Contract Law 2 Flashcards
(211 cards)
1
Q
What does the law enforce regarding obligations?
A
Obligations assumed unless policy says to exclude them to protect vulnerable parties
This reflects the modern idea of enforceability in contract law.
2
Q
What factors contributed to the decline of the classical contract model in the 20th century?
A
- State intervention
- Consumer regulations
- Regulation of commercial agreements
- Standard form contracts
These factors highlight the shift towards protecting consumers and regulating agreements.
3
Q
What are the ideas in favor of freedom of contract?
A
- Moral obligation to keep promises
- Expectation-based remedies
- Economic efficiency
- Wealth maximization
- Risk allocation
These ideas emphasize the importance of individual autonomy in contractual agreements.
4
Q
Does the freedom of contract (FoC) explain the law?
A
Fits some rules: Offer and acceptance, Consideration, ITCLR, Objective approach
However, it does not truly reflect the will of the parties.
5
Q
What are the components of a model contract under freedom of contract?
A
- The bargain
- One-off transactions between strangers
- Offer and acceptance
- Negotiation process
- Consideration
- Terms
- Remedies (Money damages)
This outlines the basic structure of a contract based on freedom of contract principles.
6
Q
What are characteristics of real-world contracts?
A
- Relational contracts
- Evolution over time
- Automated communication
- Standard form contracts and ‘t&cs apply’
- Online contracts
- Market forces and movements
- Risk allocation
- Uncertainty of terms
These characteristics reflect the complexities and dynamics of actual contractual agreements.
7
Q
What is procedural unfairness in contracts?
A
- How the contract was made
- Was the process fairly conducted?
- Did both parties freely agree to be bound?
- Did one party take advantage of the other?
Procedural unfairness addresses the fairness of the contract formation process.
8
Q
What is substantive unfairness in contracts?
A
- Content of terms
- Favorability to one party
- Fairness of agreed terms
- Distinction between bad bargains and procedural unfairness
Substantive unfairness focuses on the actual terms and their impact on the parties involved.
9
Q
What role does consumer bargaining power play in contracts?
A
Most consumer contracts are not the result of a bargaining process
This raises questions about the fairness and equality in consumer contracts.
10
Q
What is the Consumer Rights Act 2015 related to?
A
Consumer protection statutes based on inequality of bargaining power
This act aims to address issues of fairness and protection for consumers in contractual agreements.
11
Q
Should freedom of contract prevail where there has been meaningful negotiation between supplier and consumer?
A
True or False?
This question considers the balance between individual autonomy and consumer protection.
12
Q
What is relational theory?
A
Perspective that considers contracts as evolving relationships rather than rigid agreements
Emphasises ongoing relationships, trust and flexibility
13
Q
What are the key features of relational theory?
A
- Reciprocity is a dominant element
- Some contracts extend over time and involve mutual trust and cooperation
- Every transaction is deeply embedded in a range of interconnected relations
- Contracts change and develop over time
- Ongoing communication between parties
These features highlight the dynamic nature of contracts in relational theory.
14
Q
Give examples of relational contracts.
A
- Employment contracts
- Supply chain agreements
- Construction projects
- Shareholder agreements
These examples illustrate the practical application of relational theory in various contexts.
15
Q
True or False: English law recognises a general concept of good faith.
A
False
Instead, ‘piecemeal solutions’ have been developed in response to various problems.
16
Q
List some mechanisms developed under English law to address good faith.
A
- Regulation of exemption clauses
- Penalty rule
- Duress and undue influence
- The ‘red hand’ rule
- Express provisions requiring good faith
- Implied duties of good faith
These mechanisms are designed to handle issues of good faith in specific contexts.
17
Q
What does contextualism assert about transactions?
A
Manifestations of assent are often messy, implied by conduct, and incomplete
Courts should consider relevant factors outside the express agreement.
18
Q
How does classical contract theory differ from relational contract theory?
A
- Classical theory emphasises formal terms set at the time of contracting
- Relational contracts rely on non-legal norms of trust, expectations, and adaptability
- Relational theory acknowledges long-term relationships
- Classical theory prioritises formally expressed expectations contained in the contract
These differences highlight the contrasting approaches to understanding contracts.
19
Q
What are some critiques of relational contract theory?
A
- Enforceability and judicial interpretation of contracts
- Power imbalances
- Legal (un)certainty
These critiques address potential issues arising from the flexibility and informal nature of relational contracts.
20
Q
Fill in the blank: Classical theory emphasises __________ set at the time of contracting.
A
formal terms
This contrasts with relational contracts which focus on ongoing relationships.
21
Q
What concern arises from power imbalances in relational contracts?
A
One party might exploit flexibility to the disadvantage of the other
Weaker parties may benefit from the protection of contractual formality.
22
Q
Fill in the blank: Absence of clear terms in contracts can result in __________ and, in turn, disputes.
A
unpredictability
This unpredictability can lead to increased litigation risk.
23
Q
A
24
Q
What is the primary goal of damages in breach of contract cases?
A
To enable the claimant to recover in damages what they expected to gain from a contract
Damages protect the claimant’s expectation interest to a certain extent.
25
What are the main remedies available after establishing a breach of contract?
* Damages (liquidated or unliquidated)
* Termination
* Specific performance
* Restitution
## Footnote
These remedies address different aspects of a breach and the claimant's entitlements.
26
What stages need to be addressed in a claim for damages?
* Identify breach, losses, and remedies available
* Measure of loss
* Non-pecuniary loss
* Causation
* Remoteness
* Reduction
## Footnote
Each stage is crucial in determining the outcome of a damages claim.
27
What is the general rule regarding non-pecuniary loss in damages claims?
Damages for non-pecuniary loss, such as mental distress, are generally not recoverable.
## Footnote
Exceptions apply if the contract's purpose was to provide pleasure, relaxation, or peace of mind.
28
What are the steps involved in applying the 'measure' of loss?
* Expectation interest
* Calculate through:
* Different in value
* Cost of cure
* Loss of amenity
* Consumer surplus
* Reliance interest
## Footnote
These calculations are essential for quantifying the loss into an award for damages.
29
What must be established to prove factual causation in a damages claim?
The breach must be a dominant or effective cause of the loss.
## Footnote
Intervening acts may affect this determination.
30
What is the test for remoteness in damages claims?
* Loss arising naturally
* Unusual, abnormal losses require actual knowledge
* Test of reasonable contemplation
## Footnote
The traditional test assesses whether losses were reasonably foreseeable.
31
What is required of the injured party to reduce their damages?
The injured party should take all reasonable steps to mitigate their loss.
## Footnote
This can include accepting another contract from the party in breach.
32
What is the implication of contributory negligence in breach of contract cases?
Only applies where the defendant’s liability is the same as in a negligent breach independent of the contract.
## Footnote
This principle can affect the damages awarded.
33
What are 'agreed damages clauses'?
Clauses that specify a predetermined amount of damages in the event of a breach.
## Footnote
These clauses can simplify the process of determining damages.
34
What is the significance of 'mental distress' in damages claims?
It is generally not recoverable unless tied directly to the breach's failure to provide specific contractual benefits.
## Footnote
This includes cases where physical inconvenience or discomfort is caused.
35
36
What is a lawful legal option following a breach of contract?
Termination of contract
## Footnote
Termination is part of a range of remedies available to the innocent party.
37
What are some reasons for considering termination of a contract?
Relationship breakdown, socio-economic turmoil, strategic decision making
## Footnote
Examples of socio-economic turmoil include financial crashes and pandemics like COVID-19.
38
What must be checked to determine if termination is a lawful option?
Terms of the contract, termination clauses, common law entitlement
## Footnote
The common law entitlement to terminate is based on repudiation.
39
What is actual breach?
Failure or refusal to perform contractual obligations without lawful excuse
## Footnote
It can also occur when a party incapacitates themselves from performing.
40
What is anticipatory breach?
Indication by one party of an intention not to perform before performance is due
## Footnote
This can be through renunciation or incapacity.
41
What does repudiation signify in contract law?
Renunciation or incapacitation by one party
## Footnote
It allows the innocent party to treat the contract as discharged immediately.
42
What are conditions in the context of breach of terms?
Terms treated as a repudiation, allowing discharge of the contract
## Footnote
Contracting parties classify the importance of terms in their contract.
43
Define innominate terms.
Unclassified terms not categorized as conditions or warranties
## Footnote
They can be breached in various ways.
44
What is the Substantial Whole Benefit (SWB) test?
Assessment of benefit sought vs actual breach
## Footnote
It considers seriousness of loss caused, value of performance received, and adequacy of damages.
45
What is the right of election in contract law?
Option to affirm the contract or terminate
## Footnote
It involves unequivocal intention and can be irrevocable.
46
List the ways a contract can come to an end.
* Discharge by performance
* Discharge by agreement
* Discharge by frustration
* Discharge by breach (repudiatory)
## Footnote
This includes renunciation or anticipatory breach.
47
What is required for claiming the contract price after a breach?
Need for contract breaker's cooperation, no legitimate interest
## Footnote
Cooperation is essential for enforcing claims.
48
True or False: Termination of contract can undermine contractual security.
True
## Footnote
Common law sets a high threshold for lawful termination to protect contractual security.
49
50
What is the definition of frustration in contract law?
Occurs whenever law recognizes that without default of either party, a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract
## Footnote
A frustrating event discharges the contract.
51
What is one common law ground for frustration?
Impossibility
## Footnote
Where a contract becomes impossible to be performed (e.g., because the subject matter is destroyed).
52
Give an example of a frustrating event.
Subject matter destroyed, death, illness, temporary unavailability of subject matter
## Footnote
These events can lead to the frustration of a contract.
53
What is frustration of purpose?
A contract may be frustrated where the common purpose for which the contract was entered into can no longer be carried out
## Footnote
This applies even if it is still physically possible to continue with the contract.
54
How does supervening illegality relate to frustration?
Frustration can occur where a change in law or government intervention makes performance illegal.
55
What is a limitation to frustration regarding contracts that become more difficult to perform?
Contracts that become more difficult or expensive to perform are not generally held to have been frustrated.
56
What is self-induced frustration?
Frustration will not apply where the event was induced by one of the parties.
57
How do foreseeable events affect the frustration doctrine?
If the event was foreseeable and not provided for in the contract, then the frustration doctrine will not apply
## Footnote
By failing to make provision for it, the parties are considered to have implied acceptance of the risk.
58
What are force majeure clauses?
Express contractual provision for strikes, floods, fires, closure of shipping lines, etc.
59
What are some potential effects of frustration?
Law Reform (Frustrated Contracts) Act 1943
## Footnote
This Act outlines the implications of frustration in contract law.
60
61
What is an agreement mistake?
Mistake as to identify
## Footnote
Refers to a misunderstanding regarding the identity of the parties involved in a contract.
62
What distinction is made in the context of contracts?
Distinction made between contracts made in writing and contracts made orally (or face-to-face)
## Footnote
This highlights the importance of the method of contract formation.
63
What does a mistake as to the nature of the document signed refer to?
Mistake as to the nature of the document signed
## Footnote
Indicates that a party may not fully understand the legal implications of the document they are signing.
64
What is a mistake as to a term of the contract?
Mistake as to a term of the contract
## Footnote
Involves misunderstanding specific terms or clauses within the contract.
65
What are the two types of mistakes in contracts?
Unilateral or mutual (cross purposes mistake)
## Footnote
Unilateral mistake involves one party, while mutual mistake involves both parties misunderstanding.
66
What is meant by agreement mistake in equity?
Agreement mistake in equity
## Footnote
Refers to mistakes that may be remedied through equitable principles.
67
What is equitable relief?
Equitable relief
## Footnote
A judicial remedy that provides fairness rather than monetary compensation.
68
What does rectification mean in contract law?
Rectification
## Footnote
The process of correcting a written contract to reflect the true intentions of the parties.
69
What characterizes a common mistake?
Fundamental – unknown to the parties, the contract (as agreed) is impossible to perform
## Footnote
A common mistake occurs when both parties are unaware that the contract cannot be fulfilled.
70
What is res exitincta?
Mistake as to subject matter
## Footnote
Refers to a situation where the subject matter of the contract does not exist at the time of the agreement.
71
What happens if the subject matter of the contract is not in existence?
There can be no contract
## Footnote
If the subject matter is nonexistent (res extincta), the contract is void.
72
What does res sua refer to?
Mistakes as to ownership
## Footnote
Involves a misunderstanding regarding the ownership of the subject matter of the contract.
73
What is the implication of a mistake as to quality?
Generally not sufficiently fundamental to render the contract void at common law
## Footnote
A mistake about quality does not usually make performance impossible.
74
75
What is the key case involving a dispute over the interpretation of a contract concerning the sale of goods?
Schuler AG v Wickman Machine Tool Sales Ltd (1974)
## Footnote
This case addressed the importance of clear contract terms and the implications of breach.
76
Which case is significant for its ruling on the non-performance of contractual obligations?
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd
## Footnote
This case highlighted the distinction between conditions and warranties in contracts.
77
What case dealt with the issue of misrepresentation in a contractual context?
Farley v Skinner 2001
## Footnote
This case involved claims of misrepresentation affecting the decision to enter into a contract.
78
What is the name of the case that addressed the issue of quantifying damages in a construction contract?
Ruxley Electronics
## Footnote
This case is notable for its discussion on the measure of damages and loss of amenity.
79
Fill in the blank: The case _______ involved a dispute regarding the interpretation of a contract for the sale of goods.
Schuler AG v Wickman Machine Tool Sales Ltd (1974)
## Footnote
This case is often referenced in discussions about contractual obligations.
80
True or False: Farley v Skinner is primarily concerned with breach of contract.
True
## Footnote
The case focuses on issues related to misrepresentation rather than direct breach.
81
What legal principle was established in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd?
Distinction between conditions and warranties
## Footnote
This principle helps determine the remedies available for breach of contract.
82
What key issue was addressed in the case Ruxley Electronics?
Quantifying damages and loss of amenity
## Footnote
The case set a precedent for how damages are assessed in construction disputes.
83
84
What constitutes illegitimate commercial pressure?
Commercial pressure is illegitimate if it is unlawful or involves a threat that a person knows they are not entitled to make.
85
How is a threatened breach in bad faith viewed in the context of illegitimate pressure?
A threatened breach in bad faith is more likely to be considered illegitimate than one made in good faith.
86
When is the threat of lawful action not considered illegitimate?
The threat of lawful action is not considered illegitimate in the absence of bad faith or unconscionable behavior.
87
Does good faith save an otherwise illegitimate threat?
Good faith will not generally save an otherwise illegitimate threat.
88
Can a threat of a lawful act in bad faith be illegitimate?
Probably, but the definitions of 'bad faith' and 'unconscionable or reprehensible behavior' need clarification.
89
Can a threat to breach a contract in good faith be legitimate?
Possibly.
90
What is the significance of the Times Travel case regarding lawful act duress?
The Times Travel case missed an opportunity to clarify the law by limiting duress to unlawful acts and threats.
91
How does Lord Hodge describe lawful act economic duress?
Lawful act economic duress must be understood within the framework of equity, which protects weaker parties in specific cases.
92
What is the role of inequality of bargaining power in commercial negotiations?
Inequality of bargaining power alone does not justify judicial intervention; it is for Parliament to regulate such imbalances.
93
What are the key components of the economic duress test?
* No realistic choice
* Time
* Other commitments
* Threat is illegitimate
* Distinguishing between normal bargaining pressure and abnormal abuse of power
* Causation
94
What does lack of practical choice mean in the context of economic duress?
It refers to a compulsion of the will that vitiates consent, interpreted as a lack of realistic choice.
95
What must illegitimate pressure involve?
Illegitimate pressure must involve a threat that is distinguished from normal commercial bargaining.
96
What is the relationship between duress and defective consent?
Duress requires that consent be overborne by compulsion for it to be established.
97
What does Lord Diplock explain about duress?
Duress does not mean the affected party was unaware of the contract’s terms, but that their consent was pressured in a way deemed illegitimate.
98
What is the threshold for recognizing duress in courts?
The courts set a high threshold for recognizing duress, intervening only in extreme cases of pressure.
99
What kind of fairness does the doctrine of economic duress promote?
* Procedural fairness
* Substantive fairness
100
What does procedural fairness refer to in the context of economic duress?
Procedural fairness refers to the conditions of choice, not the outcome.
101
What does substantive fairness concern in economic duress?
Substantive fairness concerns the substance of the bargain and the fairness of its terms.
102
103
What is undue influence?
Equitable doctrine involving exploitation or abuse of bargaining position.
104
What relationship does undue influence have with duress?
Both relate to coercion, but undue influence is an equitable doctrine.
105
How has undue influence been defined by courts?
It has never been precisely defined and involves unfair or improper conduct.
106
What are the two types of undue influence?
* Actual undue influence (class 1) * Presumed undue influence (class 2)
107
What characterizes actual undue influence?
Domination cases where something is actually done.
108
What must be established for presumed undue influence?
Relationship of influence, advantageous transaction, and not explicable on ordinary motives.
109
What are examples of relationships that create a presumption of undue influence?
* Parent and child * Trustee and beneficiary
110
What serves as prima facie evidence of undue influence?
A transaction that cannot be reasonably explained by the relationship.
111
What is a suspicious transaction example?
Unexpected gifts or transfers of property for free.
112
What must the defendant do regarding the presumption of undue influence?
Rebut the presumption by showing the claimant acted freely.
113
What demonstrates that a claimant acted of their own free will?
Receiving legal advice.
114
What concerns did Lord Nicholls express in Royal Bank of Scotland v. Etridge (2001)?
Quality of legal advice, particularly for vulnerable individuals.
115
Does contract law generally allow for interference in the fairness of contract terms?
No, it focuses on the freedom of contract.
116
What motivates legal intervention despite contract law's rejection of substantive unfairness?
Procedural defects rather than direct assessment of fairness.
117
What is required for a transaction to be considered advantageous to the claimant?
It must not be explained on ordinary motives.
118
What is the significance of the Allcard v Skinner [1887] case in relation to undue influence?
It illustrates the concept of unfair or improper conduct leading to personal advantage.
119
Fill in the blank: Undue influence involves _______ or improper conduct.
[unfair]
120
Fill in the blank: Certain relationships create a presumption of _______.
[influence]
121
122
What is the case name associated with the principle of intention to create legal relations in social and domestic arrangements?
Balfour v Balfour [1919] KB 571
123
Which case rebutted the presumption of no intention to create legal relations in domestic arrangements?
Merrit v Merritt [1970] 1 WLR 1211
124
What is the case that established the objective approach to agreements?
RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH [2010] UKSC 14
125
Fill in the blank: An invitation to treat can be exemplified by the case _______.
Partridge v Crittenden [1968] 1 WLR 1204
126
What case is known for establishing the rules regarding counter-offers?
Hyde v Wrench (1840) 3 Beav 344
127
Which case is significant for the acceptance of offers in contract law?
Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3
128
What is the case that illustrates revocation of an offer?
Routledge v Grant (1828) 4 Bing 653
129
Which case is associated with unilateral contracts?
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
130
Name one case that addresses consideration in contract law.
Currie v. Misa (1875) L.R. to Exch. 153,162
131
Fill in the blank: Consideration must be 'sufficient' but need not be _______.
adequate
132
What is the significance of the case Re McArdle [1951] Ch 669?
Consideration must not be in the past
133
Which case is known for addressing the modification of promises?
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5
134
What is the principle established in Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130?
Promissory estoppel
135
Which act regulates exemption clauses in contracts?
The Unfair Contract Terms Act (UCTA) 1977
136
What is the test for reasonableness under the UCTA?
Section 11
137
Fill in the blank: The Consumer Rights Act 2015 regulates _______ clauses.
exemption
138
What type of misrepresentation is illustrated by the case Derry v Peek (1889) 14 App Cas 337?
Fraudulent misrepresentation
139
Name the act that addresses negligent misrepresentation.
s2(1) Misrepresentation Act 1967
140
What is a remedy for misrepresentation involving the return to the original position?
Rescission
141
Fill in the blank: Damages for fraud fall under the tort of _______.
deceit
142
What is the tort of deceit?
Fraud
## Footnote
Involves misrepresentation that leads to a loss.
143
Which case is associated with the tort of deceit?
Doyle v Olby (Ironmongers) [1969] 2 QB 15
## Footnote
This case established key principles in deceit.
144
What type of misrepresentation is involved in Smith New Court Securities v Scrimgeour Vickers?
Fraudulent misrepresentation
## Footnote
A significant case in the context of securities fraud.
145
What is negligent misrepresentation?
A false statement made carelessly that leads to loss
## Footnote
It differs from fraudulent misrepresentation.
146
Which case is associated with negligent misrepresentation?
Royscot Trust Ltd v Rogerson [1991] 2 QB 297
## Footnote
This case illustrates the application of negligent misrepresentation.
147
What is innocent misrepresentation?
A false statement made without fault
## Footnote
It does not involve deceit or negligence.
148
Which case exemplifies innocent misrepresentation?
Salt v Stratstone Specialist Limited T/A Stratstone Cadillac Newcastle [2015] EWCA Civ 745
## Footnote
This case clarifies the boundaries of innocent misrepresentation.
149
What is duress to person?
Coercion involving threats to physical safety
## Footnote
It can invalidate consent in contracts.
150
Which case is related to duress to person?
Barton v Armstrong [1976] AC 104
## Footnote
This case demonstrates how duress can affect contractual agreements.
151
What is economic duress?
Coercion that leads to economic loss or detriment
## Footnote
It can make a contract voidable.
152
Which case is an example of economic duress?
The Siboen and The Sibotre [1976] 1 Lloyd’s Rep 293
## Footnote
This case discusses the concept of economic duress.
153
What is illegitimate pressure in contract law?
Pressure that deprives a party of free will to contract
## Footnote
It can render a contract voidable.
154
Which case illustrates illegitimate pressure?
CTN Cash and Carry Ltd v Gallagher Ltd [1994] 4 All ER 714
## Footnote
This case highlights the impact of illegitimate pressure on contracts.
155
What is causation in legal terms?
The relationship between conduct and the resulting harm
## Footnote
It is essential for establishing liability.
156
Which case is significant for understanding causation?
Huyton SA v Peter Cremer GmbH & Co [1999] 1 Lloyd’s Rep 620
## Footnote
This case addresses the principles of causation in tort law.
157
What is actual undue influence?
Direct coercion or pressure to influence a party's decision
## Footnote
It can invalidate consent in agreements.
158
Which case exemplifies actual undue influence?
BCCI v Aboody [1990] QB 923
## Footnote
This case clarifies the concept of actual undue influence.
159
What is presumed undue influence?
Influence that is presumed due to the relationship between parties
## Footnote
It does not require direct evidence of coercion.
160
Which case is an example of presumed undue influence?
Allcard v Skinner (1887) 36 Ch D 145
## Footnote
This case establishes the presumption of undue influence in certain relationships.
161
What is unconscionability in contract law?
A situation where one party is unfairly disadvantaged in a contract
## Footnote
It can lead to the contract being deemed unenforceable.
162
Which case addresses the issue of unconscionability?
Fry v Lane (1888) 40 Ch D 312
## Footnote
This case discusses principles of unconscionability.
163
What is the expectation interest in damages?
The loss of what a party expected to receive from a contract
## Footnote
It is a primary measure of damages.
164
Which case is significant for the expectation interest?
Ruxley Electronics v Forsyth [1996] AC 344
## Footnote
This case addresses how expectation interest is calculated.
165
What is the reliance interest in damages?
Compensation for expenses incurred based on reliance on a contract
## Footnote
It focuses on losses suffered due to reliance on a promise.
166
Which case exemplifies reliance interest?
Anglia Television Ltd v Reed [1971] 3 All ER 69
## Footnote
This case demonstrates the reliance interest in damages.
167
What is non-pecuniary loss?
Loss that does not involve direct financial compensation
## Footnote
Examples include emotional distress or loss of enjoyment.
168
Which case addresses non-pecuniary loss?
Farley v Skinner [2001] UKHL 49
## Footnote
This case illustrates how non-pecuniary loss is treated in law.
169
What is remoteness in the context of damages?
Limiting liability to losses that are foreseeable
## Footnote
It ensures that defendants are not held liable for all consequences.
170
Which case is significant for understanding remoteness?
Hadley v Baxendale (1854) 9 Ex 341
## Footnote
This case establishes the foundational principles of remoteness.
171
What is mitigation in the context of damages?
The obligation to minimize losses after a breach
## Footnote
Parties must take reasonable steps to limit their damages.
172
Which case is significant for the principle of mitigation?
British Westinghouse Electric and Manufacturing Co v Underground Electric Rail Co [1912] AC 673
## Footnote
This case discusses the duty to mitigate damages.
173
What is contributory negligence?
A legal doctrine that reduces damages based on the plaintiff's own fault
## Footnote
It assesses the degree to which a plaintiff's actions contributed to their loss.
174
Which case illustrates contributory negligence?
Forsikringsaktieselskapet Vesta v Butcher [1986] 2 All ER 488
## Footnote
This case examines the principles of contributory negligence.
175
176
What must exist for an agreement to be legally binding?
Intention to create legal relations (ITCLR)
## Footnote
ITCLR must be judged objectively.
177
How are the intentions of the parties judged?
Objectively
178
What is the presumption regarding ITCLR in domestic or social arrangements?
Rebuttable presumption of no intention to create legal relations
179
Under what condition can the presumption of no ITCLR be rebutted?
When facts indicate there was an intention to create legal relations
180
What is the presumption regarding ITCLR in commercial arrangements?
Rebuttable presumption of intention to create legal relations
181
What may rebut the presumption of ITCLR in commercial arrangements?
Facts indicating no intention to create legal relations
182
How is the existence of an agreement determined?
By ascertaining the objective intentions of the parties
183
What is an invitation to treat?
A willingness to receive offers or enter into negotiations
184
What does an invitation to treat lack?
Intention to be bound and certainty
185
What is an offer?
An expression of willingness to be bound on certain terms
186
What is a counter-offer?
A rejection of the terms of an offer
187
What happens to the original offer when a counter-offer is made?
It is extinguished
188
What is acceptance in the context of contract formation?
Final and unqualified assent to the terms
189
What must acceptance be in response to?
An offer
190
What must acceptance do in relation to the offer?
Match the offer
191
What must be done with acceptance for it to be valid?
It must be communicated to the offeror
192
When must revocation take place?
Before acceptance
193
When is revocation effective?
Upon receipt
194
195
What is consideration in contract law?
Something of value given in exchange for a promise that turns it into a legally enforceable obligation
196
Why is consideration necessary in a contract?
It is necessary for a valid contract to be enforceable
197
What must consideration be recognized as?
Of value in the eyes of the law
198
What must consideration not be?
In the past
199
What happens if consideration is given before a promise is made?
It cannot be said to have been given in support of the promise, making the promise unenforceable
200
What is the requirement for consideration?
Must move from the promise
201
What is an exception to the past consideration rule?
If there was a prior request and an implied promise of remuneration
202
What is the pre-existing duty rule?
Performance of something already required or promised is generally held not to be valid consideration
203
Is a promise to pay more valid consideration?
No, performance of a pre-existing duty is not good consideration
204
What can support a promise?
Additional or fresh consideration
205
What is a practical benefit in relation to consideration?
A practical benefit to the promisor can support a promise
206
What happens if there is part-payment of a debt?
Part-payment of a debt is not good consideration
207
What can support a promise to discharge a debt?
Additional consideration or a new element given in exchange
208
What is required for a promise to discharge a debt to be supported by consideration?
Something different or a new element must be given in exchange
209
What is a practical benefit to the promisor?
It may support the finding of consideration
210
What is promissory estoppel?
A principle that may stop the promisor from going back on their promise
211
Under what condition can promissory estoppel be applied?
Where a promisee has acted in reliance on a promise
