The Law of Contract Flashcards Preview

2007GIR - Legal Issues for Managers > The Law of Contract > Flashcards

Flashcards in The Law of Contract Deck (31)
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1

What is the definition of contract law?

“An agreement between two or more parties under which legal rights and obligations are created which will be enforced in the courts…a promise(s) that the law will enforce.” (text)

2

What is the difference between a contract and an agreement?

A contract is an agreement but an agreement is not necessarily a contract. It may lack one of the elements (principles) that need to be present.

3

What are the essential elements of a contract?

Agreement/Acceptance
Intention
Consideration
Capacity
Purpose

4

What are formal contracts?

Contracts under seal. Require a special form or method or creation but DO NOT need consideration (contracts of record, some loan agreements, hire purchases)

5

What are simple contracts?

All contracts (other than contracts under seal) are simple contracts. They require consideration and some must be in writing to be enforceable (i.e. real estate contracts)

6

What is an express contract?

contract is where the parties have used express (specific) words - written &/or oral (e.g. lease)

7

What is an implied contract?

Implied by conduct - i.e. taxi

8

What is a Quasi-contract?

Agreement imposed by law (i.e. compulsory third party insurance)

9

What is a unilateral contract?

An act in exchange for a promise (Mobil Oil Australia x. Welcome International Pty Ltd ( 1998)

10

What is a bilateral contract?

A promise for a promise: an exchange of promises .

11

What is a valid contract?

All elements are enforceable by another party - usually a remedy for breach (damages) but equitable remedy may also be available

12

What is a voidable contract?

A valid contract that contains some defect (allows the innocent party to enforce or rescind the contract)

13

What is an uneforcable contract?

Valid (prima-face_ on its face but no legal action can be brought on the contract - often because of a technical defect. Correction will generally render a contract enforceable if done within a reasonable time

14

What is a void contract?

Lacks legal validity and is unenforceable by either party

15

What is an illegal contract?

The purpose of the contract contravenes a statute or the common law - generally treated as void ab inito (void from the beginning)

16

When does a contract come into existence?

After an offer has been made - the point at which it is ACCEPTED is when the contract begins

17

What is considered "acceptance"?

Written, oral or implied by conduct of the parties (did they show intention to create legal relations)

18

What is an invitation to treat?

An "invitation to treat" is just an indication of a willingness to deal or trade and is not an offer.

19

Is a tender an offer?

Not usually unless the tender states its exact needs as opposed from what it may require

20

Can an offer be withdrawn?

Offer can revoke the offer any time up until acceptance - even if the offeror has said the offer will remain open (unless an agreement was created with consideration or under a deed)

21

What should a party do if they would like to withdraw an offer?

Ensure that they bring the withdraw to the other parties attention before acceptance. They can learn directly or indirectly.

22

What is an example of puffery?

Leonard vs. Pepsi Co. Pepsi said one could win a harrier jet as a prize for someone who claimed enough points - not reasonable, pure puffery.

23

What are the exceptions to an acceptance requiring it to be communicated?

- Notification can be dispensed with by offeror
- Acceptance can take the form of performance of an act
-Acceptance can be implied by conduct

24

What does not constitute acceptance?

Silence.

25

Can an acceptance be made in reliance of the offer?

Yes however they must intend to accept the offer. This can be very risky.

26

In a unilateral contract, an offeror has waived its right to ____________ ___ ____________.

Communication of acceptance.

27

What is the postal acceptance rule?

The rules as to the time of acceptance are as follows:

- An offer by letter is NOT effective until received by the offeree
- Acceptance is effective as soon as it is posted
- Acceptance is not affected by delay or loss of letter (provided the parties contemplated post as means of communication).

28

When can the postal acceptance rule be excluded?

Where intention is that communication is required (which an offeror can stipulate) i.e. postal exclusion clause

29

What is intention?

Intention to create legal relations.

30

How does intention differ between social, domestic, voluntary vs. business relationships?

Courts presume there is/was no intention to create legal relations in social/domestic/voluntary agreements

Courts presume parties DO intend to create legal relations but can be rebutted if not of a commercial nature