Traditional Approach to Interpretation Traditionally, all contracts were interpreted in the same manner. Commercial and consumer contracts were subject to the same broad principles. The traditional approach emphasises the plain meaning. In the absence of ambiguity or something pointing to the contrary, effect is to be given to the plain meaning. Under this approach, background evidence is not permitted to […]
Classification of terms The obligations in a contract may vary in importance. Some clauses / terms are regarded as more fundamental or important than others. Contract law distinguishes between terms that are essential to the agreement and those that are less fundamental. A distinction is sometimes made between warranties and conditions. Breach of a condition entitles the innocent party to […]
Contract Obligations Presumed Absolute The general principle is that a person is unconditionally obliged to perform his contractual obligations. It is not simply a question of using best endeavours to do so. It is presumed that contracts provide for unconditional obligations. There is nothing inconsistent with the existence of a contract that a party undertakes something that is very difficult […]
Tender of Performance Generally, a contractual obligation must be performed without performance being demanded. A debtor must seek out his creditor, if necessary, in order to pay. This position may be varied by the terms of the contract, custom, or statute. If one party offers to perform or unsuccessfully attempts but is unable to do so, there is a tender […]
Order of Performance I Some obligations are pre-conditional on the other party first performing his obligation under the contract. They or some of them, in turn, may depend on the first performance of some element of his obligations. The order of performance may be a critical issue. Where one party must perform first, then upon his refusal, the other party may […]
Description I The Sale of Goods Act provides that a description applicable to goods is a contract condition. Therefore, its breach entitles the other party to terminate the contract and recover damages. The description identifies the goods as such. Generally, statements in relation to the quality of the goods are covered by the implied statutory conditions as to quality rather […]
Nature of Frustration The principle of frustration applies where a contract is entered to perform something which later becomes impossible or wholly meaningless. This must occur without the fault of either party. The event must be unexpected. If one party anticipated or should have anticipated the possibility of the risk/event, and did not incorporate a term to protect itself, frustration […]
Contracts Affect Parties / Privity The general principle is that a person who is not a party to a contract is not entitled to its benefit. This means that he may not enforce it. If A promises B to give something to C, for which B undertakes something in return, C has no right to enforce the agreement. Only A […]
Assignment of Contract Rights A person cannot assign or off load his contractual obligations. He may be entitled to sub-contract his obligations, depending on the terms and type of contract involved. A party to a contract may be able to assign or transfer certain rights such as money receivable, under it. The assignee cannot be in any better position than […]
Minors A minor is a person under 18 years of age. In older legislation, they were often referred to as “infants”. The age of majority was reduced from 21 years to 18 years by the Age of Majority Act, 1985. Certain types of contracts are binding on a minor. Others may be repudiated. Others are absolutely void and of no […]
Persons Lacking Capacity Not every person has the capacity to bind himself to a contract. Certain categories of vulnerable persons have privileges and immunities from contractual liability. The purpose in each case is to protect persons who are presumed to be unable to look after their affairs, because of age, mental condition or other vulnerability. Historically, married women were subject […]
Invalidation by Mistake The law seeks to uphold bargains. It does not readily allow a party to a contract to avoid legal obligations, on the basis of some mistaken private assumption. A limited category of mistake only will avoid a contract. If an objective person looking at the circumstances of an agreement would think that each party has agreed to […]
Most Mistakes do not Negate Contract The law limits the types of mistake, on the basis of which a contract might be avoided. A mistake in the everyday sense will not usually be sufficient to avoid a contract. The fact that a contract proves highly unprofitable, foolish and illogical with the benefit of hindsight or even at the time, is […]
Relief for Mistake at Common Law I At common law, rescission is automatic and the contract is void. Restitution may apply in order to reset the pre-contract position. The equitable remedy is more tailored to the injustice, so that a court order is more likely to be required. A party to a contract the subject of an operative mistake may […]
Overview A contract may be negated by the misrepresentation of one party. A misrepresentation is a statement which is untrue, which induces a party to enter a contract. Errors and in some circumstances, omissions, may amount to a misrepresentation. A representation may arise by conduct. A representation may become part of the contract. The breach may be either a breach of condition […]
Overview of Recourse A misrepresentation (deliberate, negligent or innocent) generally gives the right to the innocent party to cancel the contract. In some circumstances, there may also be a right of compensation, as set out below. In the case of a sale of goods or supply of services, damages (compensation) may be awarded for the loss caused by a careless […]
No General Duty to Disclose If one party to a contract makes a statement of fact or intent on which the other party relies to his detriment in entering the contract, then the contract may be set-aside or there may be a right of compensation. The misstatement or misrepresentation need not be intentional. It may range from being deliberate, to […]
Negating Contracts by Pressure and Influence An agreement to which consent is not freely given may be invalid. However, the categories of pressure which will invalidate an agreement are limited. Agreements are frequently entered under economic and personal pressure. Such ordinary pressures will not avoid a contract. There are a number of circumstances in which agreements may potentially be invalidated […]
Negating Contracts by Pressure and Influence An “agreement” to which consent is not freely given may be invalid. However, the categories of pressure which invalidate an agreement are limited. Agreements are frequently entered under economic and personal pressure. Such ordinary pressures will not avoid a contract. There are a number of circumstances in which agreements may potentially be invalidated by […]
Negating Contracts by Pressure and Influence An agreement to which consent is not freely given may be invalid. However, the categories of pressure which will invalidate an agreement are limited. Agreements are frequently entered under economic and personal pressure. Such ordinary pressures will not avoid a contract. There are a number of circumstances in which agreements may potentially be invalidated […]