Contract Law

Question 1

Clauses?

Answer 1

Clauses are defined as each party’s duties, rights, and privileges under the terms of the contract

Question 2

Exemption Clauses?

Answer 2

A term in a contract that seeks to restrict the rights to parties under a contract

Question 3

Offer

Answer 3

Carlill v Carbolic Smokeball Company (1893)

An offer is a proposal by one party to enter into a legally binding contract with another. Can be made orally, writing or by conduct.

Question 4

Agreement

Answer 4

An exchange of promises between two or more people whereby one person promises to do something and in return the other person promises to do something else.

Question 5

Intention

Answer 5

Whether the parties to a contract intended it to be legally binding contract or merely a social arrangement

court will examine the behaviour of the parties

Question 6

Consideration

Answer 6

The value that passes from one party to another

The person taking an action must ensure they have given consideration to enforce the contract

Question 7

Repudiation (minors):

Answer 7

Upon becoming an adult, the minor states that they are not prepared to perform their obligations under the contract

Question 8

Ratification (minors):

Answer 8

Upon becoming an adult, the minor confirms that they are prepared to perform their obligations under the contract, making the contract legally binding

Question 9

Warranty

Answer 9

A warranty is a term that, if breached, does not give a party member the right to terminate the contract; it gives rise only to a right to claim damages.
Less important
Damages can be claimed – contract not void

Question 10

Condition

Answer 10

A condition is a term that, if breached, gives a party the right either to terminate the contract or affirm it. In addition, the aggrieved party can also claim damages.
More important
person would not have entered into without it being present
If broken voidable

Question 11

Breach

Answer 11

where one party fails to comply with a term of the contract

Question 12

Breach

Answer 12

Where one party fails to comply with a term of the contract

Question 13

Performance

Answer 13

Contract comes to a natural end because the contract has been fulfilled

Question 14

Defences for Breach of Contract - 6

Answer 14

Misrepresentation 
Mistake
Undue Influence 
Unconscionable Conduct
Duress
Frustration

Question 15

Undue Influence

Answer 15

Undue Influence is the pressure that one party held against another party to enter intro a contract.

Party A could not form an independent judgement about whether to enter the contract
(B must prove they did not influence A)

Question 16

Void

Answer 16

The contract never existed in the first place

Question 17

Voidable

Answer 17

The injured party can decided if the contract is to continue

Question 18

Contract

Answer 18

A promise between two parties that is enforceable by law

Question 19

Unconscionable Conduct

Answer 19

Commercial Bank of Australia v Amardio (1983)
Unconscionable Conduct is where a party takes advantage of another party using their superiority in experience and ability - this is evident in transactions in a way thta offends the conscience.

Being taken advantage of in a transaction in a way that offences the conscience

Taking unfair advantage

Doesn’t matter if it is not particularly advantageous
Those at risk = uneducated, ill, language issues.
Court may set aside the contract

Question 20

To be considered unconscionable

Answer 20

it must be more than simply unfair—it must be against conscience as judged against the norms of society.

Question 21

Injunction

Answer 21

Injunctions are court orders that compel a party to take a specific action or refrain from doing something.

They are considered to be equitable remedies because they address issues that cannot be remedied with monetary damages

Question 22

Capacity

Answer 22

Ability for people to enter into a contract and properly understand their obligations (Cannot if intoxicated, medical problem/illness – Mathews V Baxter

Impaired Mental Capacity

Question 23

Frustration

Answer 23

When events occur after a contract is made which fundamentally change the nature of what the parties had contracted for
E.g. a painter dies before they can paint a portrait

Question 24

Duress

Answer 24

Duress in defined as Threatened or actual application of violence towards a party in order to influence them to induce them to enter into a contract.

Question 25

Mistake

Answer 25

Mistake in contract law is an incorrect understanding by one or more parties to a contract and may be used as grounds to invalidate the agreement

Question 26

Postal Rule

Answer 26

Is defined as the time and place at which the acceptance is posted is the time and place at which the contract will be taken to have been formed.

Question 27

misrepresentation

Answer 27

A misrepresentation is a false statement of fact or law which induces the representee to enter a contract