Contract Law

Question 1

Discharge by frustration

Answer 1

Events occur making it impossible or making the contract fundamentally different. No fault of individual parties

Question 2

Discharge by frustration reasons (4)

Answer 2

1. Destruction of subject matter
2. Inability to achieve the main object
3. Change in laws/government actions
4. Death/permanent illness of a party

Question 3

Express terms

Answer 3

Terms specifically agreed upon orally or written at the time the contract is made

Question 4

Condition

Answer 4

• Fundamental term
• A breach gives the innocent party to claim damages
• Gives the right to TERMINATE contract if necessary

Question 5

Parol evidence rule

Answer 5

If a contract is in written form, no outside evidence makes the terms change

Question 6

Innominate

Answer 6

Intermediate-term disagreed on. Unclear if it is a warranty or a condition.

Question 7

Contract classification terms (3)

Answer 7

1. Condition
2. Warranty
3. Innominate

Question 8

Discharge by performance

Answer 8

Precisely the things both parties wanted and agreed upon have to be completed

Question 9

Discharge by performance

–> Exceptions (2)

Answer 9

1. Substantial performance

2. Divisible contract

Question 10

Contract

Answer 10

A voluntary agreement made between two or more parties

Question 11

A term used for contract breach

Answer 11

Contractual liability

Question 12

Duress

Answer 12

When a party enters a contract due to violence, threats or something in that direction. (economic pressure as well)

Question 13

Undue influence

Answer 13

Improper pressure put on someone

Question 14

Contract termination cases (6)

Answer 14

1. Void contract
2. Voidable contract
3. Performance
4. Breach
5. Agreement
6. Frustration

Question 15

Exclusion clause

–> conditions (3)

Answer 15

Its purpose is to limit or exclude liability for one party when breaching a contract.

• Must cover the exact circumstances
• Can’t defeat the main purpose of the contract
• Judges decide if it is a fundamental breach

Question 16

Transfer of property

Answer 16

The transfer of OWNERSHIP RIGHTS

Possession would mean having but NOT OWNING something.

Question 17

When does ownership pass?

Answer 17

As soon as the risk passes. The future owner has to be in possession.

Question 18

“offer and acceptance”

Answer 18

The party must be aware of it not being an invitation to treat (negotiate)

Question 19

Conditions to be an OFFER (3)

Answer 19

1. Offer must be clearly communicated
2. The terms must be certain
3. The offer must still be available (not terminated)

Question 20

Classification of contract terms (6)

Answer 20

1. Condition
2. Warranty
3. Innominate
4. Express terms
5. Exclusion clauses
6. Implied terms

Question 21

Contract termination

–> Discharge types (4)

Answer 21

1. Discharge by performance
2. Discharge by agreement
3. Discharge by frustration
4. Discharge by breach

Question 22

What is a “Consideration” in a contract?

Answer 22

Something of value (consideration) that will be exchanged for another thing of value (consideration)

Question 23

Types of consideration (2)

Answer 23

1. Bilateral - Exchange of promises
2. Unilateral - Act in return of a promise

*Note: mustn’t be of equal value for both

Question 24

Mistake (Voidable contracts)

–> types (4)

Answer 24

1. Non est factum
2. Mistaken identity
3. Common mistake
4. Mutual mistake

Question 25

Non est factum

Answer 25

A fundamental mistake in the NATURE of the contract

Question 26

Mistaken identity

Answer 26

One party is mistaken as to the Identity of the other party

Question 27

Common mistake

Answer 27

Both parties are mistaken about the same thing

Question 28

Mutual mistake

Answer 28

Parties misunderstood each other; no real agreement

Question 29

Employment contract types (2)

Answer 29

1. Contract for services | 2. Contract of service

Question 30

Contract FOR services

Answer 30

An independent contractor

Question 31

Contract OF service

Answer 31

A contract between employer and employee

Question 32

Discharge by agreement | --> scenarios (3)

Answer 32

Both parties agree to end the contract - Bilateral - Unilateral - Automatic

Question 33

Breach of employment | --> reasons (6)

Answer 33

1. Theft/document falsification 2. Fighting/bullying/violence 3. Harassment 4. Vandalism 5. Deliberate unauthorized computer use 6. Posting derogatory comments about the employer

Question 34

Breach of contract

Answer 34

When a party failed to perform the agreed terms *Note: The court is not interested in the motive but rather if you did or not do it

Question 35

Sale of goods contracts include? (4)

Answer 35

1. A contract 2. A sale of a good 3. A transfer of property (ownership) 4. Money consideration (price)

Question 36

Types of written contracts (4)

Answer 36

1. Deed to transfer land 2. Hire purchase 3. Share transfer/copyright 4. Bills of exchange

Question 37

Warranty

Answer 37

- A minor term in a contract - A breach gives the right to claim damages - CANNOT terminate contract

Question 38

Invitation to tender

Answer 38

An invitation to make people say how much they would charge to supply goods/services *Note: A response to an invitation to tender is considered an OFFER

Question 39

Illegality

Answer 39

Contracts for criminal purposes, against morality/public policy

Question 40

Restraint of trade

Answer 40

Restricts trade is prima facie void unless reasonable between parties and not against public interest

Question 41

Misrepresentation | --> requirements (3)

Answer 41

Statements made by parties prior to contract 1. Statement of fact, not opinion 2. Made before or at the time of contract 3. Must include the party to enter the contract

Question 42

Misrepresentation types (3)

Answer 42

1. Innocent misrepresentation 2. Negligent misrepresentation 3. Fraudulent misrepresentation

Question 43

Remedies to misrepresentation (3)

Answer 43

1. In equity 2. In tort 3. Legislation

Question 44

Innocent misrepresentation

Answer 44

When someone has reasonable grounds for believing that their false statement was true

Question 45

Negligent misrepresentation

Answer 45

the defendant is not judged for not having known that the statements made were false. He is judged for not having had reasonable grounds for believing they were true.

Question 46

Fraudulent misrepresentation | --> conditions (3)

Answer 46

1. the party making the statement is aware that it is false or disregards the possibility of it being false 2. the party making the statement does so to induce another party to enter into a contract 3. the other party enters the contract as a result of the statement and consequently suffers a loss.