Contract Law Flashcards - Core Concepts and Doctrines

Vocabulary flashcards defining fundamental legal terms, case rules, and doctrines from Contract Law notes.

Unilateral Contract

A contract where one party takes responsibility and the other may or may not; the offeror is specified from the outset but the offeree may not be (e.g., Carlill v Carbolic Smoke Ball Company [1893]).

Bilateral Contract

A contract where both parties take responsibility and both the offeror and offeree are specified from the outset.

Offer

Defined in Storer v Manchester City Council [1974] as inviting another person to enter into a binding contract; a statement that is certain with no room for further negotiations.

Invitation to Treat (ITT)

Defined in Gibson v Manchester City Council [1979] as inviting an offer from the other party or making statements that invite the other party to commence negotiations.

Counter Offer

An offeree's response that alters the terms of the original offer, which nullifies the original offer and becomes a fresh offer (Hyde v Wrench [1840]).

Postal Rule

A rule established in Adams v Lindsell [1818] stating that postal acceptances are valid when posted rather than when communicated, with the postman acting as an agent to the offeror.

Consideration

A legal requirement derived from Currie v Misa based on reciprocity, where one party receives a benefit while the other incurs a detriment, giving the contract enforceability.

Past Consideration

An act executed prior to a promise being given, which as a general legal principle cannot serve as valid consideration to enforce that promise (Roscola v Thomas).

Practical Benefit

A doctrine from Williams v Roffey where an extra promise given for performing an existing duty remains binding if the promisor gains a practical advantage without economic duress.

Economic Duress

Occurs when one party uses its superior economic power to force a weaker party into an agreement, distinguished from acceptable commercial pressure (DSDN Subsea Ltd v Petroleum Geo-Services ASA [2000]).

Promissory Estoppel

An equitable doctrine introduced in Hughes v Metropolitan Railway and refined in the High Trees case that prevents a promisor from going back on a promise without consideration; it acts as a shield, not a sword.

Contract for Necessaries

Defined under s.3(3) of the Sale of Goods Act 1979 as goods suitable to the condition in life of a minor and their actual requirements at delivery, which are legally binding on the minor.

Parol Evidence Rule

A rule stating that where a contract is set out in a written document, the court will not consider extrinsic or oral evidence outside of what is expressly written (Jacobs v Batavia).

Innominate Term

A contractual term introduced in Hong Kong FIR that cannot be pre-classified as a condition or warranty, depending instead on whether its breach deprives the innocent party of substantially the whole benefit of the contract.

Contra Proferentem Rule

A doctrine of contractual interpretation where the court interprets an ambiguous term or exclusion clause against the party seeking to rely on it (Houghton v Trafalgar Insurance).

Test of Reasonableness (UCTA 1977)

Defined under s.11 of the Unfair Contract Terms Act 1977 as whether a term was fair and reasonable in light of all circumstances known or reasonably known at contract formation.

Fairness Test (CRA 2015)

The standard under s.62(4) of the Consumer Rights Act 2015, which classifies a term as unfair if, contrary to good faith, it causes a significant imbalance in the parties' rights and obligations to the detriment of the consumer.

Fraudulent Misrepresentation

A false statement made knowingly, without belief in its truth, or recklessly as to whether it is true or false (Derry v Peek [1889]).

Fiction of Fraud

The principle established in Royscott v Rogerson where damages for statutory misrepresentation under s.2(1) of the Misrepresentation Act 1967 are calculated using the tort of deceit standard.

Rescission

An equitable remedy that sets aside a contract from the beginning (ab initio) and attempts to restore the contracting parties to their pre-contractual positions.

Cross Purpose Mistake

A mistake where both parties are mistaken about different matters, rendering the contract void only if an objective bystander cannot determine what the parties agreed on (Raffles v Wichelhaus).

Mistake of Res Sua

A common law mistake where a party enters into a contract to acquire property or rights that they already own, rendering the contract void (Cooper v Phibbs).

Frustration

The automatic discharge of a contract when an unforeseen event occurs after contract formation without fault of either party, making performance impossible, illegal, or radically different (National Carriers Ltd).

Anticipatory Breach

An express or implied refusal by a party to perform its contractual obligations before performance is due, enabling the innocent party to terminate immediately and seek damages.