Law of Contract Practice Flashcards

This set of vocabulary flashcards covers the essential elements, terminology, legal rules, and case law precedents related to the Law of Contract as detailed in the lecture notes.

Contract

A legally binding agreement between two or more parties.

Offer

A definite proposal by one party to another or a definite promise to be bound by specific certain terms.

Offeror

The person who makes the offer.

Offeree

The person to whom the offer is directed.

Carlill vs. Carbolic Smoke Balls Company Ltd.

A legal case which held that an offer could be made to the world at large, and it needs not to be made only to a specific person or group.

Communication of the Offer

The rule that an offer becomes valid only when it is communicated to the offeree and the offeree receives that information.

Revocation

The withdrawal of an offer by the offeror at any time before the offeree accepts it.

Deed

A document which is attested by a notary public; an offer made via this form cannot be revoked before the agreed period.

Mirror Image Rule

The requirement that the offeree must accept the offer without making any modification to it.

Counteroffer

A fresh offer or an acceptance subject to conditions that indirectly rejects and terminates the original offer.

Hyde Vs Wrench

A case where a fresh offer of $\text{\pounds}950$ was held to be a counteroffer that terminated the original offer of $\text{\pounds}1000$.

Lapse of Time

The termination of an offer at the end of a stated period or, if no period is stated, after a reasonable period (e.g., Ramsgate Victoria Hotel Vs Montifiore).

Invitation to Treat

A mere request to start negotiations with a view to enter into a contract in the future, such as goods displayed in a shop window.

Fisher Vs Bell

A case ruling that displaying knives in a shop window with price tags is an invitation to treat, not an offer for sale.

Acceptance

An unconditional approval of the offer by the offeree, which becomes irrevocable once made.

Felthouse vs. Bindley

A case establishing that an offeree’s silence cannot be treated as an acceptance.

Postal Rule

An exception where acceptance becomes effective at the time of posting the letter, even if it is lost or delayed.

Unilateral Contract

A contract where only one party performs an activity for a reward, and performing that activity is treated as acceptance without compulsory communication.

Valuable Consideration

Something of value in the eye of the law which may be a benefit to the defendant or a detriment to the plaintiff.

Justa Causa

The Roman Dutch law requirement for a valid contract, consisting of either valuable consideration or a moral obligation.

Moral Obligation

A situation, such as a gift from parents to a child due to affection, which is sufficient to create a valid contract under Roman-Dutch law.

Domestic Contracts

Agreements like Balfour vs. Balfour where the legal presumption is that there is no intention to create legal relations.

Section 18 of the Prevention of Fraud Ordinance

A statutory provision requiring partnership agreements to be in writing if the opening capital exceeds $Rs\,1,000/-$.

Express Terms

Terms of a contract that are specifically agreed upon by the parties, either in writing or orally.

Implied Terms

Terms attributed to a contract by a court, trade customs, or statutes to give effect to the parties' contractual intentions.

Conditions

Vital terms going to the root of the contract; breach allows the innocent party to terminate the contract and claim damages.

Warranties

Minor or lesser important terms; breach allows the innocent party to claim damages only.

Void Contracts

Contracts that are a complete nullity in law from the beginning, often because the purpose is illegal.

Voidable Contracts

Contracts that are valid until declared invalid by a court, such as those involve minors, duress, or misrepresentation.

Unenforceable Contracts

Contracts that the court refuses to enforce due to a lack of certain technical formalities stated in a statute.

Frustration

The termination of a contract because a party is unable to perform duties due to reasons beyond their control, such as natural disasters or ‘acts of God.’

Specific Performance

A court order directing a defaulted party to perform their contractual obligations as agreed.

Injunction

A court order preventing a party to a contract from doing a particular act.

Payment for the Work Done

An alternative remedy to damages where an innocent party claims the value/worth of the quantity of work they have already performed.