Contract Law - Notice of Breach and CISG

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Questions and Answers

What is the consequence of failing to give notice of a breach according to Article 39?

The buyer can claim damages without limitation.

The buyer maintains the right to cancel the contract without notice.

The buyer loses the right to any remedy, including damages. (correct)

The seller has to provide a refund regardless of the situation.

How does CISG address the right to cure a non-conformity?

It allows the aggrieved party to refuse any cure.

It explicitly prohibits the right to cure under all circumstances.

It grants the right to cure without any conditions.

It permits cure if it does not cause unreasonable delay or inconvenience. (correct)

What factors determine the reasonable time for giving notice of a breach?

The nature of the goods and the buyer’s knowledge of non-conformity. (correct)

The duration of the contract and historical sales data.

The size of the contract and the distance between parties.

The pricing agreement and included service level.

Under what condition can the buyer terminate the contract according to the ability to make restitution?

When the goods can be returned in substantially the same condition. Signup and view all the answers

What limitation is associated with restitution as specified in Article 82(1)?

Parties can get a refund of payment plus goods after termination. Signup and view all the answers

What legal principle must be considered when discussing the restriction from T due to earlier statements regarding the sale?

Estoppel Signup and view all the answers

What was the primary issue concerning the financing situation of P?

P's aunt's loan fell through. Signup and view all the answers

What does the doctrine of waiver imply in relation to restrictive covenants?

Waiver only applies to express restrictions within contracts. Signup and view all the answers

What is indicated by the term 'detrimentally rely' in the context of P's situation?

P missed other financial opportunities. Signup and view all the answers

In terms of relief against forfeiture, what could invalidate a claim for such relief?

If evidence showed that P could not obtain financing. Signup and view all the answers

How does the casual nature of communication influence the legal standing of promises made regarding a contract?

Casual language may weaken the seriousness of a promise. Signup and view all the answers

What was the outcome regarding the painting warranty in relation to the sale of the property?

The painting was found subsidiary and did not relate to the sale of land. Signup and view all the answers

What role does 'good faith' play in the context of restrictions on legal obligations?

It only restricts express RTT under common law. Signup and view all the answers

What is the primary purpose of damages in contract law?

To compensate the non-breaching party Signup and view all the answers

What does the compensation principle entail in the context of contract breach?

The non-breaching party should be restored to their original position as if the contract had been fulfilled Signup and view all the answers

Which of the following is NOT considered when identifying a breach of contract?

Assessing the character of the breaching party Signup and view all the answers

What must a claimant show to recover damages for lost profits due to a breach of contract?

That they had a realistic expectation of profit from the contract Signup and view all the answers

In the case of fraud or mistake, how does the law generally view the behavior of the tenant in relation to forfeiture?

A tenant may be seen as unconscientious if fraud or mistake occurs Signup and view all the answers

What is required for a party to affirm a contract under common law?

Knowledge and unequivocal conduct Signup and view all the answers

If a party sends a draft deed without a clear intention to affirm, what does this indicate?

They are considering their options. Signup and view all the answers

Which is a correct statement regarding the application of the tramways test?

The test points to conditions that must be satisfied for a claim Signup and view all the answers

What is the fundamental distinction between special conditions and general terms in a contract?

Special conditions are specific to the contract while general terms are broader in nature Signup and view all the answers

Under common law, what must an aggrieved party show to be entitled to terminate a contract for breach?

They must be ready and willing to perform the contract. Signup and view all the answers

What does 'relief against forfeiture' provide for the tenant?

Protection against arbitrary eviction Signup and view all the answers

What principle applies regarding readiness and willingness in cases of anticipatory breach?

It only matters if seeking loss of bargain damages. Signup and view all the answers

What does the phrase 'not confronted with mutually exclusive courses of action' imply in the context of contractual rights?

The party can keep their options open without affirming. Signup and view all the answers

Which case highlights that non-essential breaches do not prevent termination?

Sharjade v Cth Signup and view all the answers

What effect does providing delay have on the affirmation of a contract?

It indicates a lack of intent to affirm. Signup and view all the answers

What must a plaintiff demonstrate for a court to grant specific performance?

Readiness and willingness to perform the contract. Signup and view all the answers

What is required for a party to exercise a right to terminate under a contract despite a breach by the other party?

No restrictions as the breach is non-essential Signup and view all the answers

Which of the following is NOT an element of estoppel as outlined in the context provided?

Reliability Signup and view all the answers

In the context of estoppel, what must the relying party demonstrate about the assumption they adopted?

They acted reasonably based on that assumption Signup and view all the answers

In the case of estoppel, which of the following is an indication that the representor must show?

They intended for the relying party to act on the assumption Signup and view all the answers

What circumstance relates to the reasonableness of the relying party in estoppel?

The relying party acted in a proportional manner Signup and view all the answers

What is a key factor that can prevent a party from exercising their right to terminate, when an assumption about contract performance is made?

Unconscionability in the circumstances Signup and view all the answers

In the scenario involving the sale of land, what led to the issue of the right to terminate being questioned?

The representor’s subsequent refusal of the payment Signup and view all the answers

Which aspect of detrimental reliance is highlighted in the concept of estoppel?

The reliance must be based on an assumption created by the representor Signup and view all the answers

Study Notes

Notice of Breach

A party must provide notice of any breach, even if termination is not desired.
Failure to give notice results in loss of remedies, such as damages.
Reasonable time for notice varies depending on the goods. For perishable goods, such as apples, the time is short, whereas for machinery or noble metals, it is longer.
Notice period begins when the buyer becomes aware of the non-conformity.
Under the CISG, a right to cure is not available in Australia.
The CISG (Art 48) and UNIDROIT (Art 7.1.4) permit a right to cure, but only if it doesn't place an undue burden on the aggrieved party.
If a non-conformity can be remedied, the buyer cannot claim fundamental breach and cannot terminate the contract.
A buyer can only terminate a contract if they can return the goods in substantially the same condition as they were received.
The right to terminate is subject to limitations under Article 82(1) of the CISG.

Readiness and Willingness

A party seeking termination must demonstrate readiness and willingness to perform their obligations under the contract.
This requirement may not apply to terminations based on express termination clauses.
Readiness and willingness are not necessary for non-essential breaches.
How the requirement of readiness and willingness applies to actual and anticipatory breaches requires consideration of case law, particularly Foran v Wight and Sharjade v Cth.
The requirement of readiness and willingness may be relevant to a court's decision to grant specific performance.
A party's breach of a non-essential term does not preclude them from terminating the contract, as long as it does not hinder their readiness and willingness to perform their obligations.

Estoppel

Estoppel can restrict a right to terminate where there is detrimental reliance on an assumption induced by the other party.
Legione v Hateley demonstrates the concept of estoppel in contract law.
Detrimental reliance occurs when a party acts to their detriment based on an assurance from the other party that the right to terminate will not be exercised.
A gratuitous promise, without consideration, is not legally binding and does not protect against a change of mind.
Estoppel and waiver are both relevant to the right to terminate and should be considered when analyzing cases.

Relief Against Forfeiture

Relief against forfeiture is a discretionary remedy used to prevent a party from unfairly benefiting from a forfeiture of rights.
Where a party's breach is minor, there is a possibility of relief against forfeiture being awarded.
Relief against forfeiture protects against the unconscientious exercise of legal rights, such as termination.
Key elements for relief against forfeiture include undue hardship, unconscionable behavior, and contributing to the breach.
When considering relief against forfeiture, it's important to consider cases like Legione v Hateley and Tanwar Enterprises Pty Ltd v Cauchi.

Good Faith

Good faith is not a general principle in Australian contract law, unless expressly agreed upon in the contract.

Damages

Damages are awarded by a court to compensate for a breach of contract.
The general rule for damages is the compensation principle, which aims to place the injured party in the same position they would have been in had the contract been performed.
When assessing damages, the court considers various factors, including the type of breach, the nature of the contract, and the types of losses suffered, such as lost profits or specific expenses.
Damages can be awarded for:
- Obligations to build or repair.
- Loss of chance of a benefit.
- Contracts with no profit or where a benefit cannot be determined (reliance damages).
The measure of damages is crucial, as it involves determining a monetary value for the losses incurred.
When assessing damages, it's important to consider how the situation would have differed if the contract had been performed.

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Description

Explore the critical aspects of contract law, focusing on the notice of breach and the implications under the CISG and UNIDROIT. This quiz assesses your understanding of the requirements for notice, the right to cure, and the conditions for contract termination. Perfect for law students and professionals looking to refresh their knowledge.