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Contract > SA Questions For Contract > Flashcards

SA Questions For Contract Flashcards

1
Q

Jan12

What does acceptance of an offer do?

A

Creates a binding agreement

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2
Q

Jan 15- chapt 1

Define a contract (3)

A

An agreement giving rise to obligations which canbe enforced/recognised by law/legally binding

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3
Q

June 16- chapt 1

Explain the doctrine of privity of contract and exceptions to it (4)

A

Only parties to a contract are bound by it and can therefore sue or be sued on it (Tweddle v Atkinson 1861) and Dunlop v Selfridge 1915

Exceptions:
- s11 Married Womens Property Act 1882. When one spouse insures their life for the benefit of spouse/children these can sue on the contract.

-Where a contract is made by one person on behalf of and for benefit of others i.e. Jackson v Horizon Holidays 1975

-Can sue on a contract under Contract (rights of 3rd parties) Act 1999 if:
- contract expressly states he/she may s1(1)(a)
(Avraamides v colwill- must be named)
- term purports to confer a benefit on him or her s1(1)(b)

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4
Q

Jan 14- chapt 1

Identify three requirements for the formation of a valid contract (3)

A

Offer

Acceptance

Consideration

Intention to create legal relationship/intention to be legally bound

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5
Q

June 14- chapt 1

Explain when a 3rd party may be able to sue on a contract(2)

A

Can sue on a contract under Contract (rights of 3rd parties) Act 1999 if:
- contract expressly states he/she may s1(1)(a)
and (b) (avraamides v colwill- must be named)
- term purports to confer a benefit on him or her s1(2)

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6
Q

Jan 16- chapt 1

Identify any 3 elements of a binding contract (3)

A

Offer
Acceptance
Consideration
Intention to create legal relationship /intention to be legally bound(use both terms!)

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7
Q

June 16- chapt 1???

An offer can be terminated by acceptance. Identify three other ways in which an offer that can be terminated
3

A

Offerees rejection

Counter offer in relation to the offer (Hyde v Wrench)- destroys original offer and creates a new one

Offeror could revoke their offer before it is accepted (Payne v Cave)

Lapse of time (motelfiore)

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8
Q

Jan 16-chapt 1

Explain when a 3rd party may be able to sue on a contract under Contract (rights of 3rd parties) act 1999 (2)

A

If-
The contract expressly states that he may s1(1)(a)OR

The term purports to confer a benefit on him s1(1)(b)

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9
Q

June 14- chapt 2

What is a bilateral contract?(1)

A

Both/all parties assume an obligation

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10
Q

June 15-chapt 2

Identify the 2 requirements for the formation of an agreement (2)

A

Offer

Acceptance

Which equals agreement

(Must be objective - Gibson v Manchester CC)

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11
Q

Jan 15-chapt 2

Identify and explain any 2 exceptions to the entire performance rule(4)

A

Entire performance (cutter v Powell 1795)

  • acceptance of partial performance (sumpter v hedges£
  • substantial performance Hoenig v Isaacs 1952/ Bolton v Mahdeva 1972
  • one party preventing performance(Planche v Colburn 1831
  • divisible or severable contracts
  • breach of terms concerning time and whether or not time is “of the essence”
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12
Q

June 14- chapt 2

Identify 2 exceptions to the rule that acceptance of an offer must be communicated to the Offeror.
Use relevant case law
(4)

A

General rule - silence not accepted (Felthouse v Bindley 1962)

  • acceptance by conduct (brogden v metropolitan railway 1877)
  • unilateral contracts where the Offeror waives the rule (Carlill v Carbolic Smoke ball co 1892)
  • where postal rule applies (Adams v Lindsell 1818)
  • acceptance by telex (Brinkibon ltd v Stahag Stahl und Stahlwarenhandgesellschaft mbh 1982) or email (Thomas v BPE solicitors)- only for businesses in business hours
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13
Q

June 15- chapt 2

Explain the differences between a unilateral and a bilateral contract (4)

A

Unilateral- completed by performance -ie “if you do something, I will pay you as a reward” (Carlil)

Bilateral-both parties have obligations
Ie: “I will do X and you pay me y”

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14
Q

Jan 14- chapt 2

Explain how a unilateral offer is accepted (2)

A

Acceptance of an offer in a unilateral contract is affected by action on the part of the offeree as in Carlill v Carbolic Smoke Ball Co 1893 where the use of the smoke ball constituted acceptance

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15
Q

Jan 15- chapt 2

Define a bilateral contract (1)

A

Where both parties have obligations

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16
Q

Jan 14- chapt 2

Identify and explain two ways in which an offer can be terminated(2)

A

Withdrawal by offeror before acceptance- revocation (Payne v Cave)

Rejection by offeree or counter offer(Hyde v Wrench) destroys original offer and creates a new one

Lapse of time(ramsgate hotel v motelfiore )

Acceptance

Failure of condition (poussard v Spires and pond)

Death of offeror

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17
Q

June 15- chapt 2

Explain the postal rule (3)

A

General rule is that silence can’t constitute acceptance (Felthouse v Bindley

The postal rule is an exception to the general rule requiring communication of acceptance.

Acceptance takes place on posting in the normal course of post, rather than when it is received.

Relevant case: Adams v Lindsell 1818

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18
Q

Jan 15- chapt 2

Explain the nature and effect of a counter offer (3)

A

When the offeree responds to an offer with new terms.
A counter offer destroys the original offer and creates a new one.

Relevant case: Hyde v Wrench 1840

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19
Q

Jan 16-chapt 2

Identify and explain 2 ways in which an offer may be terminated (4)

A
  • withdrawal or revocation by offeror (Payne v cave)
  • rejection by offeror

Counter offer (Hyde v wrench 1840)- destroys original offer and creates a new one

Failure of condition (Poussard vPond and Spires)

Lapse of time (motelfiore)

Acceptance

Death of offeror

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20
Q

Jan 16- chapt3

What is meant by executed consideration? (1)

A

When 1 party performs his part of the contract at the time the contract is made (or unilateral contract)

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21
Q

Jan 16- chapt 3

What is meant by executors consideration?(1)

A

When parties exchange promises to do something in the future

Found in bilateral contracts

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22
Q

June 14- chapt 3

Identify 3 rules for establishing valid consideration (3)

A

Def of consideration- “price paid for a promise (Dunlop v Selfridge 1919)

must move from the promisee, (tweddle v Atkinson 1861)but not necessarily to the promisor (Dunlop v Selfridge 1919)

  • must not be past(re McCardle 1951)- exception where Act done at request of promisor
  • must be sufficient Thomas v Thomas 1842
  • but need not be adequate- Chappell v nestle 1960
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23
Q

Jan 16- chapt 3

Identify 3 situations where the performance of an existing duty is not good consideration
3

A

Performance of an existing public duty - Collins v Godfroy 1831 / Glasbrook bros 1925 UNLESS promise goes beyond what they are bound to do (Harris v Sheffield united 1988)

Performance of an existing contractual duty- stylk v myrick 1809 UNLESS additional duties performed (Hartley v Posonby 1857)

Part payment of a debt where there is an existing duty to pay the debt (Pinnels case1602)

Existing contractual duty to 3P (Scotson v Pegg 1861)

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24
Q

June 14- chapt 3

Define consideration (1)

A

Either-
A benefit to one party or a detriment to the other (Currie v Misa 1875)

Or-
The price for which the other parties promise is bought (Dunlop v Selfridge 1919)

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25
Q

June 16- chapt 3

Explain the past consideration rule (3)

A

Without consideration, the contract will not be binding

Def of consideration- “price paid for a promise” - Dunlop v Selfridge 1919
Where the consideration took place before agreement was made.
Past consideration is not good consideration

Re McCardle 1951

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26
Q

Jan 16- chapt 3

Explain the effects of an ‘honour clause’ on intention to create legal relations.

Use case law to support your answer (4)

A

In business agreements there is a presumed intention to create a legal relationship which is rebuttable by evidence to the contrary (Edmunds v Lawson )

An ‘honour clause’, which states that the agreement is binding in honour only, provides such evidence and the contract would not then be enforceable.

A relevant case would be Rose and frank v Crompton Bros 1924 (honour clause)

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27
Q

June 15- chapt 3

Explain what is meant by the rule that “consideration must be sufficient” (2)

A

The rule means that what is to be given in return for a promise must be recognised by law. It must be legal.

Relevant case: Thomas v Thomas 1942

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28
Q

June 16- chapt3???

What presumption do the court courts make in commercial agreements? (2)

A

The courts presume that the parties intended to be legally bound (Edmunds v Lawson 2000)

However where there was a mere puff or honour clause (rose and frank v Crompton bros 1824), the presumption is able to be rebutted

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29
Q

Jan 14- chapt 3

Explain the presumption that exists in respect of intention to create legal relations (4)

Check these answers

A

Two rebuttable presumptions:

  • family or social agreements - presumption against (Jones v Padavatton 1969)not binding
    But merrit v merrit 1970 was (divorcing spouses)
  • commercial/business-presumption for - Edmunds v Lawson 2000)
    BUT Rose and frank v Crompton Bros 1924 not
30
Q

June 15- chapt3

What is the rule that consideration must not be past?

A

Means that a promise for something after it has been done is not valid consideration.

Relevant case: Re McArdle 1951

31
Q

June 16/ chapt 3

In addition to agreement, what further two elements are required for the formation of a binding contract?(2)

A

Consideration

Intention to be legally bound

32
Q

Jan 14- chapt 3

What is the rule in Pinnels case?

State one exception to the rule in Pinnels case 1602
(1)

A

The general rule is:
part-payment of a debt is not good consideration for a promise to forgo the balance.

Exceptions-
Part payment before the due date

Part payment by third party

Payment using something different as payment
Confirmed in Foakes and Beer

33
Q

June 15- chapt 3

Identify and explain 1 situation in which the presumption regarding legal relations in social and domestic agreements may be rebutted (2)

A

Use Jones v padavatton 1969 for general rule

  • the situation of separated/divorcing spouses (Merritt v Merritt 1970)
  • where a practical benefit has been obtained
    Or a party at a disadvantage (Simpkins v Pays 1955)
34
Q

Jan 15- chapt 3

How is consideration defined in Currie v Misa 1875?(1)

A

A benefit to one party/detriment to the other

35
Q

Jan 15- chapt 3

Identify the presumption regarding legal relations in social and domestic circs and explain 1 situation in which the presumption may be rebutted.
(3)

A

In S/D circs there is a presumption against forming a legal relationship. Use Jones and padavatton 1969

This presumption maybe rebutted where spouses are separating/divorcing as in Meritt v Meritt 1970
OR
Where a practical benefit has been obtained or a party is at a disadvantage (Simpkins v Pays 1955)

36
Q

Jan 16- chapt 4

What is an express term in a contract? (1)

A

One which is distinctly or overtly stated or agreed between the parties and stated in the contract

37
Q

June 14- chapt 3

Explain the presumptions that the courts follow regarding intention to create legal relations (5)

A

There is a presumption AGAINST an intention in social/Donestic contracts (Jones v Padavatton 1969)

In business contracts there is a presumption FOR the intention (Edmunds v Lawson 2000)

Both presumptions are rebuttable

38
Q

Jan 16- chapt 4

Explain the term implied by s13 Sale of Goods Act 1979 (2)

A

S13(1) SGA 1979

Implies a condition that where the goods are sold by the description they must Correspond with that description

39
Q

Jan 16 - chapt 4

What is an inomminate term?
1

A

One that cannot be classified as either a condition or warranty at the time the contract is made

Decided by the courts on a case by case basis

Hong Kong fir shipping 1962

40
Q

June 14- chapt 4

Define and explain two of the factors which may make a statement a term of contract rather than a mere representation. Use relevant case law
(4)

A
  • the importance attached to the statement (Bannerman v White 1861)
  • the reduction of the statement into writing
    (Birch v Paramount Estates 1956)
  • a short period of time between the statement and the contract (Routledge v McKay 1954)
  • specialist skills of statement maker (Oscar Chess v Williams 1957/ dick Bentley )
41
Q

Jan 14- chapt 4

Define an inomminate term
3

A

Neither a condition nor a warranty.
Court will adopt a wait and see approach

Decided by the courts on a case by case basis

Relevant case- Hong Kong Fir Shipping Co LTD v Kawasaki Kaisha ltd 1962

42
Q

June 16- chapt 4

What is an inomminate term? (3)

A

One whose status cannot be defined at the time the contract is made.
Its status is determined by considering the consequences of a breach.
Effect of breach determines how serious the results of breach are

Decided by courts on a cases by case basis
This is seen in the case of Hong Kong Fir Shipping Company ltd v Kawasaki kisen kisha ltd 1962

43
Q

June 16- chapt 4

Explain how written terms can be incorporated into a contract? (4)

A

By signature (L’estrange v Graucob 1974)

By notice (Olley v Malbororough Court Hotel 1949)

By a course of dealings (hollier v Rambler Motors 1972)

Common understanding between the parties (British crane hire corp v Ipswich plant hire 1975)

44
Q

Jan 14- chapt 4

Give two examples of terms implied under part 2 of the supply of goods and services act 1982 (2)

A

Part 2 deals with supply of services

S13 -implied term to use reasonable care and skill

S14- implied promise to perform services within a reasonable time

S15- implied term to pay a reasonable charge for the services

45
Q

Jan 15- chapt 4

Identify and explain 2 ways, At common law, in which the courts may imply terms into a contract (4)

A
  • terms implied by law as a matter of policy -ie: those that should always be in the type of contract in question (Liverpool CC v Irwin 1976)
  • Terms implied in accordance with the business efficacy test-ie: in order to make the contract work (The Moorcock 1889)

-Terms implied under officious bystander test
( Shirlaw v Southern Foundaries (1926) ltd 1939) “oh of course!”

46
Q

June 15- chapt 4

Describe 2 terms implied by the sale of goods Act 1979, including section numbers (4)

A

S13(1) sga 1979
When goods are sold by description there is an implied condition that the goods will correspond with the DESCRIPTION .

S14(2) sga 1979
Where the seller is selling in the course of business that is an implied condition of the goods will be of satisfactory QUALITY.

14(3) fit for purpose

47
Q

Jan 14- chapt 4

Explain what is meant by a condition and a warranty (4)

A

A condition is more important term, going to the root of the contract a breach of condition permits repudiation (Poussard v Spiers 1876)

A warranty is a less fundamental term, and despite any breach, the injured party must go on with the contract (Bettini v Gye 1876)- ancillary term

Can claim damages for both

48
Q

Jan 14- chapt 5

Identify the remedy available for innocent misrepresentation (3)

A

Misrep is an untrue statement of fact or law designed to induce the other party to contract and one that he other party did rely on to their detriment

Defintion:a representation that is made in good faith and believed to be true by the one making it but that is in fact false

The traditional remedy for innocent misrepresentation is recision.

Under s2(2) misrepresentation act 1967, damages may be awarded in lieu of rescission

49
Q

June 15- chapt 5

Identify any three bars to recision of a contract in the event of misrepresentation
3

A

Affirmation

Lapse of time (innocent/neg only)- Leaf v international galleries

Where the parties cannot be restored to their previous position

The acquisition of rights by innocent third party

50
Q

Jan 15- chapt 5

Explain the effect of a negligent misrepresentation and the remedies available (5)

A

A negligent misrepresentation under s 2 (1) Misrepresentation Act 1967 is an untrue statement of fact/ law made when he make has no reasonable belief in its truth.
It makes the contract voidable and the remedies available are:

  • rescission at discretion of court AND/OR
  • damages based on tort of deceit (Royscott v Roberson trust)

Suitable case: Howard Marine v Ogden 1978

51
Q

June 14- chapt 5

Describe any 2 requirements that establish a fraudulent misrepresentation
2

A

A statement may amount to a fraudulent mis rep if made

  • without belief in its truth
  • with reckless carelessness as to whether it is true or false
  • knowing it to be false

Derry v Peek 1889

52
Q

Jan 11

Distinguish between neg Misrep and fraudulent mis rep

(5)

A

Def of Misrep- untrue statement of fact or law designed to imduce and does induce. Victim reasonably relies on it to his detriment

Fraudulent - Knowingly making a false statement/ reckless carelessness/ without belief- e.g. Derry and Peek (1889).

Negligent – making a statement recklessly – no reasonable grounds
S2(1) Misrepresentation Act 1967. E.g. Howard marine v Ogden (1967) /royscott v rogerson trust 1989 (on a tortuous basis)

53
Q

Jan 16-chapt 5

Identify 3 types of Misrepresentation
3

A

Fraudulent (Derry v Peek 1889) knwlingly false/reckless carelessness/ without belief

Negligent (Howard marine v Ogden )
(Royscott v Rogerson trust 1989)- w/o reasonable grounds
Innocent (leaf v international galleries)-: a representation that is made in good faith and believed to be true by the one making it but that is in fact false

54
Q

June 15- chapt 6

Explain the rule that performance of a contract should be complete and exact
(2)

Plus mitigation of this rule!!!!

A

Both parties must perform the contract in its entirety in order for a contract to be discharged by performance.

Relevant case- cutter v Powell 1795

Exceptions-
i. Acceptance of partial performance;(sumpter v hedges)
ii. Substantial performance: Hoenig v Isaacs (1952)
but consider: Bolton v Mahadeva (1972);
iii. One party prevents performance: Planché v Colburn (1831);
iv. Divisible or severable contracts; and
vi. Breach of terms concerning time and whether or not time is ‘of the essence’.

55
Q

June 14- chapt 6

Identify 2 events which may discharge a contract by frustration
2

A

Krell v Henry- an event (the sole reason for the contract), not taking place events, including:

i. Destruction of subject-matter: Taylor v Caldwell(1863);
ii. Illness/death of a party: Condor v Barron Knights (1966);
iii. Supervening illegality: Fibrosa Spolka(1943):
iv. Event, the sole reason for the contract, does not take place: Krell v Henry (1903);

56
Q

Jan 16- chapt 6

Identify any 3 ways in which a contract can be discharged (3)

A

Complete performance of the contract terms

Agreement of all/both parties not to enforce their rights under the contract- accord and satisfaction

Frustration (krell v Henry 1903)( fibrosa spolka)

Breach of a condition (poussard v Spires)

57
Q

Jan14- chapt 6

Explain two ways in which a contract may be discharged (4)

A

Complete Performance

Breach of a condition (poussard v Spires)

Frustration (krell v Henry) (fibrosa spolka)(Taylor v Caldwell)

Agreement of parties not to enforce their rights under the contract

58
Q

Jan 16- chapt 6

What is the remedy of specific performance? (2)

A

Jan 16

an equitable remedy (this is discretionary)- at courts discretion

  • considered when damages are an inadequate remedy (used for unique items that can’t be replaced with money)
  • an order compelling 1 party to perform his obligations under the contract
59
Q

June 16- chapt 7

Explain how damages are measured for negligent misrepresentation under s2(1) misrepresentation act 1967
2

A

Damages are measured on the tortuous basis

Royscott Trust LTd v Rogerson 1991

60
Q

June 16- chapt 7

Explain the rule in Hadley v Baxendale 1854
3

A

Only liable for losses that are…

  • in the natural course of things OR
  • in the minds of the parties at the time of the contract; of which
  • A reasonable person would have anticipated as being a likely or reasonably foreseeable result of the breach OR WHICH
  • The D had been specifically warned about by the claimant

All other losses will be considered to remote from the breach to be recoverable

61
Q

Jan 15- chapt 7

Explain the remedy of an injunction (2)

A

A court order usually instructing someone to refrain from an action.

It is an equitable remedy and is granted where damages are inadequate

62
Q

June 16- chapt 6

Identify and explain two exceptions to the entire performance rule
4

A
  • acceptance of partial performance (sumpter and hedges 1898)
  • Substantial performance (Hoenig v Isaacs 1952) versus Bolton v Mahadeva 1972
  • One party preventing performance (Planche v Colburn 1831)
  • Divisible or severable contracts
  • tendered performance that is rejected (startup v McDonald 1843)
63
Q

Jan 15- chapt 4 and 6?

Define a warranty in a contract and explain the effect of a breach of warranty
4

A

A term of the contract which is less important than a condition.

The effect of a breach is that the contract continues and the innocent party can claim damages only. Case: Bettini v Gye 1876

64
Q

June 15- chapt 7

Explain effect of a breach of a condition in a contract (2)

A

The innocent party may:

Repudiate the contract and/or

Claim damages

Relevant case: Poussard v Spires and Pond 1876

65
Q

June15- chapt 7

What must a claimant establish to be awarded damages for breach of contract
3

A

Claimant must show -Breach of contract

  1. Breach caused the loss(factual/but for)Smith Hogg and Co v Black Sea - need not be the only cause but must be substantial cause
  2. Loss was not too remote to be foreseeable(legal) Case law Hadley v Baxendale 1854- 2 limb test

Only liable for losses that are…

  • in the natural course of things OR
  • in the minds of the parties at the time of the contract; of which
  • A reasonable person would have anticipated as being a likely or reasonably foreseeable result of the breach OR WHICH
  • The D had been specifically warned about by the claimant

All other losses will be considered to remote from the breach to be recoverable
Note that-D may seek to show that the innocent party has not attempted to mitigate the loss

66
Q

June 14- chapt 7

Identify 2 of the requirements for claiming damages (2)

A

-There was a breach (factual- but for) Smith Hogg and Co v Black Sea - need not be the only cause but must be substantial cause

AND
- the loss was not too remote (Hadley v Baxendale 1854)
Only liable for losses that are…
- in the natural course of things OR
-in the minds of the parties at the time of the contract; of which

  • A reasonable person would have anticipated as being a likely or reasonably foreseeable result of the breach OR WHICH
  • The D had been specifically warned about by the claimant

All other losses will be considered to remote from the breach to be recoverable

Note that the D may seek to show that the claimant has not attempted to mitigate the loss

67
Q

What is the purpose and meaning of damages in contract?

Which case?

A

Monetary compensation aimed at putting the innocent party in position he would have been had the contract been properly performed:

Robinson v Harman (1848).

68
Q

Jan 11

Explain the remedies avail to the innocent party where a condition of the contract has been breached

(3)

A

they can be repudiated (refuse to continue) AND claim damages to compensate for any losses, with case example such as Poussard v Spiers & Pond 1876.

69
Q

Jan12

Identify the 2 equitable remedies available for a breach of contract
2

A

Specific performance (only for unique items)

Injunction

Discretionary- only given if damages inadequate

70
Q

Remedy for breach of a condition is repudiation

A

Rescission is for Misrep !!!

Contract (13 decks)

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