Legally binding agreement between two or more parties. Creates and defines obligations. Obligations bind the parties to an agreement. Based on the principle of consent.
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Theme of objectivity
Difference between what the parties actually believed (a subjective test) and what the reasonable man would conclude (an objective test).
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Self-regulatory nature of contract law and it's key issue
Courts intervene following an alleged breach of contract, but the parties are generally free to regulate their own agreement. Inequality of bargaining power - key issue e.g. small supplier v supermarket.
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"Freedom of contract" explained
Classical theory of CL. Parties are free to contract with whomever they like, on whatever terms they wish, and court will be reluctant to interfere with this agreement.
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Elements of the classical theory of contract
1) Based on a mutual exchange of promises and obligations. Courts will enforce an agreement as both parties have contributed. 2) Freedom of contract. 3) These parties could agree any terms they wished.
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Issues with the classical theory of contract
1) Unilateral contracts are not founded on a mutual exchange of promises. But, a bilateral contract places obligations on both parties. 2) Assumption that a party would never agree to terms that were unfavourable limits the role of FofC in modern CL.
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Define deeds
Formalities must be met, and this is the reason why it will bind the parties (but no requirement of 'consideration').
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Define "Simple Contracts"
Not contained in deed, must be supported by consideration.
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Define bilateral contracts
Both parties have obligations under the contract, mutual exchange of obligations/ promises.
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Define unilateral contracts
Binding on one party, only one party has obligations following the performance of the act.
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Example of a bilateral contract
Contract to buy and sell goods: seller promises to sell in exchange for customer's promise to pay.
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Example of a unilateral contract
£1000 reward to person who finds lost dog - no legal obligation other than party who advertises.
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Formation of a contract
A) Offer and acceptance = agreement. B) Consideration = test of enforceability. C) Intention to create legal relations = binding contract.
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Other cards in this set
Card 2
Front
Difference between what the parties actually believed (a subjective test) and what the reasonable man would conclude (an objective test).
Back
Theme of objectivity
Card 3
Front
Courts intervene following an alleged breach of contract, but the parties are generally free to regulate their own agreement. Inequality of bargaining power - key issue e.g. small supplier v supermarket.
Back
Card 4
Front
Classical theory of CL. Parties are free to contract with whomever they like, on whatever terms they wish, and court will be reluctant to interfere with this agreement.
Back
Card 5
Front
1) Based on a mutual exchange of promises and obligations. Courts will enforce an agreement as both parties have contributed. 2) Freedom of contract. 3) These parties could agree any terms they wished.
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