Contract Law Overview Quiz

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Questions and Answers

Which of the following is a core element of a contract?

Offer (correct)

Termination

Negotiation

Amendment

What does the mirror image rule refer to in contract law?

Acceptance must exactly match the offer. (correct)

Counteroffers are considered valid acceptances.

Offers can be altered during negotiation.

Rejection of an offer can lead to a new offer.

What is required for consideration to be valid in a contract?

It must be verbal rather than written.

It must be from a third party.

It must have sufficient value. (correct)

It must be future-oriented.

Which type of contract is characterized by a promise for a promise?

Bilateral contract Signup and view all the answers

Under what condition can a promise not to enforce contractual rights be made without consideration?

Under promissory estoppel. Signup and view all the answers

What does the Contract (Rights of Third Parties) Act 1999 primarily address?

It permits third parties to enforce contractual rights under certain conditions. Signup and view all the answers

Which of the following is presumed to not be legally binding?

A social agreement among friends Signup and view all the answers

In terms of capacity to contract, which of the following individuals may have limitations?

Those under the influence of drugs Signup and view all the answers

Under what condition may a minor be ordered to transfer property acquired from a contract?

If it is just and equitable to do so Signup and view all the answers

What is required for a contract to be voidable due to mental incapacity?

The individual must be unaware of the nature of the contract Signup and view all the answers

What does the Contracts (Rights of Third Parties) Act 1999 allow?

Third parties can enforce certain rights if expressly stated in the contract Signup and view all the answers

Which of the following is NOT a reason why third parties generally cannot acquire rights under a contract?

There is no writing required for the contract Signup and view all the answers

In terms of necessaries, what must a minor who has entered a contract provide?

A reasonable price for the necessaries provided Signup and view all the answers

What does mental incapacity refer to in the context of contract law?

The individual’s inability to make a decision regarding the contract Signup and view all the answers

Which aspect of mental incapacity must be demonstrated to void a contract?

Inability to understand relevant information Signup and view all the answers

What is the key purpose of consideration in contract law?

To establish a legal basis for parties to enter a contract Signup and view all the answers

What is a collateral contract?

A secondary agreement between the promisor and a third party that allows the third party to sue. Signup and view all the answers

Under which condition can a third party enforce a contract according to the Contracts (Rights of Third Parties) Act 1999?

They must be identified as a third party and benefit from a term of the contract. Signup and view all the answers

What was the outcome of the case Tweddle v Atkinson?

The claim was rejected because the groom did not provide consideration. Signup and view all the answers

Which of the following best describes 'consideration' in the context of contracts?

An element that makes a contract legally binding, such as a promise or payment. Signup and view all the answers

Which scenario illustrates a situation where third-party rights might be exercised?

An executor seeks damages on behalf of beneficiaries affected by a contract. Signup and view all the answers

According to the legal principles, which aspect prevents a third party from enforcing a contract?

When the third party did not provide consideration for the promise. Signup and view all the answers

How does the Contracts (Rights of Third Parties) Act 1999 limit third-party rights?

It prevents contracts from being enforced against third parties. Signup and view all the answers

What is a typical remedy available for a third party when a contract they benefit from is breached?

Compensation for loss of benefits and expenses incurred. Signup and view all the answers

Study Notes

Contract Law

This document is a practice guide for students
It's not a comprehensive statement of the law or practice
Professional advice should be sought if needed
Copyright 2024, used under license from the copyright owners
Reproduced by the College of Legal Practice
Published in the United Kingdom
July 2024

Formation

Offers need to be specific, comprehensive, and capable of acceptance (offeror/offeree)
Opening negotiations can be confused with invitations to treat
Invitations to treat are not offers
Acceptance is when an offer is communicated/reciprocated by the other party(s)
Adverts are usually invitations to treat.
This is an objective (reasonable person's perspective) test.

Acceptance

Acceptance must exactly match the offer (mirror image rule)
Acceptance occurs when communicated, unless specified otherwise
Silence is not acceptance
Postal rule applies in certain situations

Revocation of an Offer

Effective when communicated
Communication can come from an authorized third party if reliable
Offers have time periods and revocation before the end is possible if communicated

Consideration

Defined as 'some benefit, interest, profit or responsibility"
Must be sufficient (but not necessarily adequate), meaning it has value (money or a service-type exchange)
Past consideration is not enough

Exceptions to the Past Consideration rule

There are exceptions/additional situations where act, benefit, payment, or service can be considered as valid consideration, and does count.

Formation Additional Issues

Certainty: clear and unambiguous terms required
Formalities: certain contracts need to be in formal written (or deed) forms for enforcement
Contract by deed: specific requirements for execution and delivery
Contractual duty: duty owed to a third party or a party can be seen as valid consideration

Privity of contract

Only parties to a contract can enforce it, or assume liability, against the other parties.
Exceptions (Third Party Rights): The Contracts (Rights of Third Parties) Act 1999

Intention to create legal relations

Presumptions in different contexts (social/domestic vs. commercial)

Mental incapacity and minors

Minors and those with mental incapacity have limited contractual capacity.

Terms

Express terms: explicitly stated in the agreement
Implied terms (statutory and custom): terms automatically included in a contract
Interpretation of terms (conditions, warranties, and innominate terms)
Exclusion clauses: clauses designed to limit/exclude liability (interpretation and effectiveness important)

Variation of terms

Changes to contract terms.

Unfair Terms

The Unfair Contract Terms Act 1977 (UCTA) and the Consumer Rights Act 2015 (CRA).
Consumer protections in relation to contract terms.

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Description

Test your knowledge of Contract Law with this comprehensive quiz. Explore key concepts such as formation, acceptance, and revocation of offers. Ideal for students seeking to deepen their understanding of legal principles in the context of contracts.