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- Legislation and standards
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Last edited 13 Oct 2020
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- Bilateral contract: contains a set of promises that each party has made to the other (X promises to build Y a house and Y promises to pay X for doing it)
- Unilateral contract: only one party will make a promise to do something if the other party actually does something stipulated by the former (X promises to pay Y $100 if Y completes and returns a questionnaire)
- Under hand: evidenced in writing - liability limitation period six years.
- Under seal: deed - liability limitation period twelve years.
- Was there an intention of the partied to create legal relations?
- Was there an agreement between the parties?
- Was there a consideration?
- A promise made by the offer or which matures into a contract when accepted by the other party
- An 'invitation to treat' does not turn into a contract - it is merely a stage in negotiations, inviting the other party to make an offer
- The effect depends on the wording.
- Does not usually give rise to any contractual rights or obligations.
- It states that there will or may be a contract in the future, and hence is treated as indicating that there is no such contract at present.
- Where a court is prepared to interpret a letter of intent as creating a contract, it will then have to decide on its precise scope.
- Must be certain and unambiguous: can be by word (written or oral) or by conduct, which must be made known to the offeror.
- A counter-offer is not an acceptance as it varies the terms and destroys the original offer, which it rejects.
- The counter-offer itself will have to be accepted by the initial offeror.
 Retrospective acceptance
- Where a formal contract is not signed until after work has commenced, does the contract govern work which is done in the interim period?
- If the contract does not apply, the work will be paid for on a quantum meruit basis.
- Other rights and duties of the parties will be governed by whatever terms the court implies into the circumstance.
- A court may imply a term for retroactive effect of the contract.
- Terms implied by statute (Sale of goods and Services Act 1982: carry out the service with reasonable skill and care, within a reasonable time, if not fixed by contract, and for a reasonable charge, if not fixed by contract).
- Terms implied by custom.
- Terms implied by court.
 Performance and Breach
 The right to sue on partial performance
- A party must perform was they are contracted to do.
- Non-performance of some part will disentitle the partial performer to payment.
- Except when the party has 'substantially performed' their obligations whereby they are entitled to the contract sum subject only to a counter-claim for those parts remaining un-performed.
- Either incomplete performance gives the other party, who has so far performed their obligations as they fall due, a right to damages to put them in the position they would have been in had the contract been performed.
- Or they can hold themself absolved from any further performance of their obligations, when there is:
- Breach of contractual condition.
- Repudiatory breach (if the breach goes to the route of the contract).
- Renunciation (if one party does not intend to continue to perform).
- For there to be a contract, consideration must have been provided.
- Those who are privy to the consideration are said to be in privity of contract.
- A person who is not party to a contract cannot gain any benefit by suing on it, nor can they suffer any detriment by being sued on it.
- Has radically affected the doctrine of privity of contract.
- It grants a third party the right to enforce a term of a contract which has been made for their benefit.
- Not only positive rights but also defensive rights.
- The third party must be expressly identified in the contract.
- It does not grant the right to enforce the whole contract.
- Enforcement by the third party is subject to all other terms of the contract, therefore terms can be inserted to exclude any intention to create enforceable third party rights.
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