SQE ATTEMPT 2 > CONTRACT > Flashcards

CONTRACT Flashcards

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1
Q

WHAT ELEMENTS DO YOU NEED FOR A CONTRACT

A
  • OFFER
  • ACCEPTANCE
  • CONSIDERATION
  • I2CLR
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2
Q

WHAT IS A BILATERAL CONTRACT

A
  • PROMISE FOR A PROMISE
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3
Q

WHAT IS A UNILATERAL CONTRACT

A
  • PROMISE IN RETURN FOR AN ACT
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4
Q

CAN AN OFFER BE ACCEPTED ONCE TERMINATED AND HOW CAN YOU TERMINATE AN OFFER

A

NO
- REJECTION
- REVOCATION
- LAPSE OF TIME

  • REVOCATION MUST BE COMMUNICATED
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5
Q

HOW CAN YOU ACCEPT AN OFFER

A
  • BY WORDS OR CONDUCT
  • OR POSTAL RULE
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6
Q

POSTAL RULE- WHEN DOES IT APPLY

A

IT HAS TO BE REASONABLE TO ACCEPT THE OFFER BY POST- EITHER IT HAS TO HAVE BEEN LAID OUT AS A CHOICE OR THERE WOULD HAVE TO BE A LONG PERIOD OF TIME BEFORE ACCEPTANCE WAS NECESSARY

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7
Q

I2CLR
- COMMERCIAL CONTEXT
VS
- DOMESTIC CONTEXT

A
  • COMMERCIAL- VERY STRONG PRESUMPTION THAT THE PARTIES INTENDED TO CLR- CLEAR WORDS ARE NEEDED TO REBUT THIS
  • DOMESTIC- REBUTTABLE PRESUMPTION THAT THEY DO NOT INTEND THEIR AGREEMENT TO HAVE LEGAL CONSEQUENCES
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8
Q

WHEN CAN A PAST ACT BE VALID CONSIDERATION

A
  • THE PAST ACT/PROMISE WAS DONE AT PROMISOR’S REQUEST
  • THERE WAS A MUTUAL UNDERSTANDING THAT THE PAST ACT WOULD BE COMPENSATED FOR IN SOME WAY
  • HAD THE PROMISE BEEN MADE IN ADVANCE IT WOULD BE LEGALLY ENFORCEABLE
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9
Q

IN A CASE OF AN UNDISPUTED DEBT- IS A PROMISE TO ACCEPT PART PAYMENT IN FULL AND FINAL SETTLEMENT BINDING?

A
  • NO
  • AS LONG AS THERE WAS NO CONSIDERATION FOR THIS
  • IF YOU GIVE SOMETHING EXTRA SUCH AS PAYING EARLY THEN IT CAN BE
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10
Q

IS PERFORMANCE OF AN EXISTING PUBLIC DUTY CONSIDERATION?

A

NO- BUT EXCEEDING THIS PUBLIC DUTY IS

EG IF YOU WERE OFFERED MONEY FOR TURNING UP FOR JURY DUTY THAT WOULDNT BE ENFORCEABLE

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11
Q

IS PERFORMANCE OF AN EXISTING DUTY CONSIDERATION?

A

NO UNLESS A PRACTICAL BENEFIT IS CONFERRED- IT WILL THEN BE BINDING UNLESS BY DURESS

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12
Q

CONDITIONS FOR PROMISSORY ESTOPPEL (5 CONDITIONS)

A
  • ONLY USED AS DEFENCE
  • MUST HAVE BEEN A PROMISE TO WAIVE STRICT LEGAL RIGHTS
  • PROMISEE MUST HAVE ACTED ON THE PROMISE BUT NOT NECESSARILY TO DETRIMENT
  • MUST HAVE CLEAN HANDS
  • WITH RENT ETC- CREDITOR CAN RESUME NORMAL RENT ONCE NOTICE GIVEN
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13
Q

WHAT IS THE RULE OF PRIVITY OF CONTRACT

A

ONLY THE PARTIES TO THE CONTRACT HAVE RIGHTS AND LIABILITIES UNDER IT

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14
Q

WHEN DOES A THIRD PARTY ACQUIRE RIGHTS UNDER A CONTRACT

A
  • IF IT WAS CLEARLY INTENDED THAT THEY SHOULD BE ABLE TO ENFORCE IT
    AND
  • WAS IDENTIFIED BY NAME OR AS A MEMBER OF A PARTICULAR CLASS
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15
Q

ARE MINORS BOUND BY CONTRACTS

A
  • NO UNLESS IT IS A CONTRACT FOR ‘NECESSARIES’ (FOOD,ACCOM ETC) - IF IT IS FOR THEIR BENEFIT IT PROBS COUNTS
  • EVEN IF THEY AREN’T BOUND BY IT, THE OTHER PARTY IS
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16
Q

ARE DRUNK PEOPLE/MENTALLY ILL PEOPLE BOUND BY CONTRACTS?

A

NO IF
- THEY DIDNT COMPREHEND THE NATURE OF THE CONTRACT
AND
- THE OTHER PARTY WAS AWARE OF THAT

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17
Q

WHAT IS AN EXPRESS TERM AND WHAT IS AN IMPLIED TERM

A

EXPRESS- WRITTEN INTO THE CONTRACT
IMPLIED- NOT WRITTEN IN BUT ASSUMED

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18
Q

HOW CAN AN EXPRESS TERM BE INC INTO A CONTRACT

A
  • SIGNATURE
  • REASONABLE NOTICE BEFORE OR AT THE TIME OF THE CONTRACT
  • PREVIOUS CONSISTENT COURSE OF DEALING
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19
Q

WHAT IS A CONDITION AND WHAT HAPPENS IF IT IS BROKEN

A

VITAL TERM GOING TO ROOT OF CONTRACT
- INNOCENT PARTY CAN TERMINATE FUTURE PERFORMANCE OF CONTRACT AND CLAIM DAMAGES

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20
Q

WHAT IS A WARRANTY AND WHAT HAPPENS IF IT IS BROKEN

A

MINOR TERM OF CONTRACT
- JUST DAMAGES

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21
Q

WHAT IS AN INNOMINATE TERM AND WHAT HAPPENS IF IT IS BROKEN

A

INTERMEDIATE TERM THAT IS NEITHER CONDITION NOR WARRANTY
- DEPENDS HOW BAD THE BREACH IS- CAN TERMINATE ONLY IF THE BREACH EFFECTIVELY DEPRIVES THEM OF SUBSTANTIALLY THE WHOLE BENEFIT

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22
Q

HOW CAN TERMS BE IMPLIED

A
  • BY CUSTOM
  • BASED OFF INTENTION OF BOTH PARTIES
  • IN LAW- LEGAL TERMS IMPLIED INTO THOSE TYPES OF CONTRACT
  • BY STATUTE- SUCH AS SALE OF GOODS CONTRACTS
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23
Q

what are the 3 things that exemption clauses have to do to be valid

A
  • must be incorporated as a term in the contract
  • must purport to exclude liability for the particular breach and loss
  • must also work with the relevant stat control (UCTA or CRA)
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24
Q

in business to consumer contracts can a supplier exclude liability for breach of key terms implied into contracts for sale and supply of goods and services

A
  • no
  • consumer rights are implied into the contract
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25
when may third parties rely on an exemption clause
- if named or otherwise identified as a member of a class intended to benefit from it
26
what is the aim of damages
- to put someone back in the position they would have been in was the contract properly performed
27
when are you likely to get damages for distress/disappointment
- if the main purpose of the contract was to provide pleasure or peace of mind
28
rule for when you get damages for a loss
cant be too remote- must be a natural consequence of the breach or D must have known the special circs at the time of the contract
29
what are the usual measures of damages
- cost of cure - diff in value - can also be loss of amenity if those two don't fit
30
claimants must take reasonable steps to mitigate loss
just a fact
31
what is a liquidated damages clause and are they enforceable
- yes enforceable - clause in a commercial contract where the amount of damages payable on breach is laid out
32
is a penalty clause enforceable?
no
33
main remedies that make a defendant perform a contract
- action for agreed sum (debt action) - specific performance - injunction ^ sp and I are equitable so given at discretion of court
34
what is a guarantee
- secondary obligation to pay if debtor defaults - must be in writing
35
what is an indemnity
- primary obligation to pay for a known loss/liability - doesn't have to be in writing
36
if you pay £20k deposit on a £60k order, and then have to pay £70k for new boxes due to a breach of contract- how much can you get back
£30k- deposit + the difference in what you'd have to have paid
37
when might you be awarded negotiating damages
- may only be awarded them where the only loss is the opportunity to negotiate a release fee- no other financial loss
38
3 ways contracts can be terminated
- discharge following breach - frustration - by performance
39
what happens following a breach of contract
the innocent party can choose whether to affirm or discharge the contract
40
3 criteria for frustration of a contract an event must....
an event must... - render performance impossible or radically different - be unexpected - occur without fault
41
what does frustration do
terminates a contract both parties are relieved from future obligations
42
what is a force majeure clause and what effect does it have on a contract
- a clause that provides for what should happen in exceptional circs - has to satisfy the reasonableness test - means that the contract won't be frustrated
43
what is the doctrine of complete performance
that until performance of the contract has been completed, the supplier is not entitled to payment
44
exceptions for doctrine of complete performance
- divisible obligations - substantial performance - wrongful prevention - voluntary acceptance of part performance
45
how do you determine whether something is a term or representation- 5 areas
- relative skill and knowledge of party - whether the maker of the statement suggested the other party check the accuracy - timing of the statement - if a written contract was any earlier statement included in it - did the innocent party express the importance of the statement
46
what is the effect of misrep
- makes the contract voidable
47
what is the effect of duress and undue influence
- makes the contract voidablewh
48
what is the effect of mistake
- void
49
when does economic duress arise
- where there is an illegitimate threat that leaves the other party with no practical choice - and that was a factor inducing them to enter into the contract or variation
50
when does undue influence arise
where a person in a position of trust abuses that position and takes unfair advantage of the other party
51
actual vs presumed undue influence
actual- it is obvious on the facts presumed- where there is a position of trust and confidence and the transaction calls for an explanation
52
when will a creditor be tainted with undue influence
if they had actual or constructive notice of undue influence
53
when will a creditor be on inquiry of undue influence
where the relationship between the debtor and surety is non-commercial and the loan is not for their joint benefit
54
3 types of mistake
- common - cross-purpose - unilateral
55
what is a common mistake and 3 limitations of this
both parties make the same mistake - it will not operate if one party is at fault - contract must not make express provision on the matter - mistake must be fundamental- ie must render the performance of the contract impossible or radically different from what was anticipated
56
cross-purpose mistake- what is it
when the 2 parties both think 2 different things eg 2 different ships named the same thing
57
unilateral mistake
one party is mistaken often used if mistake as to identity of the other party but has to be actual identity not an attribute of that person
58
when can a contract be illegal and what effect does this have on it
- either at the time of formation (it is to do something illegal) or - because of the way they have been performed - makes it void
59
types of contracts that are illegal at common law
- ones that challenge the sanctity of marriage - ones that are sexually immoral - ones that try and challenge the jurisdiction of the court
60
when are restraint of trade clauses enforceable
if - there is a legitimate business interest to protect (eg customers, employees, trade secrets) - the restraint is reasonable in terms of geographical area, duration, and scope of prohibited activities
61
which prevails over a standard form contract or an email with specific terms (eg amount to be supplied etc)
where specific terms have been agreed and negotiated, they will usually prevail over standard form contracts. so the email would prevail if there is any inconsistency
62
SQE ATTEMPT 2
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