Basic Outline of Contract Law PDF

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Cliffnotes Contract Law The University of Hong Kong Contract Law Cliffnotes The University of Hong Kong Contents Page Introduction to Contract ................................................................................ The Process....................................................................

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Cliffnotes Contract Law The University of Hong Kong

Contract Law Cliffnotes

The University of Hong Kong

Contents Page Introduction to Contract .................................................................................10 The Process.............................................................................................................................10 Formation of an Agreement................................................................................................11 Bilateral Contracts – 2 promisors ...................................................................................................11 Unilateral Contracts – 1 promisor ..................................................................................................11 ‘Offer’..................................................................................................................................................11 ‘Acceptance’ .......................................................................................................................................11 Cross Offers.......................................................................................................................................11

Offers and Invitations to Treat...........................................................................................12 Bilateral contracts ..............................................................................................................................12 Unilateral contracts ...........................................................................................................................12

Difficult unilateral contracts................................................................................................13 Revocation..........................................................................................................................................13

Offers in Bilateral Contracts................................................................................................13 Acceptance in Bilateral Contracts ......................................................................................13 When acceptance takes effect .........................................................................................................13 The Postal Rule .................................................................................................................................14 Instantaneous Communications .....................................................................................................14 Method of Acceptance .....................................................................................................................14

Duration of an Offer.............................................................................................................15 Withdrawal .........................................................................................................................................15 Death...................................................................................................................................................16

Finality, Completeness....................................................................................16 Completing the Terms..........................................................................................................16 Limitations..........................................................................................................................................17

Date of Completion ..............................................................................................................17 Negotiation..............................................................................................................................17 “Subject to Contract”............................................................................................................17 Provisional Agreements........................................................................................................17 Intention to create legal relations....................................................................18 Domestic and Commercial Agreements...........................................................................18 Domestic/Social Agreements .........................................................................................................18 Commercial Agreements..................................................................................................................18

Consideration..................................................................................................19 Definition: ...............................................................................................................................19 Types of Consideration ........................................................................................................20

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Contract Law Cliffnotes

The University of Hong Kong

Executory Consideration .................................................................................................................20 Executed Consideration ...................................................................................................................20

Motive ......................................................................................................................................20 Consideration must move from the promisee.................................................................20 Past Consideration.................................................................................................................20 Exceptions..........................................................................................................................................21

Adequacy and Sufficiency ....................................................................................................21 Forbearance........................................................................................................................................21

Performance of Legal Duty .................................................................................................22 Existing Contractual Duty ...................................................................................................22 Existing Contractual Duty Owed to a Third Party.........................................................23 Part Payment of a Debt........................................................................................................24 Exceptions..........................................................................................................................................24

Promissory Estoppel – Equitable Remedy.......................................................................24 Limitations..........................................................................................................................................25

Privity of Contract .................................................................................................................25 Privity and Consideration ................................................................................................................25 Criticisms of Privity ..........................................................................................................................25 Avoiding the Doctrine of Privity ....................................................................................................26 Where Privity Ceases to Apply .......................................................................................................26

Representations and Terms of Contract......................................................... 27 Definitions...............................................................................................................................27 Types of Terms..................................................................................................................................27

From Representation to Term ............................................................................................27 Factors affecting objectivity ............................................................................................................28

On ‘expertise’..........................................................................................................................28 Animal Cases...........................................................................................................................29 The Parol Evidence Rule......................................................................................................29 Exceptions to the rule ......................................................................................................................29

Defining ‘collateral’................................................................................................................29 Proving a Collateral Warranty .............................................................................................30 Third Parties............................................................................................................................30 Conclusions.............................................................................................................................30 Implied Terms ................................................................................................31 Tests Used by the Courts.....................................................................................................31 Implied by Custom ...........................................................................................................................31 Implied by Business Efficacy ..........................................................................................................31 Implied by the ‘Officious Bystander’ .............................................................................................31 Combination of Tests.......................................................................................................................31

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Contract Law Cliffnotes

The University of Hong Kong

Implied by the Law................................................................................................................32 Sale of Goods Ordinance SOGO, Cap26.....................................................................................32 Supply of Services (Implied Terms) Ordinance SOSO, Cap457...............................................32

Nature and Effect of Terms ........................................................................... 33 Contingent Conditions .........................................................................................................33 Classifying Terms...................................................................................................................33 Labelling of Terms............................................................................................................................33 Condition............................................................................................................................................34 Warranty .............................................................................................................................................34 Innominate Terms ............................................................................................................................34

Misrepresentation .......................................................................................... 35 Elements for Actionable Misrepresentation ....................................................................35 Types of Misrepresentation.................................................................................................37 Fraudulent Misrepresentation .........................................................................................................37 Negligent Misrepresentation ...........................................................................................................38 Innocent Misrepresentation.............................................................................................................38

Remedies..................................................................................................................................38 Rescission ...........................................................................................................................................38 Damages .............................................................................................................................................40 Indemnity ...........................................................................................................................................42 The Misrepresentation Ordinance –MO- .....................................................................................42

Exclusion of liability for Misrepresentation.....................................................................43 Duress and Undue Influence ......................................................................... 43 Duress ......................................................................................................................................43 Duress of the Person ........................................................................................................................43 Duress of Goods...............................................................................................................................43 Economic Duress..............................................................................................................................44 Proving Duress..................................................................................................................................45 Duress and Commercial Pressure...................................................................................................45

Undue Influence ....................................................................................................................45 Class 1 | Actual Undue Influence ..................................................................................................46 Class 2A | Presumed (Undue*) Influence ....................................................................................46 Class 2B | Presumed (Undue*) Influence ....................................................................................47 The effect of ETRIDGE on existing law.........................................................................................49 Manifest disadvantage ......................................................................................................................50 Undue Influence and 3rd Parties .....................................................................................................50 Remedies for Undue Influence .......................................................................................................52

Unconscionable Bargains.....................................................................................................53 Mistake .......................................................................................................... 55 Introduction............................................................................................................................55

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The University of Hong Kong

Common Mistake ..................................................................................................................55 (A) Res Extincta ................................................................................................................................55 (B) Res Sua .........................................................................................................................................56 (C) Mistake as to Quality..................................................................................................................56 Remedies.............................................................................................................................................57

Mutual Mistake .......................................................................................................................57 Where Parties are at Cross Purposes (meant different things) ..................................................57 Remedy ...............................................................................................................................................58

Unilateral Mistake ..................................................................................................................58 (A) Mistake as to Terms of the Contract.......................................................................................58 (B) Mistake as to Identity.................................................................................................................59 (C) Mistake as to Documents | Non est factum: ........................................................................61

When does mistake occur? ..................................................................................................62 Why is ‘mistake’ a plea of last resort?................................................................................63 Allocation of Risk..................................................................................................................63 Express terms and implied terms and caveat emptor. ................................................................63

Equity in Mistake ...................................................................................................................64 What is the position in Hong Kong as per common law and equity?........................65 What are the legal consequences of operative mistake? ................................................65 How does mistake relate to other areas of contract law?..............................................65 Frustration ..................................................................................................... 66 Discharge by Frustration......................................................................................................66 Force Majeure Clauses......................................................................................................................66 Hardship Clauses...............................................................................................................................66 Intervener Clauses.............................................................................................................................66

The Doctrine...........................................................................................................................67 Subject Matter Destroyed ................................................................................................................67 Subject Matter Unavailable..............................................................................................................67 Stated Method of Performance Impossible..................................................................................68 Commercial Purpose Fails ...............................................................................................................68 Government Interference ................................................................................................................68 Supe...