
Q
What is the parol evidence rule?
A
External evidence cannot add to, subtract from, contradict, or vary the terms of a written contract.
22
Q
What is an entire agreement clause?
A
It states that the written document constitutes the entire agreement between the parties.
23
Q
What is the difference between executed and executory consideration?
A
- Executory consideration: act or forbearance promised in the future
- Executed consideration: act or forbearance performed.
24
Q
What is required for a collateral contract to exist?
A
There must be a distinct contract where the offeree gives consideration for a promise by the offeror.
25
What happens if a party to a contract breaches a condition?
The innocent party has the option to terminate the contract.
26
What is an innominate term?
A term where it is unclear at the outset whether it is a condition or warranty.
27
What is the effect of silence in relation to acceptance?
Silence cannot be treated as acceptance.
28
What is the effect of intoxication on contractual capacity?
A person may not be bound by a contract if the other party knew of their incapacity.
29
What is required for a minor's contract for necessaries to be binding?
The contract must be for necessary goods or services at a reasonable price.
30
What must be proven for a court to recognize a trust?
There must be an irrevocable intention to benefit the third party.
31
What is the requirement for consideration in a contract?
Consideration must move from the promise.
32
What is the significance of the term 'subject to contract'?
It implies that a legally binding agreement will follow.
33
What is required for acceptance by conduct?
Acceptance must be communicated.
34
What is the effect of a counteroffer?
It acts as a rejection of the original offer and constitutes a new offer.
35
What is the role of agency in privity of contract?
An agent can negotiate and enter into contracts on behalf of a principal.
36
What is the legal effect of a breach of warranty?
The breach is less serious, and the remedy is to claim damages.
37
What is the general assumption regarding external evidence in contracts?
External evidence cannot add to, subtract from, contradict or vary the terms of a written contract.
38
What does the Entire Agreement Clause do?
It provides that the written document constitutes the entire agreement between the parties.
39
What are implied terms in a contract?
Terms that are not expressly stated but are assumed to be included based on statute, courts, custom, usage, or a course of dealing.
40
Name the main sources for terms implied by statute.
* Sale of Goods Act 1979 (SGA)
* Consumer Rights Act 1975 (CRA)
* Supply of Goods and Services Act 1982 (SGSA)
41
What rights does the SGA grant to the seller?
The seller has a legal right to sell the goods in question.
42
List the conditions required by the SGA regarding goods sold by a business.
* Match any description applied by the seller
* Be of satisfactory quality
* Be fit for any particular purpose made known by the buyer
43
Define satisfactory quality as per the SGA.
Goods must be fit for purpose, free from minor defects, safe, and durable.
44
What remedies are available for breach of SGA implied terms?
Buyer can terminate the contract, reject the goods, refuse to pay the price, and return the goods.
45
What does the SGSA specify about suppliers?
Suppliers will carry out the service within a reasonable time and with reasonable care and skill.
46
What are the implied terms of the CRA in a consumer context?
* Services carried out with reasonable care and skill
* Completed according to consumer reliance
* Completed for a reasonable price
* Complied within a reasonable time
47
What determines whether a contract has sufficient certainty?
Whether the contract as it stands has sufficient certainty.
48
What is an Exclusion Clause?
A term of a contract that attempts to exclude the liability of one of the contracting parties.
49
What are the rules for incorporation of Exclusion Clauses?
* Must be incorporated into the contract
* Properly drafted to effectively exclude liability
* Not prohibited by statute
50
What does the Contra Proferentem Rule state?
Ambiguities in an exclusion clause are interpreted against the party seeking to rely on the clause.
51
What does the Unfair Contract Terms Act 1977 state about liability for death or personal injury caused by negligence?
Such liability is automatically void.
52
What conditions must be met for a term to be considered reasonable under the Unfair Contract Terms Act 1977?
The term must be fair and reasonable considering the circumstances known to the parties at the time of the contract.
53
Define 'Trader' as per the CRA.
A person acting for purposes related to their trade, business, craft or profession.
54
Define 'Consumer' as per the CRA.
An individual acting for purposes that are wholly or mainly outside their trade, business, craft or profession.
55
What is an Unfair Term under the CRA?
A term that causes a significant imbalance in the parties' rights and obligations to the detriment of the consumer.
56
What are the requirements for transparency and legibility in contracts?
* Drafted in plain language
* Must be legible
57
What is the difference between a void contract and a voidable contract?
* Void contract: lacks legal effect and cannot be enforced
* Voidable contract: valid until a party elects to void it
58
What is 'Mistake' in contract law?
A fundamental error that prevents the formation of a contract or makes the agreement fundamentally different from what was intended.
59
What is 'Duress' in contract law?
Pressure exerted over one party by another, preventing free consent to the contract.
60
What distinguishes 'Undue Influence' from 'Duress'?
Undue influence relates to the manipulation of one party's decision-making, while duress involves illegitimate pressure.
61
Define 'Illegality' in the context of contracts.
Contracts that are illegal when formed or performed in an illegal manner.
62
What constitutes Misrepresentation in contract law?
A false statement of fact or law made to induce another party to enter into a contract.
63
What are the types of Misrepresentation?
* Fraudulent misrepresentation
* Negligent misrepresentation
* Innocent misrepresentation
64
What is the remedy for fraudulent misrepresentation?
The contract is voidable, and rescission may be sought.
65
What is 'Recission' in contract law?
Restoration of parties to their pre-contractual position.
66
What are bars to rescission?
* Affirmation of the contract
* Lapse of time
* Impossibility of restitution
* Third-party rights
67
What is affirmation in the context of contract rescission?
Event that the innocent party decides to carry on the contract; rescission is not available at a later date.
68
What does lapse of time refer to in contract rescission?
Delaying in rescinding, so lose the right.
69
What is meant by impossibility of restitution?
An action for damages.
70
What happens to third-party rights in contract rescission?
Not available if a bona fide third party.
71
What is the impact of fraudulent misrepresentation?
Tortious damage.
72
What is the consequence of negligent misrepresentation?
Tortious damage.
73
What is the status of damages in case of innocent misrepresentation?
Damages are not available.
74
What are damages in lieu of rescission?
When the misrepresentation was minor.
75
What is the effect of exclusion clauses in contracts?
Any attempt to exclude liability or any remedy for misrepresentation will be void unless it is reasonable.
76
What is required for the discharge and variation of a contract?
Agreement containing terms allowing for discharge before full performance.
77
What is the entire obligations rule?
Only full (exact and precise) performance will discharge the contract.
78
What is substantial performance?
Substantial but imprecise performance has been held to be sufficient to discharge obligations.
79
What defines a divisible contract?
The contract is drafted in such a way that the court can subdivide the obligation to perform the components.
80
What constitutes a breach of contract?
When one party does not fulfil its obligations under the contract.
81
What distinguishes termination from rescission?
Termination of breach: rights and obligations accrued before termination remain in place.
82
What is the consequence of actual breach?
A breach taking place at the time due for performance.
83
What is anticipatory breach?
Occurs if one party indicates they are not going to fulfil their obligations before performance is due.
84
What is frustration in contract law?
Automatically discharged due to an external event that occurs after the formation of the contract but before it has been performed.
85
What is the requirement for a contract to be considered frustrated?
Performance would be either impossible or radically different from what was envisaged under the contract.
86
What is supervening illegality?
A change in the law makes continued performance illegal.
87
What is radical difference in contract performance?
A supervening event makes performance radically different from what was envisaged.
88
What does the Law Reform (Frustrated Contracts) Act 1943 state?
All sums paid before discharge will be recoverable; sums payable cease to be payable.
89
What is a Force Majeure clause?
Allows for termination of the contract due to events preventing performance.
90
What are the types of damages in contract law?
Expectation interest, reliance interest, non-monetary losses.
91
What is expectation interest?
Damages for loss of bargains, determined by the cost to cure defects or difference in value.
92
What is reliance interest?
Compensates the innocent party for expenses incurred in reliance on the contract.
93
What are punitive damages?
Not generally awarded in contract cases.
94
When are nominal damages awarded?
If the breach is established but no actual loss is present.
95
What is remoteness in contract law?
If the loss is too remote, recovery will not be allowed.
96
What is causation in contract law?
Whether the breach of contract was an effective cause of the loss.
97
What is the difference between liquidated damages and penalty clauses?
Liquidated damages are a genuine pre-estimate of loss; penalty clauses impose a detriment out of proportion to the obligation breached.
98
What are indemnities in contract law?
One party indemnifies the other against losses arising from a breach.
99
What is a guarantee in contract law?
Promise by one party to ensure another party performs their obligations.
100
What is specific performance?
An order requiring the party in breach to carry out their contractual obligations.
101
What is an injunction?
A court order not to breach the contract.
102
What is restitutionary remedy?
Based on preventing unjust enrichment when one party has acquired a benefit at the expense of the other.
103
What are consumer rights regarding defective goods?
Right to reject defective goods within 30 days for a full refund.
104
What happens if goods are not rejected within 30 days?
Right to require the trader to repair or replace at their expense.
