The Law of Contract Flashcards
Definition of a contract
A legally binding document between at least two parties that defines and governs the rights and obligations of the parties to an agreement. Usually in the form of an agreement to provide a service for an agreed sum.
What is the Law of Tort and what does it cover?
A tort occurs when someone commits a wrong against another person. Tort law allows individuals who have had a wrong committed against them to claim damages against the person who has committed the wrong.
Covers: negligence, nuisance, trespass.
Explain the Unfair Contract Terms Act 1977
The act regulates contracts by limiting the extent to which one party can avoid liability through use of exclusion clauses such as disclaimers.
What does the the Unfair Contract Terms Act 1977 apply to?
It applies only to exclusion terms within contracts. The Act renders the exclusion term void, or only enforceable if “reasonable”.
Cannot exclude or restrict liability for negligence or breach of contract.
What are the key provisions of the Supply of Goods and Services Act 1982?
Goods will be of satisfactory quality.
Where the employer makes known any particular purpose for which it is acquiring the goods and relies on the contractor’s skill or judgment, the goods will be reasonably fit for that purpose.
The contractor will carry out the services with reasonable skill and care.
Services should be carried out within a reasonable time.
If no amount is agreed, a reasonable amount will be paid for the services.
What rights does the Housing Grants, Construction and Regeneration Act 1996 (Construction Act) provide?
The right to adjudication at any time; and
Certain minimum requirements on payment terms (interim/periodic payments, right to be informed of any amount withheld, right to suspend performance for non-payment, disallowing pay when paid clauses)
What is the Contracts (rights of third parties) Act 1999?
Allows third parties to have the benefit of the contract. Normally requires an express term in the contract.
What time periods are imposed The Limitation Act 1980
6 Years underhand (simple) contracts
12 years as deed/under seal contracts
Which court are construction cases brought to?
The Queens Bench, which sits within the High Court.
The Technology and Construction Court is a specialist court of the Queen Bench.
What comprises a contract?
All Contracts comprise the following:
Agreement: which consists of offer and acceptance
Consideration: something given in return for a promise (a free gift is not a contract)
Intention to create legally binding relations: the parties intend to be legally bound
Capacity: parties are legal entities recognised by law.
What is an invitation to treat?
Forms a stage immediately before the offer, not an offer which is a definite promise to be bound on specific terms, whereas an invitation to treat is only an indication that someone is willing to receive offers with a view of forming a contract.
What are the different type of contractual term?
Condition: the principal term of a contract
Warranty: an ancillary or subsidiary term
Breach of a condition is a repudiatory breach – i.e. the injured party has the right to treat the contract as discharged as well as claim damages (repudiate means to disown or reject)
Breach of warranty only gives the injured party a right to sue for damages and has no right to reject the contract.
Definition of a lease
A lease is an estate in land whose duration is either fixed at the outset or can be fixed later by a notice to quit given by either landlord or tenant.
What are heads of terms?
Heads of terms is a document that records the main terms of a lease agreement between a landlord and a tenant. The terms are usually prepared and negotiated by the landlord’s agent. Although heads of terms are not legally binding, it is important for the tenant to take time to understand the terms and the financial implications behind those terms before they start lease negotiations.
Although not legally binding, heads of terms show the intent of the parties but do not legally enforce them to go on and complete the lease.
What is an FRI Lease?
Full repairing and insuring (FRI) lease: the tenant is responsible for the cost of all repairs and insurance, either directly or through a service charge.
