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- procedural requiement: signed, sealed and delivered
- consideration is not a necessary element
- must use for leases of more than 3 years and transfer of land/flats
elements of formation ofa valid contract
offer, acceptance, consideration and intention to create legal relation
offer cease to be effective when..
- the time expires
- offer properly withdrawn
- no time is stated, after a reasonable time
- a counter-offer is made
- upon the death of one party before acceptance
- must be unconditional and conform exactly with the terms of the contract
- must be made in the manner prescibed in the terms of the offer, otherwise follow the way in whichthe offer is made
- if the offer is made to a specific person, the offer can only be accepted by that person
- postal rule: A contract is concluded immediately the letter is posted, notwithstanding that is delayed in the post and even though it is destroyed and never reaches the offeror
rules about consideration
- consideration must be given on or before the end of contract
- Consideration needs not be adequate, it can be less than the market value
- no mutual benefit(consideration)-no contract: use deed under seal or $1 as consideration
rules about intention to enter legal relationship
- An agreement is a contract only if both parties intended it to have legal consequences.
- Presumption for commercial agreements:The parties intended legal consequences
- Presumption for social and domestic agreements: no intention to enter legal relationship unless under separation/divorce proceedings, or rebutted by contrary evidence, eg. Signing a contract/deed and witness
- employment contract eg. Duty of loyalty(serve in the best interests of employer), avoid any conflict of interest
- Sale of Goods Ordinance-goods of merchantable quality, goods must correspond with the description, sale by sample
- trade practices-implied by court
Privity of contract rules
Contract terms can only bind the contracting parties
- Non Est Factum
- economic duress
- undue influence
Non Est Factum rules - The mistaken party must prove that
- his signature was induced by fraud(mislead/deception)
- the document was fundamentally different from that thought to be signed(thought she was signing a lease but turned out to be a deed), and
- he did not act negligently(not a result of her carelessness)
duress rules - The plaintiff party must prove that
- coersion - actual/threatened violence, unlawful restraint/threat
- Totally deprive any practical choice
economic duress rules - The plaintiff party must prove that
- unreasonable commercial pressure
- no practical alternative
undue influence rules - The plaintiff party must prove that
- the defendant had the capacity to influence the plaintiff
- influence exerted
- resulted in the plaintiff entering into the contract
doctorine of resulting trust and constructive trust: Husband and wife each contribute half of purchase price of the property, suppose only the husband’s name appear in the deed, the wife may be entitled to ... and rely on... in court, the husband may argue that the wife ... , the wife may not get the title; besides purchasing the properties, the wife may also contribute for household expenses, decoration fees and rely on the ...It’s quite risky to rely on the doctrine because of ...
- equitable title; resulting trust
- contribute the money as a gift; didn’t have the intention to share the title
- doctrine of constructive trust
- uncertainty; the result is at the discretion of the court
Corporate capacity: because a company is a ...; the director (authorized agent) will enter into the contract for the company; to protect themselves, at the end of the contract there should be a statement saying ...; they should also ...
- separate legal entity
- the director is an authorized agent signing the contract for and on behalf of the company
- put the company seal beside the signature
A lend money to B with loan agreement, later on A worry that B cannot repay the money and ask B’s dad to sign a guarantee; the guarantee may not be valid because ...
money has already been lent to B before dad signed the guarantee, therefore the guarantee was not supported by fresh consideration.
Suppose the husband has a loan and wants the wife to be guarantor. The wife cannot rely on undue influence to avoid the legal responsibility If ...
the bank staff approach the wife to sign guarantor agreement, instead of the husband approaching the wife and the bank staff also inform the wife of legal implication of the agreement