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Final Review: Contract Flashcards

(61 cards)

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1
Q

Most contracts do not need to be in writing to be enforceable. What are the exceptions?

A
  • Guarantee
  • Contract for the sale of land
  • Consumer Credit transaction
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2
Q

What are the requirements of a valid Deed?

A
  • Must make clear on it’s face that it is a Deed
  • Executed in the presence of a witness
  • Delivered
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3
Q

What types of conveyances MUST be made my Deed?

A

A conveyance of land.

NOTE: If a gift is made by deed, it is also enforceable, but gifts need not be made by deed (they can just be gifts)

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4
Q

When must a contract claim be brought? (Simple K v. Deed)

A

K: Within 6 years

Deed: Within 12 years

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5
Q

What are common examples of Invitations to Treat?

A
  • Adverts
  • Goods in a shop window (even w price)
  • Price lists
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6
Q

When can an offer NOT be revoked?

A

Bilateral K: Any time before the offeree accepted by starting performance

Unilateral K: Any time before performance has begun

Any collateral K where consideration is given to keep the option open

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7
Q

How can an offer be rejected?

A
  1. Expressly
  2. By counteroffer
    - NOT just mere inquiry “would you consider selling for less?”
  3. Lapse of time (if stated, or a reasonable time)
  4. Operation of law
    - A party dies
    - Subject matter destroyed
    - Illegality
    - Condition of offer isn’t met
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8
Q

If an offer stipulates a method of acceptance, may the offeree choose another method?

A

Yes, if no less advantageous

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9
Q

What is the Postal Rule?

A

Acceptance is effective when posted, UNLESS:
- it is incorrectly addressed/stamped
- Acceptance by post was not reasonable
- Offer states acceptance is not valid until received

NOTE: Does not apply to email

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10
Q

Is there a presumption when an arrangement is made between family members/friends?

A

There is a rebuttable presumption that the parties did NOT intend to be legally bound (i.e., no contract formed)

NOTE: If there arrangement is commercial in nature, regardless of their relationship, the presumption is likely rebutted.

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11
Q

Is there a presumption when an arrangement is made in commercial settings?

A

There is a presumption the parties DID intend to be legally bound, unless there is clear and unambiguous evidence otherwise (e.g., “subject to contract”)

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12
Q

If a minor enters a contract, is it enforceable against the minor?

A

Generally, the contract is voidable by the minor unless they adopt it when they turn 18.

However, minors can be bound by:
- Contracts for necessary goods and services
- Employment Contracts

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13
Q

If someone without mental capacity enters into a contract (assume not a minor), is it enforceable against them?

A

Generally, it is voidable by the person without mental capacity ONLY IF the other party knew of their incapacity.

Even then, contracts at a reasonable price for necessities is enforceable.

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14
Q

If someone promises to accept partial repayment of a debt, is this sufficient consideration to be enforceable?

A

By itself, no.

Exceptions:
- Debt was disputed in good faith
- Claim was uncertain
- Payment is at a different place of time
- Payment is by different means (i.e., goods instead of cash)
- Composition w creditors to all accept less than is owed from debtor

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15
Q

When can Promissory Estoppel enforce a contract?

A
  • Promise not to rely on existing legal rights
  • Promisee detrimentally relies on that promise
  • It would be inequitable for the promisor to renege on their promise

Example: Landlord promised not to reduce tenant’s rent during COVID lockdown. Tenant then uses the extra rent money to buy food and clothes.

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16
Q

When may a 3P enforce a contract? When can they not?

A

They CAN if:
1. K expressly provides that they can
2. K confers a benefit on 3P with the apparent intent to allow them to enforce it.
- NOTE: Obligation is not enforceable against the 3P, only 3P can enforce

They CANNOT if:
- It is an employment contract
- It is a company’s articles of association

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17
Q

If a 3P has rights under a contract, can the contracting parties change the terms to the detriment of the 3P?

A

No, if
- 3P has agreed to the term benefitting them,
- 3P has relied on the term benefitting them and the promisor is aware of this, OR
- The promisor should have foreseen the 3P would rely on the term, and the 3P did rely on the term.

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18
Q

What is a “representation”

A

A term that induces someone to enter a contract.

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19
Q

What is a “term”

A

A statement of law or fact which is part of the contract.

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20
Q

What are the types of “terms” in a contract?

A
  • Conditions
  • Warranties
  • Innominate Terms
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21
Q

Conditions v Warranties

A

Conditions: A term so fundamental it goes to the root of the K.

Warranties: A term incidental to the main terms.

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22
Q

Remedies for breaching a condition v warranty

A

Breach of a Condition:
- Non-breaching party can terminate the K and sue for damages

Breach of Warranty:
- Non-breaching party can sue for damages.

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23
Q

Remedies for breaching an Innominate Term?

A

Look at the effect of the breach on the non-breaching party.

Will they lose substantially the whole benefit of the contract? Then breach of condition.

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24
Q

What evidence does the Parole Evidence Rule bar when interpreting a contract? What does it not?

A

Generally, external evidence CANNOT add to or contradict the terms of a written contract.

The rule does NOT bar introduction of evidence of:

INCORPORATED Terms:
- E.g., Menu says item is $20, customer orders it, it is delivered to them. The $20 price is incorporated.

IMPLIED Terms:
- Implied by statute (CRA, SGSA etc.)
- Industry custom
- Regular and consistent dealings

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25
What conditions are implied into any sale of goods by the SGA 1979?
- Seller has a right to sell the goods - Goods match any description by the seller - If sold by a business: Goods are fit for the purpose they are generally used for/ for a special purpose made known to the seller.
26
What conditions can be excluded in a contract for the sale of goods under the SGA 1979?
Only implied conditions thats are reasonable, but condition of title CANNOT be excluded (i.e., the seller MUST have the right to sell it)
27
What terms are implied into contracts under the SGSA 1982?
SGSA regulates contracts for SERVICES with GOODS incidental to that service. For SERVICE: - Innominate terms are implied that the supplier will carry out the service within a reasonable time and with reasonable care + skill. For GOODS, same as the SGA: - Seller has title - Goods match seller's description - Goods are fit for the purpose they are generally used for/ for a special purpose made known to the seller.
28
What conditions can be excluded in a contract for services under the SGSA 1982?
Any of the implied terms, so long as they are reasonable. NOTE: Assuming the seller must still have title if they are transferring goods to the other party incidental to the service.
29
What terms are implied into contracts under the CRA 2015?
This act implied terms into contracts between BUSINESSES and CONSUMERS. If a contract for GOODS, same as the SGA: - Seller has title - Goods match seller's description - Goods are fit for the purpose they are generally used for/ for a special purpose made known to the seller. If a contract for SERVICES: - Carried out with reasonable care and skill - Completed in accordance with any info the consumer relies on (e.g., price quote) - For a reasonable price, if not agreed - Within a reasonable time, if not agreed
30
What terms can be excluded in a contract governed by the CRA?
None of the terms can be limited.
31
When will a court imply a term into a contract?
If required to make the contract work the way the parties intended (i.e., to give it "business efficacy")
32
What can the court do if part of a contract is incomplete of vague, such that they cannot determine what the parties intended to be bound by?
They will either (i) not enforce K or (ii) sever the uncertainty, if possible. HOWEVER: - If the K provides a mechanism for resolving uncertainties, they will follow that - A reasonable price is always provided by statute if not in K.
33
What is an exclusion clause?
A clause attempting to limit the liability of a party under contract
34
What is the defence of "non est factum"?
It applies when a party in a contract dispute claims that: - They did not understand the contract they signed - There was a fundamental difference between what they thought they signed and what they actually signed.
35
Is it a defence for one party to say that they are not bound by an exclusion clause because they didn't read the contract?
Usually, no. Exception: An oral misrepresentation made by one party to induce the other party to enter a contract
36
How can an exclusion notice be brought to someone's attention?
- Expressly/written into agreement - By notice, before of while K is being made - Implied by custom (in industry, by course of dealing)
37
What is the "contra proferentem" rule?
If there is any ambiguity, it is interpreted against the party seeking to rely on it.
38
Under the Unfair Contract Terms Act 1977, what terms are AUTOMATICALLY void?
- Excluding liability for death caused by negligence - Excluding liability for breach of the implied condition of good title
39
Under the Unfair Contract Terms Act 1977, what terms are void UNLESS REASONABLE?
1. Excluding liability for any loss (other than death caused by negligence) 2. Any term on a party's form contract that - Excludes liability for breach of contract - Reserves the right to render a substantially different performance of the contract - Excludes liability for breaching the implied terms of description, quality, or fitness. NOTE: Excluding is different than limiting liability. The latter is more likely to be found reasonable.
40
What additional way can a consumer challenge any unfair clauses in a contract, if not already provided for in the Unfair Contract Terms Act 1977?
Consumer Rights Act 2015: a consumer can ask a court to set aside any "unfair" limitation or exclusion, so long as: - It is not about the main subject matter of the contract, - It is not about price, - It is not transparent, and - It is contrary to the requirements of good faith or causes a significant imbalance (i.e., "unfair")
41
Void vs. Voidable
Void: No legal effect from inception, cannot be enforced by either party Voidable: Valid until one party rescinds it
42
What contracts are VOID?
1. Illegality - Includes anything contrary to morality or the institution of marriage - Includes anything damaging to gov - Includes anything that interferes with justice 2. Mistake - Common: both parties made same mistake - Mutual: both parties reasonably mistaken about different things - Unilateral: One party mistaken, the other party knew - Mistaken Identity: One party induced the other to enter contract by being someone else - Non est Factum
43
What contracts are VOIDABLE?
- Misrepresentation - Minors - Duress - Undue Influence
44
What is Rectification?
When a court allows the parties to modify a written agreement because it mistakenly does not reflect their oral agreement.
45
What is the definition of a misrepresentation?
A false statement of fact or law that induces another party to enter into a contract. 1. False statement of fact or law - Cannot be a genuine opinion - Cannot be a genuine statement of intention - Must relate to present or past events 2. Induces the other party - Must be the reason they enter the contract. If they don't care about the false statement, not actionable - "Mere puff" is not actionable
46
When can silence be a misrepresentation?
- If the contract is one of good faith - If partial disclosure would be misleading - If an earlier representation has become untrue
47
What is Fraudulent Misrepresentation, and how does it affect the damages recoverable by the innocent party?
A false statement made knowingly or recklessly with regards to the truth of the statement. Damages: All losses recoverable
48
What is Negligent Misrepresentation, and how does it affect the damages recoverable by the innocent party?
A false statement made without reasonable grounds for believing it. Damages: All losses recoverable
49
What is Innocent Misrepresentation, and how does it affect the damages recoverable by the innocent party?
A false statement made without fault Damages: Not recoverable
50
What can an innocent party do if a contract is based on a misrepresentation?
- Affirm the contract - Rescind K - Seek damages
51
When is rescission not available for an innocent party to a contract based on misrepresentation?
- They affirmed the K by carrying on under it after discovering the misrepresentation (or say they will carry on under it). - They waited too long to rescind after discovering the misrepresentation such that the other party would be harmed by recision. - It is impossible to restore the parties to their pre-K positions. - A BFP has gained rights in the subject matter of the K without knowledge of the misrepresentation.
52
Can a contract exclude liability for a fraudulent misrepresentation?
Very likely no. Exclusions of liability for any type of misrepresentation is void unless reasonable, and excluding fraudulent misrepresentation is likely never reasonable.
53
What is the difference between discharging a contract and rescinding it?
Recision: Parties are returned to per-K positions Discharge: Any rights and obligations that accrued before termination remain in place.
54
What is needed to effectively discharge a contract?
Consideration. If both sides have unperformed obligations, there is consideration for them to discharge the K. If one side has completed their obligations under the K, the other side must give consideration for the discharge to be valid.
55
What is a waiver, and can the waiving party still enforce their rights?
A waiver is a promise by one party not to enforce the other party's obligations. The waiving party can still reinstate their obligations by giving reasonable notice, unless the other party has detrimentally relied on the waiver.
56
Does substantial (i.e., not full) performance discharge a contract?
Yes, but it is a breach of warranty and the other party can seek damages.
57
Are liquidated damage clauses enforeceable?
Yes, but only if it is a genuine estimate of loss that would be caused by a breach. It cannot be a penalty for breaching.
58
If there is an anticipatory breach, what can the innocent party do?
If the anticipatory breach goes to a condition, they can immediately terminate the K and sue
59
Indemnity vs. Guarantee
Indemnity: A promise to accept responsibility if someone else doesn't perform their obligations. Guarantee: A promise to perform someone else's contractual obligations.
60
What are the main contractual remedies under the Consumer Rights Act 2015?
Consumers can: - Reject defective goods within 30 days after they were supplied for a full refund - Can require the trader to repair or replace defective goods at the trader's expense - If the defective goods cannot be reasonably remedied, consumer can demand the price is lowered or ask for full refund.
61

Contract (8 decks)

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