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Contract Law (Formation of Contract (Acceptance (A1. Communicated (Case:…

- - - - An offers
        
        Rule 1. Made orally, in writing or by conduct
        
        Rule 2. Made to a person, a group or the word
        
        Rule 3. Must be communicated to offeree(s)
        
        Case: Carlill v Carbolic Smokeball Co.
      - Not an offer
        
        Invitation to treat
        
        Request for / supply of information
        
        Declaration of Intent
    - - T1. Lapse of time (if no specific period, follow market practice)
        
        Case: Ramsgate Victoria Hotel v Montefoire
      - T2. Withdrawal (must be communicated to the offeree)
        
        Case: Byrne v Van Tienhoven
      - T3. Rejection (incl. counter offer)
        
        Case: Hyde v Wrench
      - T4. Death of offeror/offeree
  - - - Case: Felthouse v Bindley (Silence was not acceptance, no contract)
    - - 'Last short' wins: each new form is treated as a counter-offer, when one party performs its obligation under the contract, that action will be seem as acceptance by conduct of the contract in the last form
    - - Whether the 'signature' fulfills an authenticating function (i.e., it's able to identify the person and indicate the person's intention)
  - - - The court presumes that the parties want their contract to be legally binding
    - - The court presumes the parties do not intend their agreement to have legal effect.
  - - - C1. Must be real/sufficient (material value in financial terms)
      - C2. Need not be adequate
      - C3. Must not be past
      - C4. Must move from the promisee (Privity of Contract)
- - - - Terms vs. Representations: Depends on intention of the parties. 5 guidelines where it is more likely to be a term:
        
        g1. the statement was made closer to the time of the contract
        
        g2. it was emphasised that the statement was important
        
        g3. the maker of the statement has any special knowledge or expertise which would be reasonable for the recipient to reply upon
        
        g4. the maker of the statement invited the recipient to verify the statement for himself
        
        g.5 if the statement was subsequently incorporated in a written agreement
    - - e.g. vague statement due to imprecision or exaggeration (e.g. a car ad saying: "The Drive of Your Life!"
  - - - Conditions
        
        "Go to the root of the contract", breach of conditions leads to fundamental breach of the contract
      - Warranties
      - Excluding & limiting clauses
        
        Exclusion Clause
        
        E1. The clause is incorporated into the contract BEFORE the contract is made
        
        E2. The clause, when properly interpreted, clearly covers the damage.
        
        E3. The clause complies with the UCTA (Unfair Contract Terms Act), i.e. not void. Excluding liability due to negligence. (Ref. p44, lec3)
        
        Limitation of liability clause
      - Indemnity clauses (Transfer liability)
    - - In fact
        
        The officious bystander test
        
        Case: Shirlaw v Southern Foundries (1926)
        
        The business efficacy test
        
        Case: The Moorcock (1889)
      - Statue (law)
        
        Sec 13 and Sec 14 of the "Sales of Goods Act"}
        
        Sec 13. Sale by description
        
        Sec 14. Quality or fitness
      - Customs and practices
        
        Case: Hutton v Warren (1836)
- - - - Both parties: existence of subject matter
        
        Case: Galloway v Galloway (1914)
      - Both parties: basis of contract
      - Mutual mistake (cross-purposes)
        
        Case: Raffles v Wichelhaus (1864)
      - Unilateral mistake: fundamental mistake
        
        Case: Chewee Kin Keong v. Digilandmall.com Pet Ltd (2005)
    - - He has not been negligent
      - His signature was induced by fraud or trick
      - He signed the contractual document in believing that it is a totally different document
      - Case: Saunders v Anglia Building Society
    - - As to performance
        
        One party knows: VALID
        
        Two parties know: may VOID
      - Upon formation (Maybe VOID)
        
        Case: Ting Siew May v Boon Lay Choo (2014)
    - - Duress: threat of physical violence
      - Undue Influence: mental/social pressure
    - - Misrepresentation v.s. Terms
        
        Terms = Statement that become part of the contract
        
        Representations = Statements made during negotiation
      - Proving Misrepresentation
        
        Untrue statement of material fact made by one party (A) to the other party (B) to induce that party (B) to enter into the contract. The represented party (B) entered into contract in reliance of statement
- - - - Allows a Third-Party to enforce a contract if: contract allows him to do so, or a term in the contract benefits Third-Party
      - Contractual clause can exclude Third-Party right
    - - Transfer rights
      - Contractual Rights
        
        C1. Have value as "property"
        
        C2. Chose in Action
        
        C3. Can be transferred to another person
      - Assignment Must be
        
        A1. be in writing
        
        A2. be signed by the assignor
        
        A3. be absolute, i.e. complete and unconditional
        
        A4. be accompanied by notice in writing to the other contracting party (Note: consent of other contracting party not required)
      - Not possible where
        
        Contract Prohibits
        
        Performance of the contract by the other party becomes more onerous, effectively changing terms of contract to the disadvantage of other party
        
        Contract involves a personal skill
        
        Illegal or against public policy
    - - Transfer obligations
      - Three-party (tripartite) agreement
      - Old contract replaced by a new contract
- - - - Breach of Warranty
        
        No discharge, can only claim damage
      - Breach of Condition
        
        Contract discharged, no further obligations, can sue for damage
    - - Accept Breach
        
        Contract is discharged, sue for damage
      - Reject Breach
        
        Perform contract, if there is a breach later on, treat as actual breach
  - - - Contractual term to provide for rights and obligations in the event of war or natural disasters
- - - - Liquidated Damages
        
        Foreseable Damages
        
        LD vs. Penalty
        
        Penalty: if the sum is extravagant compared with the greated loss could be conceived to be suffered under contract
        
        Penalty: if it is a single sum irrespective of seriousness of damage
      - Unliquidated Damages
        
        Rule 1. The breach must have caused the damage/loss
        
        Rule 2. Loss must arise from the usual course
        
        Rule 3. Reasonably contemplated by the parties at the time contract was made
        
        Rule 4. The aggrieved party has to take reasonable steps to mitigate the loss.
    - - Claim for reasonable remuneration, proportion of work done, or price
  - - - E.g. unique property, cannot be labor
    - - Mandatory
      - Prohibitory