Contract Law - Intention, Certainty & Formalities

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Flashcards covering intention, certainty, and formalities in contract law.

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30 Terms

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Intention in Contract Law

The intention to create legal obligations, legal relations, or to be bound by an agreement.

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Honour Clauses

Clauses in a contract that explicitly state the agreement is not legally binding.

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Rose & Frank Co v Crompton (JR) & Bros Ltd

A case illustrating that an agreement explicitly stating it is not a formal or legal agreement will not be legally binding.

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Social/Domestic Agreements (Presumption)

The principle that agreements between family and friends are presumed not to be legally binding.

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Balfour v Balfour

A case illustrating agreements between family members are presumed not to be legally binding unless rebutted.

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Wakeling v Ripley

A case that shows when consequences of an agreement between family members are serious, the parties intended to create a binding and enforceable contract.

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Business & Commercial Agreements (Presumption)

The principle that agreements in a commercial context are generally presumed to be binding.

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Ermogenous v Greek Orthodox Community of SA Inc

A view of the usefulness of traditional presumptions in determining intention; emphasizes a need to assess all the facts and surrounding circumstances.

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Intention

An area of contract law where the court assesses whether the parties to a contract intended that the agreement affect their legal relations.

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Certainty in Contract Law

States that a contract must be sufficiently complete, certain, and that the promises must not be illusory.

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Completeness (Certainty)

When parties must have agreed to the essential terms of the agreement such as the parties, subject matter, consideration, and nature of the contract.

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Certainty of Terms

Terms that must be sufficiently clear and certain within a contract, and capable of a precise meaning.

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Illusory Promises

Statements which are not a genuine promise, and are unenforceable.

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Best and Reasonable Endeavours

A clause that requires a party acting reasonably, or not to unreasonably refuse something that relates to an agreement with another party.

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Agreements to Negotiate in Good Faith

Agreements to agree that will generally be void for uncertainty because courts will not enforce an incomplete agreement.

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Rule of Signature

States that if a contract has been signed, then a contract must be read, understood and agreed (regardless).

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Formalities (Contracts in Writing)

A contract that is required to be in writing by law where it can only be varied in writing, but terminated orally.

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Privity of Contract

The principle that only parties to a contract can enforce or be bound by it.

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Third Party Beneficiaries

Individuals who may benefit from a contract but are not parties to it and generally cannot enforce it.

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Contractual Capacity

The legal ability to enter into a contract.

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Minors and Contracts

Contracts with minors are generally voidable, except for necessities and beneficial contracts of service.

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Necessities (Contract Law)

Essential items or services for a minor's survival and well-being, such as food, clothing, and shelter.

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Beneficial Contracts of Service

Contracts that benefit a minor, such as employment or apprenticeship agreements, which are generally enforceable.

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Mental Capacity and Contracts

A contract may be voidable if one party lacks the mental capacity to understand the nature and consequences of the agreement.

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Intoxication and Contracts

A contract may be voidable if one party is so intoxicated that they do not understand the nature of the agreement, and the other party is aware of their condition.

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Legality of Object

The purpose or object of a contract must be legal for it to be enforceable.

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Contracts Illegal by Statute

Contracts that violate a law are illegal and unenforceable.

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Contracts Illegal at Common Law

Contracts that are contrary to public policy are illegal and unenforceable.

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Restraint of Trade

Agreements that restrict a person's ability to carry on a business or profession, which may be void unless reasonable.

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Reasonableness in Restraint of Trade

A test to determine if a restraint of trade clause is enforceable, considering the geographic scope, duration, and legitimate interest being protected.