Contracts Flashcards
Under the postal rule, when is a contract created by mail?
A contract is created at the moment of posting under the postal rule.
When is rejection of an offer effective?
Rejection is effective when received by the offeror.
What must an offeree do to validly accept an offer?
The offeree must communicate their acceptance to the offeror.
What is illusory consideration?
Illusory consideration, such as a promise to stop complaining, is insufficient in the eyes of the law.
What happens if an offer prescribes a specific method of communication?
The prescribed method should be used unless the alternative method is no less disadvantageous to the offeror.
Can leaving an answerphone message replace a prescribed email as acceptance?
No, if there’s no guarantee the offeror will listen to the message, it is not an adequate alternative to an email.
What happens to a unilateral contract once performance begins?
It cannot be revoked or withdrawn once performance has started.
What does ‘subject to contract’ mean?
Parties agree in principle, but they do not intend to be contractually bound until a formal contract is entered into.
How do courts usually interpret advertisements?
Courts typically view advertisements as invitations to treat, not offers. However, price quotations may be considered offers if in response to a specific inquiry.
Is part payment of a debt sufficient to settle the full amount?
No, part payment alone is not sufficient consideration. Exceptions exist where an additional benefit is conferred, such as payment by another method.
What happens when a contract is frustrated?
The contract is automatically discharged, and neither party can sue for damages under it (though the LRFCA may apply).
Can statutory terms be excluded under the CRA 2015?
No, exclusions of implied statutory terms under the Consumer Rights Act 2015 are prohibited and void.
What happens if goods are not fit for the purpose made known to the merchant?
It breaches the condition of fitness, regardless of the trader’s beliefs.
What is required for the conveyance of land?
The actual transfer of land must be executed by deed, not merely a contract for the sale of land.
How do courts handle ambiguous contract terms?
The court will classify an unclear term as an innominate term and assess the effect of the breach to determine remedies.
What determines if a breached term is treated like a condition or warranty?
The court considers if the breach deprives the innocent party of substantially the whole benefit of the contract. If so, it is treated as a condition; otherwise, as a warranty.
When does the postal rule doesn’t apply?
Where the offer states that acceptance will not be effective until received.
What is defence of laches?
Laches is available as an equitable defence if the innocent party has unreasonably delayed in bringing the action and the delay is prejudicial to the other party.
What is the doctrine of waiver?
Generally, for a variation of a contract to be enforceable, it must be supported by consideration to be enforceable. However where a party promises not to enforce the other party’s obligation, the courts may conclude that the agreement is at least temporarily effective through waiver. The waiving party can reinstate the original obligation. However, they must give reasonable notice.
Who can rely on exclusion of liability clause under the Contracts (Rights Against Third Parties) Act 1999?
Third parties named specifically or by group, and it appears the term was intended to be enforcable by the third party
in which circumstances a court will find a contract void due to a common mistake?
the existence of the subject matter (as opposed to its quality)
When is a unilateral contract void?
when the non-mistaken party knew or should have known of the mistake when the contract was formed.
What test is used by courts for implying terms into the contract?
Business efficacy test - to make the contract work as intened (not whether it is reasonable to imply)
When will a contract be discharged of frustration?
- subject matter illegal 2. death 3. subject matter destroyed 4. radically different performance, difference must be fundamental
