Legal Contract

Question 1

Three Elements of a Legal Contract

Answer 1

1. Agreement
2. Intention
3. Consideration

Question 2

Three Forms of Misrepesentation

Answer 2

• Innocent
• Negligent
• Fraudulent

Question 3

Innocent Misrepresentation

Answer 3

-Occurs where the person making the statement honestly believes he or she is giving correct information, when in face, he or she has made a mistake.

Question 4

Negligent Misrepresentation

Answer 4

-Occurs when the person making the statement is considered competent to give information and is relied upon to know the correct information but give information that turns out to be incorrect

Question 5

Fraudulent Misrepresentation

Answer 5

-Occurs when the person making the statement knows that he or she is giving incorrect information

Question 6

Exclusion Clauses

Answer 6

• A clause that aims to limit or avoid liability for something that might go wrong in the course of contract

Question 7

Commonwealth legislation regulate merchantable quality and fitness of purpose

Answer 7

Sale of Goods Act 1896 (Qld)

Trade Practices Act 1974 (Cth)

Question 8

Offer

Answer 8

An offer is legally identified as an indication by words (written, spoken) or by conduct to make a promise.

Question 9

Invitation to treat

Answer 9

Invitation to treat is something said or done to provoke an offer.

Question 10

Capacity to make an agreement

Answer 10

A legal capacity is if there is to be a valid agreement between two parties, both of them must have the ‘legal ability’.

Question 11

Capacity

Answer 11

Exists if a person has certain characteristics that the law recognized would provide the person with the ability to look after his/her own interests and to understand the consequences of signing the agreement

Question 12

Legislation regulates credit transaction in Queensland

Answer 12

The Consumer Credit (Qld) Act 1994

Question 13

Cooling off periods

Answer 13

For property five days are provided for consumer to break contract

Question 14

Two Elements of Unconscionable Conduct

Answer 14

• One party takes is at a legal disadvantage eg. Elderly, physical disability.
• Other party takes advantage of this disadvantage and gains a benefit.

Question 15

Misleading or deceptive conduct

Answer 15

The term is used to prohibit businesses form engaging in misleading or deceptive conduct (Australian Consumer Law).

Question 16

Duress

Answer 16

One party forces the other party to enter the contract by actual or threatened violence to the or close relatives.

Question 17

Undue Influence

Answer 17

Parents and child
Trustee and Beneficial
Solicitor and Client

Question 18

Illegality

Answer 18

Contracts entered into to preform illegal acts that are unable to be enforced.

Question 19

Frustration

Answer 19

When circumstances beyond the control of the parties occur which prevent the contract form being able to be performed.

Question 20

Consumers do not have to accept faulty goods

Answer 20

Sale of Goods Act 1896

Question 21

Define ‘merchantable quality’

Answer 21

Merchantable quality means of reasonable quality

Question 22

Disadvantages of Sale of Goods Act 1896

Answer 22

• Only applies to QLD transactions
• Only applies to sale of goods
• Sellers can ‘contract out’ of the law by making exclusion statements on receipts etc.

Question 23

Advantages of Trade Practices Act 1974 (Cth)

Answer 23

• Covers all transaction involving sale of goods and services
• Not possible to exclude to act