Contract Law

Question 1

What are the 5 essential components of any contract?

Answer 1

Offer, Acceptance, Consideration, Intention to create legal relations, Certainty

Question 2

Define an offer

Answer 2

A statement of specified terms which be legally binding should it be accepted as proposed

Question 3

What are some ‘not offers’?

Answer 3

price lists, advertisements (generally), show display, invitation to tender, auction

Question 4

What 2 components are necessary for acceptance of an offer?

Answer 4

1. Must be absolute and unequivocal (counter offer = not acceptance)
2. must be communicated (exception is postal rule)

Question 5

What is consideration?

Answer 5

Either in some right, interest, profit, or benefit occurring to the one party, or some, detriment, loss or responsibility suffered by the other.

Question 6

How can a contract be discharged?

Answer 6

1. performance of contract
2. mutual agreement
3. breach of contract
4. frustration of contract
5. improper conduct

Question 7

List some remedies for breach of contract

Answer 7

claim for debt ; injunction ; rescission ; damages

Question 8

What is frustration of contract?

Answer 8

Legal device that serves to terminate a contract due to the impossibility of performing it or another frustrating event that was difficult to foresee.

Question 9

What 3 things can cause a contract to become void via improper conduct?

Answer 9

1. Misrepresentation
2. Duress and economic duress
3. Undue influence

Question 10

What is an invitation to treat?

Answer 10

A non binding approach to negotiation or discuss future contractual possibilities

Question 11

What is the general rule about when acceptance takes place?

Answer 11

When it is received by the offeror

Question 12

When does the ‘postal rule’ apply?

Answer 12

Where it is appropriate to make an acceptance by post, and the letter has been addressed and posted correctly

Question 13

Why it is legally possible to buy a failing football club for £1

Answer 13

Consideration must be sufficient in the eyes of the law, but it does not need to be adequate

Question 14

What may a contract contain?

Answer 14

conditions, warranties, innominate terms

Question 15

Under which type of law will a contract be recognised as binding?

Answer 15

civil law

Question 16

What is meant by the “cost of cure” when assessing damages?

Answer 16

The cost of remedying the defective performance

Question 17

What is the aim of a force majeure clause?

Answer 17

reduces the likelihood of contractual disputes and of a frustrating event occurring. Typically drafted very broadly

Question 18

What must happen for misrepresentation and thus protected against by the law

Answer 18

The misrepresentation must have induced the party to enter into the contract

Question 19

What does undue influence relate to?

Answer 19

A third party inappropriately pressurising somebody to enter into a contract with somebody else

Question 20

What is meant by duress / economic duress?

Answer 20

violence of threat of violence / pressure amount to coercion of will

Question 21

What is arbitration?

Answer 21

Bypass the courts’ jurisdiction avoiding unnecessary delay or expense to provide quick resolution