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1、IExplain the following terms. 1. contractA valid contract is an agreement, formed by the mutual consent of the two parties.A contract may be definfed as an agreement, which legally binds the parties. The underline theory is that a contract is the outcome of consenting minds. However,parties are judg
2、ed by what they have said, written or done, rather than by what they are actually think.An agreement which the law will recognize and enforce which , apart from other important applications, forms the basis of most business relationships and transactions.2. condition termA condition is a core elemen
3、t of a contract. It is fundamental to the existence of the contract. Breach of a condition entitles the injured party to:(i)repudiate the contract (ie. treat contract as discharged); and (ii)claim rescission which would enable him to receive property transferred; and(iii)claim damages: Poussard v. S
4、piers. 3Exclusion clauseExclusion clause are clauses which purport to exclude liability altogether, or to restrict it by limiting damages or by imposing other onerous conditions.4Consideration(a)It is the element of value in the agreement. (b)Both parties must bring something of value to the agreeme
5、nt.(c)E.g. A sells B a car for 1. A and B are both providing value. (d) An act or forbearance of one party or the promise thereof is the price for which the promise of the other is bought and the promise thus given for value is enforceable: Dunlop v Selfridge.5.Promissory estoppelIf the doctrine of
6、promissory estoppel applies then the creditor may be estopped from suing for the balance of the original debt.The doctrine may apply if:(a)the creditor agrees to accept part payment in full and final settlement of a debt; and(b)the creditor intends that the debtor will rely on the agreement; and(c)t
7、he debtor does act in reliance on the agreement (it is not sufficient merely to pay the lower amount).6.Warranty termA warranty is collateral to the main purpose of the contract. It is not essential. Breach of a warranty entitles the injured party to claim damages only: Bettini v. Gye. 7. The standa
8、rd form contractMass production and nationalization have led to the standard form contract.The standard form contract is a document prepared by many large organizations setting out the terms which they contract with their customers. The individual must usually take it or leave it. For example, a cus
9、tomer has to accept his supply of electricity on the electricity boards terms - he is not likely to succeed in negotiating special terms, unless he represents a large consumer such as a factory.8. offerAn offer is a definite promise to be bound on specific terms. An offer may be defined as follows:A
10、n express or implied statement of the terms on which the maker is prepared to be contractually bound if it is accepted unconditionally. The offer may be made to one person, to a class of persons or to the world at large, and only the person or one of the persons to whom it is made may accept it.A de
11、finite offer does not have to be made to a particular person. It may be made to a class of persons or to the world at large.9.Past considerationPast consideration does not actually count as valid consideration, therefore no agreement resting on past consideration is legally enforceable. Normally con
12、sideration is provided either at the time of the creation of a contract or at a later date.10.express termAn express term is one which has been clearly stated orally or in writing, or may be by reference at the time of contract.11.executory considerationExecutory consideration is the promise to perf
13、orm an action at some future time. One party to a contractual agreement may pay money to another on the understanding that the latter will perform some act for them in the future. Or alternatively they might provide an immediate benefit for the other party on the understanding that the latter will p
14、rovide a reciprocal benefit in the future. Contracts may also be made solely on the basis of an exchange of promises as to future action, without the need for any present action. In such circumstances the mere promises provide mutual/reciprocal consideration and any such agreement entered into is le
15、gally binding and enforceable in a court of law. Such a contract is known as an executory contract.12.Liquidated damagesLiquidated damages are such a fixed or ascertainable sum agreed by the parties at the time of contracting, payable in the event of a breach. They must be a genuine pre-estimate of
16、loss. Any such sum which is not a genuine pre-estimate, but is intended to be an onerous punishment, is termed a penalty clause.13. Acceptance(a)An unconditional assent to all the terms of the offer: Neale v Merrett(b)It is important to identify a clear offer, and unconditional acceptance.Negotiatio
17、ns may constitute a series of counter offers, each party trying to impose their standard terms on the contract: the battle of the forms. Hence if faced with this type of question ensure that you identify what is happening at each stage of the negotiations until you have a clear offer and acceptance.
18、(c)Acceptance may only be made by authorised person: (compare revocation).(d)Must be made whilst the offer is still open ie:(i)before revocation(ii)before any time limit specified has expired(iii)before the offerees death 14.Innominate termInnominate term is a term which cannot be categorised at the
19、 start of the contract. The court will look at the effect of the breach: Hong Kong Fir Shipping Company v Kawasaki Kisen Kaisha.15.offerAn offer is a definite promise to be bound on specific terms. An offer may be defined as follows:An express or implied statement of the terms on which the maker is
20、prepared to be contractually bound if it is accepted unconditionally. The offer may be made to one person, to a class of persons or to the world at large, and only the person or one of the persons to whom it is made may accept it.A definite offer does not have to be made to a particular person. It m
21、ay be made to a class of persons or to the world at large.II Give decisions to the facts. 1. Partridge v Crittenden 1968The facts: Mr Partridge placed an advertisement for Bramblefinch cocks, bramblefinch hens each. The RSPCA brought a prosecution against him for offering for sale a brambling in con
22、travention of the Protection of Birds Act 1954. The justices convicted Partridge and he appealed.Decision: The conviction was quashed. Although there had been a sale in contravention of the Act,the prosecution could not rely on the offence of offering for sale, as the advertisement only constituted
23、an invitation to treat.2. Williams v Roffey (1990)Fact: The D had a contract to refurbish a block of flats and had sub-contracted the carpentry work to the C. After the work had begun, it became apparent that the C had underestimated the cost of the work and was in financial difficulties. The D, con
24、cerned that the work would not be completed on time and that as a result they would fall foul of a penalty clause in their main contract with the owner, agreed to pay the C an extra payment per flat. The C completed the work on more flats but did not receive full payment. He stopped work and brought
25、 an action for damages.Was the C only doing what he was contractually bound to do and so had not provided consideration? Held: there were benefits to the D derived a practical benefit from the promise (a) making sure the C continued his work, (b) avoiding payment under a damages clause of the main c
26、ontract if the C was late, and (c) avoiding the expense and trouble of getting someone else. Therefore, the C was entitled to payment.3. Merritt v Merritt 1970 Merritt v Merritt Facts: The husband left his wife. They met to make arrangements for the future. The husband agreed to pay 40 per month mai
27、ntenance, out of which the wife would pay the mortgage. When the mortgage was paid off he would transfer the house from joint names to the wifes name. He wrote this down and signed the paper, but later refused to transfer the house.Held: When the agreement was made, the husband and wife were no long
28、er living together, therefore they must have intended the agreement to be binding, as they would base their future actions on it. This intention was evidenced by the writing. The husband had to transfer the house to the wife.4. Bettini v. Gye (1876) Fact: The C , an opera singer, was engaged by D to
29、 appear in a season of concerts. He undertook to be in London at least six days before the first concert for the purpose of rehearsals. He arrived three days late because of a temporary illness. He gave no advance notice and D refused to accept his services.Held: the C had been engaged to perform fo
30、r a 15-week season and the failure to attend rehearsals could only affect a small part of this period. The promise to appear for rehearsals was a less important term of the contract. The D could claim compensation for a breach of warranty but he could not repudiate Cs contract.5. Curtis v Chemical C
31、leaning Co 1951 Facts: The P took a wedding dress to be cleaned by the Ds. She signed a piece of paper headed Receipt after being told by the assistant that it exempted the cleaners from liability for damage to beads and sequins. The receipt in fact contained a clause excluding liability for any dam
32、age howsoever arising. When the dress was returned it was badly stained.Held: the D could not escape liability for damage to the material of the dress by relying on the exemption clause because its scope had been misrepresented by the Ds assistant.6.Carlill v Carbolic Smoke Ball Co 1893The facts: Th
33、e manufacturers of a patent medicine published an advertisement by which they undertook to pay100 reward to any person who contracts influenza . after having used the smoke ball three times daily for two weeks. The advertisement added that had been deposited at a bank showing our sincerity in this m
34、atter. The claimant read the advertisement, purchased the smoke ball and used it as directed. She contracted influenza and claimed her100 reward. In their defense the manufacturers argued against this.(a)The offer was so vague that it could not form the basis of a contract, as no time limit was spec
35、ified.(b)It was not an offer which could be accepted since it was offered to the whole world.Decision: The court disagreed(a)The smoke ball must protect the user during the period of use - -the offer was not vague(b)Such an offer was possible, as it could be compared to reward cases.7. Pharmaceutica
36、l Society of Great Britain v Boots Cash Chemists (Southern) 1952The facts: Certain drugs could only be sold under the supervision of a registered pharmacist. The claimant claimed this rule had been broken by Boots who displayed these drugs in a self-service shop. Boots contended that there was no sa
37、le until a customer brought the goods to the cash deskand offered to buy them. A registered pharmacist was stationed at this point.Decision: The court found for Boots and commented that if it were true that a customer accepted an offer to sell by removing goods from the shelf, he could not then chan
38、ge his mind and put them back as this would constitute breach of contract.8. Central London Property Trust Ltd v. High Trees House Ltd The facts:the P leased a block of flats to the D at an annual rent of 2500 - but, because the D were unable to find enough tenants while London was being bombed duri
39、ng WWII, they agreed to accept a reduction in rent to 1250. There was no consideration for this promise to accept a lower rent. At the end of the war the flats were again fully let, and the P claimed the full rent of 2500 pa, both retrospectively and for the future.Held: in good conscience, they wer
40、e entitled to the full rent from the end of the war, but noted that they were estopped from going back on their promise had they claimed rents from the wartime period as well.9. The Moorcock 1889The facts: The owner of a wharf agreed to provide mooring facilities for The Moorcock. The ship was damag
41、ed when it hit a ridge of rock at low tide. Although the defendants had no legal control over the river-bed, they could ascertain its state but they had not done so. Held: honesty of business required an implied undertaking on the part of the wharf owner that it was a reasonably safe place to moor a
42、 ship. The wharf owner had broken his implied undertaking and was, therefore, liable in damages to the ship owner.10. Hollier v Rambler Motors 1972The facts:The P had used the D garage three or four times over five years and on some occasions had signed a contract, which excluded the Ds from liabili
43、ty for damage by fire. On this occasion nothing was signed and the Ps car was badly damaged in a fire.Held: there was no evidence to show that the C knew of and agreed to the condition and there was not a regular course of dealing, therefore the Ds were liable.11. Hartley v Ponsonby (1857)Facts:When
44、 19 out of 36 crew of a ship deserted, the captain promised to pay the remaining crew extra money to sail back, but later refused to pay saying that they were only doing their normal jobs. In this case, however, the ship was so seriously undermanned that the rest of the journey had become extremely
45、hazardous.Held: sailing the ship back in such dangerous conditions was over and above their normal duties. It discharged the sailors from their existing contract and left them free to enter into a new contract for the rest of the voyage. They were therefore entitled to the money.12.Balfour v Balfour
46、 1919Facts: The D who worked in Ceylon, came to England with his wife on holiday. He later returned to Ceylon alone, the wife remaining in England for health reasons. The D promised to pay the P 30 per month as maintenance, but failed to keep up the payments when the marriage broke up. The wife sued
47、. Held: An informal agreement of indefinite duration made between husband and wife whose marriage had not at the time broken up was not intended to be legally binding.13. Poussard v Spiers (1876) 1 QBD 410Facts: Poussard was engaged to appear in an operetta from the start of its London run for three
48、 months. The plaintiff fell ill and the producers were forced to engage a substitute. A week later Poussard recovered and offered to take her place, but the defendants refused to take her back.The court held that the defendants refusal was justified and that they were not liable in damages. What chi
49、efly influenced the court was that Poussards illness was a serious one of uncertain duration and the defendants could not put off the opening night until she recovered. The obligation to perform from the first night was a condition of the contract. Failure to carry out this term entitled the produce
50、rs to repudiate Poussards contract.14. Chappleton v Barry UDC Facts: Deck chairs were stacked by a notice asking the public who wished to use the deck chairs to get tickets and retain them for inspection. The P paid for two tickets for chairs, but did not read them. On the back of the ticket were pr
51、inted words purporting to exempt the council from liability. The P was injured when a deck chair collapsed. The clause was held to be ineffective. The ticket was a mere receipt; its object was that the hirer might produce it to prove that he had paid and to show him how long he might use the chair.1
52、5. Payzu v Saunders (1919) Facts: The P agreed to buy certain goods from the D over a period of nine months with payment within one month of delivery, and deliveries monthly. The P failed to make prompt payment for the first installment, and the D, in breach of contract, refused to deliver any more
53、installments under the contract, but offered to deliver the goods at the contract price if the P paid cash on delivery of the order. The P refused this and claimed damages, these being the difference between the contract price and the market price.Held: The P had no right to repudiate the original c
54、ontract. But the C should have mitigated their loss by accepting the Ds offer of delivery against cash payment. He had the cash available to meet the Ds demands and could have mitigated by purchasing off the D at the contract price as the D offered, instead of going into the market to purchase at a
55、higher price. He was, therefore, not entitled to damages.III. Answer the following questions. 1.State and explain the ways to terminate an Offer.(a)Rejection: of an offer or refusal to accept.(b)Counter offer: Hyde v Wrench.A counter offer is simply a new offer. (3 marks)(c)Conditional acceptance: N
56、eale v Merrett. Contrast requests for information : Stevenson v McLean.A conditional acceptance is an attempt to introduce new terms into the offer and as such cannot be an acceptance.(d)Lapse of time: (an express or implied period) will terminate an offer: Ramsgate Hotel v Montefiore. (3 marks)(e)R
57、evocation of an offer:(i)is effective any time before acceptance occurs Routledge v Grant;(ii)as long as it is actually communicated: Byrne v Van Tienhoven;(iii)can be communicated via a reliable third party: Dickinson v Dodds; (f)Death. (4 marks)2.Explain the implied term.An implied term is one whi
58、ch the court will allow because:(a) It has to as the term is statutory (e.g. Sale of Goods Act 1979 as amended); This states that it will be a condition of the contract that (inter alia); (3 marks)(i)the seller had title to the goods,(ii)the goods are of satisfactory quality and fit for purpose,(iii)the goods correspond with their description. (3 marks)(b)It is necessary for the efficacy of the particular contract: The Moorcock; or(c)It is customary through trade usage. Terms implied by custom can
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