Contracts Flashcards
(23 cards)
What is a contract?
A legally binding promise made by two or more parties
Privity of contract
Privity is a common law doctrine which provides that you cannot either enforce the benefit of or be liable for any obligation under a contract to which you are not a party. Only parties to a contract can be sued or sue under it.
A legally enforceable contract needs…
An offer, and acceptance and a consideration
An offer is …
What one party wants from the other under certain terms.
It is considered open until it is rejected or revoked.
An acceptance is…
Party communicates its unqualified acceptance to be legally bound by the terms put forward by the other
Intention to create legal relations
An intention to be legally bound before the contract is formally written up. Sometimes in the form of a letter of intent, it could also be verbal.
Certainty of contract terms
Court can strike out clauses that are not possible to interpret or understand, or have more than one possible meaning.
A consideration is…
Something of value promised in exchange for the work
A contract is void if..
- One or more parties is a minor or intellectual disability preventing free and voluntary signing
- No genuine consent (eg.drugged etc)
- Contract is for an illegal purpose (eg fraud)
Representations are..
Get a better definition
When party A induces party B to do some act which will ultimately mean they suffer detriment
Express terms
Those documented in the agreement (verbal, written etc)
Implied terms
Terms that exist without being stated or written down - implied by the court or a statute
Relevant Legislation with implied terms
- Australian consumer law
- Architects Act (code of conduct)
- Home building act
- Building code of Australia
- Building and construction industry security of payments act
- Common law
Australian consumer law covers…
Misleading and deceptive conduct
Unfair practices
Unconscionable conduct
Consumer guarantees
Home building act covers…
Defect rectification within a certain timeframe (outside contract DLP)
6 years for a breach that results in a major defect
2 years for anything else
Building and construction industry security of payment act covers…
‘Pay now, argue later’ system of facilitating fast track progress payments to the builder (that can be properly disputed later)
Common law implied term….
Negligence - no contract between parties is required
Architect act covers…
Protects architect and consumers, requires adherence to the code of conduct (in Regs)
4 ways to terminate a contract…
All promises fulfilled
Mutual agreement
Contract permits a party to terminate when a certain event occurs
A party breaches an important term of the contract
Repudiation is…
An unwillingness or inability of one party to perform the contract.
Sometime the result of a (unreasonable) reaction to a minor breach.
Damages
Put the party back in the same place they would have been otherwise
Contract administrator’s role is as…
Independent assessor
Client’s agent
They are NOT a party to the contract, nor do they SUPERVISE the works
Back to back contracts are…
Contracts that place the same obligations on parties
Such as requiring a specialist consultant (contracted by the client) to have the same levels of insurance as the architect (also contracted by the client)
