Contract Law (PGDL) Questions & Answers 2024/2025

Contract Law (PGDL) Questions & Answers 2024/2025 What are the two main types of contracts? - ANSWER-Bilateral - A promise for a promise Unilateral - A promise in return for an act What is the main invitation to treat situations? - ANSWER-- Advertisement - Self-service and shop windows - Auctions (with reserve) - Invitations to tender - Mere statements of price What is the postal rule? - ANSWER-- Acceptance occurs when the letter is posted not when it is received - Also applies if the letter is never received (proof of postage) - Postal rule can be ousted in the offer - Only applies to acceptance not revocation Can the offeror stipulate the method of acceptance? - ANSWER-- Yes, but they must CLEARLY STATE that only the stipulated method will be accepted. - Remember an equally expeditious method to that stipulated should be sufficient (Timm v Hoffman) The general rule is that acceptance has no effect until communicated. However, what are the other considerations? - ANSWER-- Silence cannot amount to acceptance - Acceptance in unilateral contracts (no need to communicate. Performance) - Acceptance by conduct (may be inferred by conduct without being expressly communicated) Counter offer v Request for information - ANSWER-Counter offer (Hyde v Wrench) - Destroys previous offer, rendering it incapable of acceptance - role of offeror and offeree swaps Request for information (Stevenson, Jacques and Co v McLean) - Does not attempt to vary the terms of offer - The previous offer remains open for acceptance Types of Termination - ANSWER-- Rejection - Revocation (think about communication in bilateral and unilateral) - Lapse in time - Failure to comply with condition - Death of one of the parties (think about offeror v offeree) Acceptance must be... - ANSWER-- In response to the offer - Unqualified - Communicated (think about third party communication) When is intention to create legal relations presumed? - ANSWER-- In commercial agreement it is presumed that there is an intention - In a social/domestic agreement it is not presumed that there is an intention How can the presumption that the parties have an ICLR be rebutted? - ANSWER-Wording that the parties do not intend to create legal relations that is clear and unambiguous What is consideration? - ANSWER-The value given in return for a promise. Look out for the exchange. Issues with consideration when varying existing contract - ANSWER-- Variation to pay more for an obligation in an existing contract between the parties (Promise to pay more). Standard rule is no consideration. - Variation to accept part payment of a debt under an existing contract (Promise to accept less). Standard rule is no consideration. Exceptions to the rule (promise to pay more) - ANSWER-Hartley v Ponsonby - Is there extra? Is there something of value to enforce the extra payment? Then... Williams v Roffey - Must first identify no fresh consideration. - Is there a practical benefit? Exceptions to the rule (promise to accept less) - ANSWER-Promissory estoppel - Equitable remedy (discretionary) - Can make a promise binding even without consideration Rules governing consideration - ANSWER-- Must not be past - Must move from the promisee - Need not be adequate - Must be sufficient (real, tangible, valuable) Types of Consideration - ANSWER-- Executed (promise to perform act in future) - Executory (usually a reward - performs an act to fulfil a promise) - Past (not enforceable Y) Those who do not have capacity to enter a contract? - ANSWER-- Minors (remember there are 2 exceptions) - Due to lack of mental capacity - Due to intoxication *The latter two are still binding unless they can prove they didn't know what they were doing and the other party knew that was the case The standard rule is that minors do not have capacity to enter a contract. What are the exceptions to this rule? - ANSWER-- Contracts of employment, apprenticeship or education - Contract to supply necessaries (if the contract is of benefit to them) *Under SGA necessaries are defined as "goods suitable to a person’s condition of life and to his actual requirements) Types of duress (a defence) - ANSWER-- Duress to the person - Duress to property - Economic Duress *Contract is voidable and the remedy is recission* Duress to the person - ANSWER-- Violence or threat of violence - Need only one of the factors influencing the wronged party. Duress to property - ANSWER-- Destruction of property or threat to do the same. - Must be the decisive factor influencing the wronged party. Economic Duress - ANSWER-- Pressure that will have economic consequence - Must be shown that the contract would not have been entered into but for the duress. Undue Influence - ANSWER-Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party. (Equitable Remedy) - If successfully pleaded the contract will voidable Classes of undue influence - ANSWER-1) Actual undue influence 2) Presumed undue influence 2a) Presumed arising from special relationship 2b) no special relationship, but a relationship of trust and confidence Actual undue influence - ANSWER-Can't be presumed so the party alleging undue influence must prove it Presumed undue influence - Special relationship - ANSWER-Presumption of undue influence due to a special relationship. Some examples are: - Parent and child - Doctor and patient - Solicitor and client Presumed undue influence - No special relationship - ANSWER-- Relationship of trust and confidence - Most commonly covers relationship between husband and wife (family home for security on a loan) What is the difference between Ratio Decidendi and Orbiter Dictum? - ANSWER-Ratio - Reason for the decision - Binding CONTINUES...