Contract Law Week 3 PDF

Week 3: Contract Law (Part 2) ============================= - consideration for an agreement - intention to create a legally binding contract - capacity to enter into a contract - terms of a contract Consideration ------------- - Offer accepted by another does not result in a legally...

Week 3: Contract Law (Part 2) ============================= - consideration for an agreement - intention to create a legally binding contract - capacity to enter into a contract - terms of a contract Consideration ------------- - Offer accepted by another does not result in a legally binding contract - Agreement must constitute a "bargain" 交易 - Each party must promise some benefit to each other - If the offeror makes a promise to the offeree and nothing is promised in exchange, the offeror is not bound by his promise Concept of an exchange of promises is known as "consideration" -------------------------------------------------------------- - If A agrees to sell a bottle of water to B for \$10: - → The promise to B is the benefit of the bottle of water. - → The promise to A is the benefit of \$10. What is executed and executionary consideration? 已執行vs 待執行 ---------------------------------------------------------------- Bottled water example: Executed consideration - If A gives the bottled water and B gives \$10 in return, both promises are executed Executionary consideration - If A states that the bottled water will be delivered 3 days later and payment must be made on delivery and B accepts this, both promises are executory Deed (遺囑 is one of the EG) ---------------------------- - A specialty contract - Does not require consideration - If B promises to give A by deed, it is legally binding - Signing block: signed, sealed and delivered Well established rules about consideration ------------------------------------------ - May be executed or executory, i.e., present or future, but it 'cannot be in the past' ------------------------------------------------------------------------------------- - Must move from the promisor --------------------------- - Must be legal ------------- - Must be something of value \[I give you a watch, you take care of my grandma 3 times a week\] --------------------------------------------------------------------------------------------- (disregard the value, not relevant to law) ------------------------------------------ **Must be sufficient but need not be adequate 足夠的** Past consideration is no consideration -------------------------------------- - Two situations (in the following slides) where an agreement is commonly made but not legally binding ---------------------------------------------------------------------------------------------------- - Reason: the consideration for the agreement is past --------------------------------------------------- First situation: ---------------- - An act is done voluntary ------------------------ - After that, an agreement is made to perform such act in return for a promise ---------------------------------------------------------------------------- Example: -------- - If B voluntarily promises to clean A\'s home and when B has finished, A promises to give B \$10 ----------------------------------------------------------------------------------------------- - there is no contract between A and B ------------------------------------ - the act of cleaning was not performed in exchange for the A's promise to give B \$10 ------------------------------------------------------------------------------------ Second situation: ----------------- - Where a legally binding contract has been made and subsequently one of the parties tries to change the contract by a promise of some variation or amendment. ------------------------------------------------------------------------------------------------------------------------------------------------------------ Example: -------- - If A contracts to sell his mobile phone to B and subsequently promises B that he will replace the screen cover but fails to do so, then B cannot sue A on the promise. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- - The new promise was not part of the original offer and acceptance. ------------------------------------------------------------------ - Exceptions: B gives some consideration for it or the promise is contained in a deed. ------------------------------------------------------------------------------------ +-----------------------------------------------------------------------+ | 案例 | | ---- | | | | Roscorla v Thomas (1842): | | ------------------------- | | | | - T sold R a horse for GBP 30 and subsequently stated that the | | horse was \'free from vice' | | | | - The horse proved to be vicious | | | | - R sued T for breach of contract | | | | - It was held that the subsequent promise was not a term of the | | contract. The consideration for the promise was past | | consideration | +-----------------------------------------------------------------------+ Consideration Must Move from the Promisee \*\*「對價必須來自承諾受方」\*\* -------------------------------------------------------------------------- - person who receives a promise is the **[promisee].** ---------------------------------------------------------------- - this rule requires the person who accepts an offer to supply the consideration ------------------------------------------------------------------------------ - whether a person is making an offer or an invitation to treat will depend on the circumstances but in practice, it does not matter ---------------------------------------------------------------------------------------------------------------------------------- 甲、乙兩方立約，只需要證明代價由甲（promisee）付出，而不必一定要付給乙（開條件的人） 是合同法中的一個原則，意思是要使合同具有法律效力，承諾的接受方（承諾受方）必須提供某種對價，這可以是金錢、物品、服務，或者是一項承諾。換句話說，承諾受方必須給予承諾方一些有價值的東西作為交換。如果承諾受方沒有提供任何對價，合同可能不具有法律約束力。 **例如：甲（開條件的人）承諾若乙（promisee）付款給丙，甲將會出售物業予乙。** - Example: -------- X sells his book to Y, it does not matter if we regard the price of the book or the book itself as consideration ---------------------------------------------------------------------------------------------------------------- - consequence of the rule: a person who does not give consideration cannot, as a general rule, sue on a contract -------------------------------------------------------------------------------------------------------------- - any such person is described as a \'third party\' to the contract, and such person cannot enforce it even if it is made for his benefit --------------------------------------------------------------------------------------------------------------------------------------- - **this rule is called the privity contract rule** ------------------------------------------------- Privity contract rule合約相互關係法則 ------------------------------------- - **Privity contract rule: only the parties who are privy to a contract can sue or be sued on such contract** ----------------------------------------------------------------------------------------------------------- - **即使一份合約向第三方（並非訂約一方）授予利益，該第三方亦無權取得或強制執行該合約下的任何權利，他只能倚賴其中一名訂約方為他強制執行權利。很多時候，嚴格採用此法則會違反訂約方的意願，造成不公。** -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- - **Example:** A contract between A and B requires A to pay money to C**,** C is not a party to the contract and cannot enforce it -------------------------------------------------------------------------------------------------------------------------------- - **privity contract rule:** -------------------------- **party(ies) privy to the contract: \_\_\_**A and B**\_\_\_\_\_** ----------------------------------------------------------------- **part(ies) not privy to the contract: \_\_\_\_**B**\_\_\_\_\_\_** ------------------------------------------------------------------ **\_\_\_\_**A and B**\_\_\_\_\_\_can sue or be sued on such contract** ---------------------------------------------------------------------- **However, if A separately makes a promise to C that A will do something which A is already contractually bound with B to do, then the performing of the contract is consideration for the promise** ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- - A is already contractually bound with B to do something in favour of C ("Contract X") - A makes a promise to C that A will do the same thing in favour of C ("Contract Y") - C cannot enforce Contract X if B fails to perform Contract X - However, performing of Contract Y by C is consideration for the promise under Contract Y +-----------------------------------------------------------------------+ | 案例：New Zealand Shipping Co Ltd v Satterthwaite & Co Ltd (1974) | | | | - NZSC（新西蘭航運公司）與承運人簽訂合同，將貨物從英國運到新西蘭，並在到達港口卸貨。 | | | | | | - 承運人聘請了 Satterthwaite & Co Ltd (S) 作為獨立承包商來卸貨。 | | | | - 在卸貨過程中，貨物受損，S 主張根據 NZSC | | 提出的豁免責任的承諾（該承諾免除了承運人及其代理人和承包商的責任），他們不應對損壞負責。 | | | | | | - 法院判定，NZSC 的豁免承諾類似於對全世界做出的邀約，而 S | | 通過履行卸貨合同，與 NZSC 形成了契約，因此 S | | 有權依據該豁免承諾，儘管 S 本身對承運人有合同義務。 | | | | - 簡而言之，S 可以依賴 NZSC | | 的豁免承諾來免除責任，儘管他們與承運人之間有合同關係 | +-----------------------------------------------------------------------+ Contracts (Rights of Third Parties) Ordinance (Cap 623) - CRTPO came into force on 1 January 2016 - a third party may enforce a term of a contract if the contract expressly provides that such third party may do so or the term purports to confer a benefit on such third party - the third party must be identified in the contract by name, be member of a class of persons or answer a particular description (CRTPO, s.4) - the third party is entitled to the remedy that a party to the contract would have been entitled to (CRTPO, s.5) - this means that if the contract between X and Y identifies Z as a third party, Z may enforce the terms of the contract, and obtain damages in an action for breach of contract though Z was not a party to the contract and has not given any consideration for it Consideration Must Be Legal\ Example: an agreement to commit a robbery in consideration for a percentage of the stolen property will not be upheld by the courts 以被盜財產的一定比例為代價而實施搶劫的協議將不會得到法院的支持 **Consideration Must Be Something Value\ **- The promises made must have some value.\ - However, the amount of value is only the concern of the offeror and offeree\ - If X chooses to sell a valuable item for a price which is considerably less than its market price, that is X's choice\ - The courts will not help someone who subsequently realizes that the goods he has sold are worth more than he asked for （人話：你買得柒你嘅事，總知有value 就得喇，法庭係唔會理你賺定蝕嘅） Promise not to Sue 同意不起訴某人 --------------------------------- - **Forbearance to sue means agreeing not to sue someone** -------------------------------------------------------- - **Sufficient consideration though impossible to quantify** ---------------------------------------------------------- - **Example: if Y sues X for damages for defamation**匪磅**and X promises to pay Y \$10,000 if Y will drop the action, X\'s promise is given for good consideration and Y can sue to enforce the promise** -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- - **T**hough the amount of value is a matter to be decided by the parties to a contract, the consideration for their agreement must be real or sufficient 雙方同意的對價必須是真實或充分的 ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- - **I**f a person promises to carry out a duty which he is already bound to perform, in reality he is offering nothing of value and the consideration is not sufficient --------------------------------------------------------------------------------------------------------------------------------------------------------------------- 一個人承諾履行他已有的義務，他並沒有提供任何有價值的東西，**故**考慮是不充分的 ------------------------------------------------------------------------------ +-----------------------------------------------------------------------+ | 案例：Foakes v Beer (1884) HL | | | | - F 欠 B 一筆錢，B 獲得法院判決確認這筆債務。 | | | | - B 同意不再採取進一步行動，條件是 F | | 立即支付500英鎊，剩下的分期每半年支付150英鎊。 | | | | - F 履行了這個協議，但 B 後來要求支付判決債務的利息。 | | | | - 法院判定 B 有權要求360英鎊的累計利息，因為 F | | 沒有提供任何對價來支持 B 不採取進一步行動的承諾。 | | | | - 這個案例解釋了合同法中的對價原則，即為使承諾具有法律約束力，接受方必須提供對價。 | | | | F 未提供額外對價，因此 B 有權要求利息。 | +-----------------------------------------------------------------------+ +-----------------------------------------------------------------------+ | If A owes B \$1000\ | | B agrees to take \$700 and promise not to sue After taking the \$700 | | by B\ | | Does B has the right to sue? Yes | | | | New case: | | | | A owes B 1000\ | | B agrees to take 700 and promise not to sue in consideration of | | payment made three days earlier the due day\ | | After taking 700 by B, does b has the right to sue? | | | | No, early payment is valuable. EG B can pay 700 to someone else (tho | | we dun know) | | | | But the story is, B can use early payment to do further action, which | | is valuable | +-----------------------------------------------------------------------+ General rules: ============== - **agreement to accept lesser amount is not** binding 綁定 ========================================================= - **if the promise to accept a lesser amount is supported by** fresh consideration**, the parties will be bound by their agreement （要有額外嘅consideration）** ============================================================================================================================================================== Intention to Create a Legally Binding Contract 締結法律關係之意向 ================================================================= - **whether or not negotiating parties intended to create a binding agreement is approached objectively with regard to the nature of the underlying contract** ============================================================================================================================================================ - **contracts are divided into two categories:** ============================================== - **commercial** ============== - social/family ============= Commercial agreements --------------------- - presumed that the parties intended to make a legal binding contract if it is made in the course of a business 如果協議是在商業活動中達成的，則推定雙方有意達成具法律約束力的合同。 - presumption will not apply if their agreement expressly states that they have no such intention 如果協議明確表示雙方無意達成具法律效力的協議，則此推定不適用。 - phrase 'subject to [contract]' is used to ensure that whatever has been agreed is not binding until a formal contract is drawn up 使用這個短語表示即使雙方已達成一致，協議在正式合同簽訂之前不具約束力。 - if the parties act in a manner which is inconsistent with their agreement, they may not be entitled withdraw from the agreement, even though their agreement is 'subject to [contract]". 如果雙方的行為與協議內容不一致，即使協議上有"根據合同"的字樣，他們也可能無法撤回協議。 +-----------------------------------------------------------------------+ | 在 Attorney-General (HK) v Humphrey\'s Estate (Queen\'s Gardens) Ltd | | (1987) 案例中： | | | | - **談判階段**：香港政府與香港置地公司（HKL）進行了一系列談判，雙方原則上同意交換資產，但他們的協議是「**根據合同**」，也 | | 就是說，只有在正式合同簽訂後，才會有法律約束力。 | | | | - **政府的行為**：雖然政府已經接管並裝修了那些公寓，並且授權香港置地拆除舊建築，這些行動顯示政府相信合同即將生效。 | | | | | | - **HKL撤回**：但由於協議一直是「**根據合同**」，**HKL**在正式合同簽訂前有權利撤回，並終止政府對公寓的使用。 | | | | | | - **法院判決**：法院認為，雖然政府已經採取了一些行動，期待合同能生效，但由於協議明確標示為「根據合同」，這使得雙方在正式簽約前都 | | 有撤回的權利。因此，**HKL**有權退出。 | | | | 這個案例告訴我們，「**根據合同**」的條款意味着，雙方在正式合同未簽訂前都不受法律約束，並可以自由撤回協議 | +-----------------------------------------------------------------------+ Provisional or Preliminary Agreement 臨時合約 --------------------------------------------- - term \'subject to contract\' is different from a \'provisional agreement\' or a \'preliminary agreement'臨時合約 - they are commonly found in property transactions concluded at an estate agent\'s office - if they contain the full terms of the transaction agreed by the parties, they are **valid binding contracts** - they usually state that a formal contract will be made between the parties \'on or before\' a certain future date - the formal contract will then replace the earlier contract - both "provisional or a preliminary agreement" and "formal contract" are **valid binding agreements** Social Agreements ----------------- - presumed that social agreements or arrangements between friends or between close relatives are **unlikely** to legally binding - although such agreements are made with the intention that they will be carried out, it is not intended that a court action will be brought if they are not carried out - this means that they do not normally give rise to legally binding contracts - presumption will not apply if it can be shown from the circumstances that they did intend to be legally bound by their agreement +-----------------------------------------------------------------------+ | 在 Sun Er-jo v Lo Ching (1996) 案例中： | | | | - 孫太太（90歲）將所有積蓄交給她最小的兒子 Lo Ching（LK） 管理。 | | | | - 其中部分資金用於支付一套公寓的40%購房款（另60%由另一個兒子支付）。 | | | | | | - 四年後，孫太太要求 LK 歸還她的所有錢，LK 確實歸還了。 | | | | - 但孫太太還要求利息，並主張被投資且損失的資金應得到補償，同時也要求補償撫養 | | | | LK 的費用。 | | | | - 法院認為，撫養子女的費用不能成為索賠的依據，並且父母與子女之間的家庭安排通常不具法律約束力，除非明確表示有法律意圖。 | | | | | | - LK 誠實行事，沒有違反信託義務，因此孫太太的索賠失敗。 | | | | 這個案例解釋了家庭安排與法律關係的區別，通常家庭內部的安排（如父母和子女之間的金錢關係）不會被認為是具法律約束力的，除非雙方明確表達了進行 | | 法律契約的意圖。 | +-----------------------------------------------------------------------+ Capacity to Enter into a contract --------------------------------- - the law restricts the capacity of certain groups of people to enter into a contract either because of their age or because of their inability to appreciate their own actions - this means that people under the age of 18 and people who are mentally ill or intoxicated drugs or alcohol may not be legally bound by their promises Minor ----- - in contract law, a person under 18 years old is described as a minor - a minor has the capacity to enter into contracts and to enforce his rights against adults, but adults are restricted in enforcing contracts against minors 未成年人有能力訂立合同，並可以針對成年人行使自己的權利，但成年人在對未成年人執行合同方面會受到限制 - exceptions: a contract is enforceable against a minor if the contract between the minor and an adult is for necessary goods - Sale of Goods Ordinance (Cap 26): \'necessaries' are goods suitable for the minor\'s condition in life and to his requirements at the time of sale and delivery (s.4(2)) - expensive items may be necessaries, provided they are useful and appropriate for his social background and financial circumstances - but if the minor is already adequately 充分地supplied, the goods may not be necessaries - **if a minor fails to pay for necessary goods, he could be sued by the seller for the price** - Sale of Goods Ordinance (Cap 26) provides that a minor is bound only to pay a reasonable price for such goods (s.4(1)) - the Ordinance provides that if a guarantee is given in relation to a minor\'s obligation to a contract and that obligation is unenforceable (or the minor repudiates the contract), the guarantee remains enforceable against the guarantor (s.3) Mental disability ----------------- - A person who at the time of making a contract is suffering from a mental disability, whether caused by illness, drugs, or alcohol, will be able to avoid his liabilities if he can show that he did not understand what the contract was about, and the other person was aware of his disability +-----------------------------------------------------------------------+ | **案例：Treasure Spot Finance Co Ltd v Li Chik Ming (2007)** | | | | **李某是否有精神能力理解和簽署貸款協議：**李某有精神病史，聲稱自己無法理解借款文件的內容，但法院認為他其實能夠理解文件和其後果，因此他 | | 具備簽署合同的能力。 | | | | **貸款是否合法：**雖然李某有能力簽署貸款合同，但Treasure Spot Finance | | 公司的貸款協議違反了香港的《放債人條例》第18條，因為合同中沒有載明正確的利率。根據法律，這使得貸款合同是非法且無效的，無法被執行。 | | | | | | 簡而言之，這個案例解釋了即使借款人有精神能力簽署合同，但如果放貸人違反了相關法律，合同仍然會被視為無效。 | +-----------------------------------------------------------------------+ Terms of a contract ------------------- - Statements will be made during contract negotiation - Not all of them are terms of contract - They could be: - **Sales puffs 商業吹噓** 這類陳述通常是廣告或銷售過程中的誇大說法，並非具體承諾，也不具有法律約束力。例如「這是市場上最好的產品」 Cannot be proved to be true but the courts will look at the circumstances which the statement is made and the parties involved in order to determine whether it is a sales puff or whether it does in fact have some legal effect 無法證明其真實性，但法院會根據該聲明的具體情況和當事人來確定該聲明是否屬於推銷行為或是否確實具有一定的法律效力 - **Representations 陳述** 這些是合約談判中的事實性聲明，但不一定是合約的條款。如果這些陳述被證明是虛假的，可能會構成虛假陳述，導致賠償責任，但並不會像合約條款那樣直接影響合約的履行 A statement of fact which induces or persuades a person to enter into a contract 誘導或說服某人簽訂合約的事實陳述 If the representation proves to be untrue, it may constitute a misrepresentation and affect the validity of the contract 如該陳述被證明不真實，可能構成不實陳述並影響合約的有效性 - Terms of a contract can be expressed through writing, spoken words, or implied from actions or past dealings. 合約條款可以透過書面、口頭表達，也可以透過行為或過去的交易暗示。 - Signing a contract binds parties to all its terms, whether or not they have read it. 簽署合約後，雙方均須遵守其所有條款，無論他們是否已閱讀。 - Courts may ignore uncertain terms (e.g., vague phrases like \"standard terms apply\" without clear definition). 法院可能會忽略不確定的術語（例如，沒有明確定義的「適用標準條款」等模糊短語）。 - Written contracts are presumed to include all terms, meaning oral evidence typically can\'t change or add to the written terms. 書面合約被認為包含所有條款，這意味著口頭證據通常不能更改或添加書面條款。 - This follows the parol evidence rule, where oral evidence isn't used to modify a written contract. 這遵循口頭證據規則，即口頭證據不適用於修改書面合約。