Legal Aspects 3

1
Legal Aspects 3

• CIPS Graduate Diploma
• Core Module
• Malcolm Harrison

2
Consideration

• Benefit to a party and a detriment to the other.
• You buy a DVD
• You - Benefit DVD detriment you pay
• Shop - Benefit your money lose of DVD

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Consideration

• Consideration must be sufficient without being
  adequate.
• Capable of assessment in financial terms.

4
Terms of a contract

• Conditions
• Warranties
• Innominate

5
Terms of a Contract

• may be
• Implied Sale of Goods Act
• Express specifically communicated by offeror.

6
Condition

• Fundamental part of the agreement
• Breach gives injured party right to freedom from
  further contractual duties and claim
  compensation.
• Poussard V Spiers and Pond 1876

7
Warranty

• A subsidiary obligation in the agreement.
• Breach does not give the right to terminate the
  contract. Only damages available.
• Bettini V Gye 1876

8
Terms

• Exemption clause
• Limiting liability
• ROT - Romalpa, Peachdart
• Force Majeure
• LD

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Unfair Contract Terms Act 1977

• St Albans city and District Council V Int.
  Computer Ltd 1996
• Exclusion Clauses.

10
Void and Unenforceable Contracts

• Vitiating Factors
• Misrepresentation.
• Mistake in contract.
• Duress and undue influence.
• Void, voidable and illegal contracts.

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Misrepresentation

• A statement
• of fact
• which is false
• made by one contracting party
• and which induced the contract.
• Nottingham Patent Brick V Butler 1886

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Exercises

• Gordon V Sellico 1986 deliberately concealed
  dry rot.
• Bisset V Wilkinson 1927 field could carry 2k
  sheep if farmed.

13
Fraudulent Misrepresentation

• If M. knows it is untrue.
• Sue in tort of negligence and / or
• obtain damages and / or
• rescind the contract.

14
Negligent Misrepresentation

• Prof. Man not checking facts.
• Rescission of Contract and damages.
• Misrepresentation Act 1967

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Innocent Misrepresentation

• Rescission of Contract
• Or Damages in lieu of rescission

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In practice

• Rescission is equitable remedy. Restores the
  parties to their pre-contractual position.
• You give me my money back and you get your DVD.

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Mistakes

• Common mistakes
• Mutual mistakes
• Unilateral mistakes

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Common Mistake

• Both parties have made the same mistake
• Couturier V Hastie 1852
• Goods destroyed in the course of voyage.

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Mutual mistake

• Both parties operate under different
  misapprehension
• Rafles v Wichelaus 1864
• HMS Peerles
• Contract void.

20
Unilateral mistake

• One party is mistaken
• Rogue
• Voidable contract

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Duress

• Contract is voidable.
• Atlas Express v Kafco 1989
• Economic duress

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Undue influence

• Stronger mind
• Rescission of the contract

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Consequences

• Void
• Voidable
• Illegal

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Void Contract

• A contract which has no legal force from the
  moment of making.
• Restrictive Practises

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Voidable Contracts

• A contract which is valid when made, but . may
  be effected by rescission
• E.g. misrepresentation

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Illegal contracts

• Are void
• To commit a crime

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Discharge of a Contract

• Performance
• Agreement
• Frustration
• Breach

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Performance

• Normal way
• Quantum meruit

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Agreement

• Must be bi-lateral mutual exchange of promises
• One party provides consideration to be released
  from obligations

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Frustration

• Permits a party to a contract to be excused.
• Taylor v Caldwell 1963
• Music hall burnt
• Krell v Henry 1903
• Coronation cancelled

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Frustration

• Money repaid
• Expenses deducted
• Benefits received paid for

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Force Majeur Clause

• Events outside control of a party war

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Breach

• Fails to perform
• States they will not perform
• Performs in a defective manner
• Condition or Warranty?

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Remedy for Breach

• Damages
• Putting the injured party into the position he
  would have been in
• Liquidated Damages a genuine pre-estimate of
  loss for breach of contract

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Remedy for Breach

• Quantum meruit
• BSC v Cleveland Bridge and Eng Co
• Specific Performance court instruction to carry
  out obligation if damages not adequate
• Injunction enforcing a party to do or not do
  something.

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Law of Contract

• Source of Law
• Forming a Contract
• Terms
• Void Contracts
• Discharge of a Contract
• Remedies for Breach

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Law Test

• Contract Law