LEGAL Flashcards
(37 cards)
Define: Contract
An agreement between two or more parties that creates rights and obligations which are enforceable by law.
What are the three elements of a valid contract?
Intention to create a legal relationship
Agreement (Offer + Acceptance)
Consideration
What is an invitation to treat?
Goods on display, for example in a supermarket, represent an invitation to negotiate or treat and are not an actual offer.
Define: Counter offer
A new offer made by a party which replaces the original offer.
What are the two terms required for acceptance to occur?
The offeree must conform to any conditions set by the offeror.
Acceptance must be clearly communicated to the offeror. Silence doesn’t constitute acceptance.
Define: Capacity to contract
Refers to one’s ability to fully understand the terms and obligations contained in a contract.
When are contracts involving minors legally enforceable?
When the pays for goods and services with cash
When the contract involves the purchasing of necessaries.
Define: Necessaries
Items that are needed for reasonable comfort of a minor. Eg Food, shelter, clothing, education and medicine.
Define: Beneficial contracts of service
Refer to contracts such as apprenticeships or contracts that provide education and training. These are judged to be for the minors benefit.
What contracts are void for minors:
Contracts for the repayment of money lent
Contracts for the payment of goods other than necessaries
Accounts stated necessary
What has to occur for real consent to be breached in a contract?
A mistake
Misrepresentation
Duress
Undue influence
What happens if there is not real consent given?
The contract may become void or voidable.
Define: Misrepresentation
A false statement about the facts
May be made innocently or deliberately
Define: Puffery
A term used to describe wildly exaggerated, fanciful or vague claims about a good or service that no-one could possibly treat seriously or find misleading.
Define: Duress
Refers to the use of violence or threats to make a person agree to become a party to a contract.
Contract can be avoided if consent was obtained by threats of property of personal safety.
Define: Undue Influence
May occur in circumstances where one person has the power to influence another in an unacceptable manner, in which case genuine consent is missing.
What makes a contract illegal?
If the subject matter is illegal
A contract that is designed to defraud the government
Define: Term
A term is a legally binding promise
All contracts include terms
What are Express Terms?
Refers to a term the parties have agreed to either in words, writing or both.
What are implied terms?
An implied term is one that is read into a contract by the parties or the courts
Eg. When you purchase a food product, the implied term is that the food will be fit to eat.
Distinguish between Conditions and Warranties:
Terms that are regarded as essential to the contract are referred to as conditions.
Terms of less importance are referred to as warranties
What is the result of a breach of a condition?
If there is a breach of a condition, the party affected has several choices:
To terminate the contract and claim damages
To confirm the contract and also claim damages
What is the result of a breach of warranties?
The breach of a warranty gives the innocent party the right to claim damages but the contract remains in force.
What are Standard Form Contracts?
Contracts that are pre-prepared by one party to the other party on a ‘take it or leave it basis’. There is little to no room for negotiation.
Eg Apple’s Terms and conditions when downloading an app.
