Law of contract

Study notes

Contract law supplies the machinery for every OTP, tenancy agreement and sale-and-purchase contract. The exam tests formation, the vitiating factors that make a contract voidable, and the remedies when things go wrong.

What you must know

• Formation needs offer, acceptance, intention to create legal relations, and consideration — consideration must exist but need not be adequate.
• Advertisements and price displays are generally invitations to treat, not offers; the customer makes the offer.
• A counter-offer destroys the original offer; acceptance must mirror the offer, and silence is not acceptance.
• An option (like an OTP) is a binding promise to keep an offer open for a fixed period — exercising it within time is acceptance.
• Misrepresentation (fraudulent, negligent, or innocent) makes the contract voidable; fraudulent misrepresentation also sounds in damages.
• Terms differ in weight: breach of a condition allows repudiation, breach of a warranty only damages; innominate terms are judged by the breach’s seriousness.
• Discharge by performance, agreement, frustration, or breach; remedies include damages, specific performance and injunctions.