Business Contract Terms Unit 2

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Questions and Answers

Where does acceptance take place in the case of instant communication like a telephone call?

At the place where the acceptance is made

At the place where it is received (correct)

At a predetermined location

At the place where the offeror is located

What happens if the acceptance is drowned out by noise, according to the case of Entores v Miles Far East Corp?

The acceptance is deemed implicit

The contract is still valid

No contract exists unless acceptance is repeated (correct)

The parties must renegotiate

In which situation would acceptance not create a binding contract?

When both parties sign an agreement

When the terms are mutually understood

When the offeree agrees directly without conditions

When the acceptance is expressed as 'subject to contract' (correct)

Which term in an agreement would have potentially allowed for a binding contract in the case of Branca v.Caborra?

Tentative Signup and view all the answers

What does the court consider with vague terms in a contract?

They may imply unstated terms Signup and view all the answers

In the case of Foley v.Classique Coaches Ltd, what was the court's ruling regarding the lack of a stated price?

It did not invalidate the contract Signup and view all the answers

What does a statement indicating that acceptance is 'subject to contract' imply?

It negates the intention to create legal relations Signup and view all the answers

Which of the following scenarios implies valid acceptance?

An acceptance clearly communicated without conditions Signup and view all the answers

What are terms implied by the parties in a contract?

Terms that are deemed part of the contract by law even if not discussed Signup and view all the answers

What is an example of a term implied by custom?

A varying contract price for unstable materials in construction Signup and view all the answers

In the Sale of Goods Act, what is implied about goods?

Goods are of satisfactory quality unless stated otherwise Signup and view all the answers

What does the phrase 'time is of the essence' mean in the Sale of Goods Act?

Buyers may reject late deliveries unless agreed otherwise Signup and view all the answers

Which of the following best describes terms implied by statute?

Terms mandated by legal regulations to protect against power imbalances Signup and view all the answers

In Frafra v. Boakye, what was the court's implication regarding the use of a tractor?

The tractor should fulfill the warranty of fitness for hauling timber Signup and view all the answers

Which case exemplifies terms implied by custom in construction contracts?

Sowah v. Bank for Housing and Construction & Another Signup and view all the answers

What happens if the parties do not expressly exclude fluctuation payments in a construction contract?

They are implied as a standard practice Signup and view all the answers

What is the main distinction between a void contract and a voidable contract?

A void contract has no legal force at all. Signup and view all the answers

Which of the following is a circumstance that may vitiate a contract?

Actual or threatened violence. Signup and view all the answers

In which case is the principle of quantum meruit applied?

Remuneration for services rendered without prior agreement. Signup and view all the answers

Which of these is NOT a recognized ground for vitiating a contract?

Mutual understanding. Signup and view all the answers

What does the court typically provide as a remedy in the case of a breach of contract?

Monetary compensation based on remoteness. Signup and view all the answers

How does a unilateral mistake affect a contract?

It may be disregarded if the other party was aware. Signup and view all the answers

What does 'remedy' in law generally refer to?

The means of recovering rights or obtaining redress. Signup and view all the answers

What term describes a contract that is not enforceable due to being against public policy?

Invalid contract. Signup and view all the answers

What can the buyer do if the seller fails to deliver the correct goods on time?

Reject the goods delivered Signup and view all the answers

What constitutes a breach of warranty according to the Sale of Goods Act?

Delivery of a lesser quantity of goods Signup and view all the answers

What is the fundamental obligation of the seller in the sale of specific goods?

To deliver the specific goods to the buyer Signup and view all the answers

How do sections 8(2) and 11 of the Sale of Goods Act differ?

8(2) requires delivery of corresponding goods, while 11 requires exact matches with descriptions Signup and view all the answers

In a case where 100 French oranges were supposed to be delivered, what happens if only 80 are delivered?

The seller can only sue for damages Signup and view all the answers

What happens when there's a breach of either fundamental obligation or condition according to the Sale of Goods Act?

The aggrieved party can discharge the contract Signup and view all the answers

What kind of breach occurred in Bowes v. Shand when rice was shipped earlier than agreed?

Breach of condition Signup and view all the answers

What does section 12 of the Sale of Goods Act imply?

Goods sold by sample must exactly match the sample Signup and view all the answers

What was the primary consideration that the plaintiff provided in the Charment & Another case?

Procurement of timber concessions Signup and view all the answers

In the context of the Charment & Another case, what did the defendants promise the plaintiff in return for his services?

5% shares in the company and cash remuneration Signup and view all the answers

What key issue did the court identify with the offer in Scamell and Nephew Ltd. v Ouston?

The offer terms were vague and uncertain Signup and view all the answers

In general offers, what distinguishes an offer made to a specific individual?

It can only be accepted by the intended recipient Signup and view all the answers

What does the court generally prefer regarding terms of an offer?

Terms that are clear and certain Signup and view all the answers

What was said about the proposals for the plaintiff's appointment in Charment & Another case?

They were mere indications of good intentions Signup and view all the answers

What aspect did the court look for in determining the enforceability of a vague offer?

Previous dealings between the parties Signup and view all the answers

How did the court characterize the agreement in the Scamell and Nephew Ltd. case?

It had not passed the stage of negotiation Signup and view all the answers

What happens to an offer once acceptance occurs?

It ceases and merges into a contract. Signup and view all the answers

Which of the following events can lead to the termination of an offer?

Revocation of the offer. Signup and view all the answers

In the case of `Byrne v. Van Tienhoven`, why was the revocation of the offer ineffective?

The acceptance was received before the revocation. Signup and view all the answers

What was the outcome in the case of `Dickinson v. Doods`?

The offer was revoked effectively even without communication. Signup and view all the answers

What does the performance of a condition in an offer impact?

It can prevent revocation of the offer. Signup and view all the answers

If the offeror dies before the offer is accepted, what happens to the offer?

It terminates. Signup and view all the answers

Which case exemplifies that an offer cannot be revoked once performance has commenced?

Errington v. Errington & Woods Signup and view all the answers

What must occur for a revocation of an offer to be valid?

It must be communicated to the offeree. Signup and view all the answers

Study Notes

Unit 2: Agreement and Terms of a Business Contract

Learning Objectives:
- State and explain the basic elements of a contract.
- Define and describe the terms of a contract.
- Apply the principles to hypothetical and real situations.

Session 1-2: Agreement: Offer and Acceptance

1-2.1 Clarity of an Offer:
- An offer is a firm proposal from one party (offeror) to another (offeree).
- The offeror promises or undertakes to do, give, or forbid something specific.
- The offer is open for acceptance by the offeree at any time, unless revoked by the offeror.
- Example: Nana Yao offers to sell his car to Kwabena for GH¢2,000; Kwabena must accept the specific terms for the sale to be legally binding.
1-2.2 Termination of an Offer:
- Offer termination can stem from revocation of the offer, rejection by the offeree, lapse of time, failure of an attached condition, or the death of the offeror.
- Revocation: Offeror can withdraw offer any time before acceptance, but must communicate this to the offeree.
- Rejection (of an offer by the offeree): Offer ends – offeree cannot accept later.
- Lapse of time: Offer ends after a reasonable time, or a specified time period.
- Failure of an attached condition: Condition required for acceptance is not met.
- Death of offeror: Offer terminates if the offeror dies.
1-2.3 Acceptance:
- Acceptance is an agreement to all terms of the offer.
- It can be oral, written, or implied.
- Acceptance must exactly match the offer, or it's a counter-offer (terminating the original).
- Acceptance takes effect when communicated to the offeror.

Session 2-2: Terms of Business Contracts

2-2.1 Warranties and Conditions:
- Conditions: Fundamental obligations of a contract – breach allows the other party to terminate.
- Warranties: Minor obligations; breach allows only for damages.
- Case Example: Frafra v Boakye (1976): Incorrect representation about a tractor's hauling capacity – breach of warranty.
2-2.2 Types of Contractual Terms:
- Express terms: Explicitly stated agreements between parties.
- Implied terms: Terms not explicitly stated but understood from custom, statute, or court interpretation; or common practice.
2-2.3 Exemption Clauses:
- Designed to limit liability for breaches of terms.
- Courts interpret them narrowly to prevent unfair treatment of one party.

2-2.2 Vitiation and Remedy

Circumstances Affecting Validity of Contracts:
- Duress (threat of violence)
- Undue influence (unfair advantage in a relationship)
- Mistake (misunderstanding)
- Misrepresentation (false statement)
- Unconscionable conduct(oppressive, one-sided, or unreasonable).
Remedies for Breach of Contract:
- Damages: Monetary compensation for losses suffered due to the breach.
- Quantum meruit: Fair payment for services performed, even without an exact agreement.

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Description

This quiz focuses on the fundamental aspects of business contracts, emphasizing the elements of agreement, offer, and acceptance. Participants will explore the clarity of offers and conditions for their termination, applying these principles to various scenarios.