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33 Cards in this Set
- Front
- Back
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What is the definition of contract?
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A contract is an agreement between two or more persons that the law will enforce.
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What is common law?
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Common law, also known as case law or precedent, is developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action.
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What is common law is also know as?
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Case law, or precedent.
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Where is the best website to obtain information about Australian law?
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Aus - Lee
http://www.austlii.edu.au |
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What does precident mean?
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In cases where the parties disagree on what the law is, an idealized common law court looks to past precedential decisions of relevant courts. If a similar dispute has been resolved in the past, the court is bound to follow the reasoning used in the prior decision. If, however, the court finds that the current dispute is fundamentally distinct from all previous cases, judges have the authority and duty to make law by creating precedent. Thereafter, the new decision becomes precedent, and will bind future courts.
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What is the purpose of a contract?
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The purpose of a contract is to document each party’s obligation and to allocate and minimize each party’s risks during the performance of the agreement.
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What is freedom of contract?
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Parties should be allowed to contract on whatever basis they choose.
This is known as the doctrine of freedom of contract. |
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What is the major drawback to using standard contracts?
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The use of these standard form contracts reduces the right of the individuals to negotiate freely. It is often the case that companies with strong bargaining power are not prepared to alter any of the terms to suit different individuals they contract with. Attitude is ‘take it or leave it’.
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What are the advantages to using standard contracts?
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- Consistant
- Quick and efficient - Certainty of terms - Cheaper - Tested in courts There are a number of advantages of using a standard contract including increased certainty in meaning of contract terms. Some of the clauses of these contracts have been considered judicially in published case law and as such it has already been given a legal determination of the meaning of the words so does not cast as much doubt as would something that is totally new for example i.e. been tried and tested rather than have to sit with your legal team for a long time to be reviewed. |
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What are lump-sum contracts?
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This form of contract tends to be the simplest form of contract. The price for carrying out the work is fixed prior to the start of the contract. In this type of contract the price covers all costs, overheads, risk contingencies and profit.
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What is the major benefit of a lump-sum contract?
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Final price is known up front.
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What is the major disadvantage of a lump-sum contracts?
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The complete scope must be know before the contact can be signed.
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What are schedule contracts?
(schedule of rates) |
Where work is performed by the contractor based on the prices for labour, materials and plant are shown as part of the tender.
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What is the main disadvantage of a schedule of rates contract?
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The main disadvantage of schedule of rates contract is that the total cost of a project is unknown until the work is complete.
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What is the difference between a JV and and Alliance?
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A JV typically does not have the client in the contracting team.
JVs also tend to be created as seperate companies. |
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What are cost plus contracts?
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Typically used where the extent of the work is unknown and risk is high. Lopsided risk allocation – owner puts itself in the contractor’s hands. Particularly problematic for owner if contractor’s fee is a % of total cost – no incentive to keep costs down. Pay vendor for costs plus a fee.
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What are design and construct contracts?
(D&C) |
Also known as turnkey method. The contractor is responsible for both design and construction. The contractor may have the capacity to do both design and construction or it may be a joint venture made up of construction contractor and a design firm.
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What are construction management contracts?
(D&C) |
Is a method whereby there are three parties namely, principal, design consultant and construction manager.
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What is a project alliance?
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A project alliance, risks and responsibilities are shared and managed collectively, rather than individually. The relationship created within an alliance is one of mutual trust, the only way to serve the interest of any one party is to advance the interests of the alliance so everything is out in the open and there are no hidden agendas.
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What are the two clasifications, or types of contracts
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- Simple; and
- Formal. |
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What are the two types of formal contracts?
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- Deed; and
- Contracts of records. |
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What is a deed?
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A document that is signed sealed and delivered by the party making it witnessed by an adult person.
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What is a contract of record?
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An agreement approved by a court i.e. Property settlement in divorce proceedings.
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Can a simple contract be entered in to orally?
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A simple or informal contract can be entered into orally and/or in writing. In some instances, statute (law passed by parliament) may require that the contract be evidenced in writing to be enforceable.
Contracts can be oral, in writing, or a combination of these 2 forms. |
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Do formal contracts require consideration?
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No
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Are formal contracts necessarily a result of an agreement?
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No. It may just be a solemn promise to the community that you intend to do what you have promised.
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Can a simple contract be a formal contract?
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No, if it is not a formal contract, it must be a simple contract. It can not be both
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Is consideration required for a simple contract?
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Yes, consideration must be present.
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What is a deed?
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A deed is a formal contract of agreement entered in to by 2 parties.
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Can a formal contract be oral?
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No, a formal contract must be written and handled in a certain way.
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What is a unilateral contract?
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A unilateral contract is one in which only one party has obligations to perform at the time of its formation.
In Mobil Oil Australia v Lyndel Nominees Pty Ltd (1998): ‘A unilateral contract is one in which the act of acceptance of the offer is also executed consideration for the promise offered. The act of acceptance called by the offeree, leaves the contract executory only on the part of the offeror.’ |
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What is a bilateral contract?
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A bilateral contract is one in which both parties to it have obligations to perform at the time it comes into existence. It is
constituted by an exchange of promises between the parties. In Union Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968], Lord Diplock observed that in a bilateral contract: ‘each party undertakes to the other party to do or to refrain from doing something, and in the event of his failure to perform his undertaking, the law provides the other party with a remedy’. |
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What are the basic requirements to form an enforcable contract?
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- Is there a requirement of writing?
- Intention to create a binding agreement; - Capacity to create a legally binding agreement; - Offer by one party and an acceptance; - Certainty of terms; and - Consideration. |
