1
Q
onus
A
burden
2
Q
Unilateral contract
A
- offer made to whole world
- acceptance via action/refraining to make some action otherwise taken (exchange of promise for an act)
- only one party bound by the contract
-Offeree’s act fulfills consideration
3
Q
Bilateral contract
A
- offer made to a specific person or people
- Exchange of promises as consideration
-Both parties bound at the outset
4
Q
offer
A
- clear and unambiguous statement of conditions on which the offeror is willing to contract with offeree if they accept
-willingness to enter into contract on certain terms
5
Q
Objective approach to contracts
A
- reasonable bystander
- actions and words over intentions
- courts do not read minds
6
Q
What is the difference between offer and invitation to treat?
A
- Offer: A clear, definite, and binding proposal made with the intention to be bound once accepted.
- Invitation to treat: An invitation for others to make an offer. It is not binding.
- Difference: intention to create bindong relationship
7
Q
Why is the difference between offer and invitation to treat?
A
- limited stock of product
- creativity of advertisement (Leonard v PepsiCo)
- insisting on buying what shopper picker up
- Ensures contracts are formed only when both parties clearly agree to the terms.
8
Q
invitation to treat
A
- statement without intention to create a contract - invites negotiations and offers
- advertisement, display in shop windows
9
Q
contract
A
- legally enforceable agreement between two parties- guarantees rights and obligations
- exchange of promises
- offer- acceptance- consideration
10
Q
What is exception to ads being invitation to treat?
A
Lefkowitz
- clear, unambiguous and explicit - leaves nothing to negotiation
11
Q
Termination of an offer
A
- once accepted can not be terminated, any time before it can
1. Rejection/ Counter- offer
2. Death of the offeror
3. Revocation - any time prior acceptance - no need to explain but needs to be communicated (explicit or implicit)
4. Lapse of time
5. Failure of precondition
12
Q
Postal rule
A
- acceptance valid since and where it was posted
- revocation valid since received
- rationale: one accepting should have certainty
- does not apply in certain circumstances:
- when expressly excluded acceptance by post
- offeror stipulated another mode of delivery to be used/ or another mode of acceptance
- not properly addressed or posted
- contrary to prescribed method of acceptance
13
Q
Acceptance
A
- final and clear expression of agreement with the terms of the contract
- once acceptance is communicated, it concludes the formation of contract (no revocation after)
- if prescribed to be accepted in particular manner, it needs to follow this
- counter offer diminishes the original offer - request for info is fine
- only accepted by a person to who it is made
14
Q
Methods of acceptance
A
- must be unconditional: precisely same terms as the offer - if the terms of the offer and terms of apparent acceptance differ- it is considered counter-offer
- can not occur just in mind- needs to be communicated (by words or conduct)
15
Q
Battle of forms
A
- negotiations- last shot doctrine
- offer made last before agreement is reached is the official one
16
Q
Silence as acceptance
A
- silence can not denote acceptance
- 3 Exceptions to that:
- if parties agree that silence will be interpreted as consent
- past dealings of the parties suggest silence will constitute acceptance
- implied contract for service- service that can not be taken back
- no inertia selling
17
Q
Can you accept without knowing about the offer?
A
Offer can not be accepted in ignorance of the offer but motive is irrelevant
18
Q
Acceptance must be communicated exceptions
A
- Acceptance must be communicated
- exceptions:
- unilateral offer - performance constitutes acceptance- when act completely performed
- offeror´s own fault- did not read the acceptance letter
- where offer permits acceptance without communication - offeror states themselves that acceptance does not need to be communicated
- exceptions:
19
Q
Two key intention presumptions
A
- family, social or domestic relationship= no intention to create legal relationship
- commercial nature= there is intention to create legal relationship
20
Q
honorable pledge clause
A
no intention to create legal relations- excludes contract to be legally binding
21
Q
letters of comfort
A
designed to reassure its recipient regarding certain matters without subjecting themselves to a contractual liability - even if words letter of comfort used it can be deemed binding in certain circumstances
22
Q
Subject to contract
A
the agreement including that clause generally will not attract legal relations - statement that the parties wish to further negotiate before including it in a legally binding contract
23
Q
is intention additional criteria?
A
connected to certainty
not additional
just creates higher burden to prove otherwise in familial/business setting
24
Q
Consideration
A
- (price for the promise) something of value given or foregone in exchange for the promise
- money, service, promise etc. - some sort of detriment or loss
- promisee giving something in exchange - notion of contract including exchange (something in return for the promise)
- exception deeds under seal - no consideration yet legally binding LS- not usual
25
Pinnel´s rule
- Part payment of a debt
- not good enough consideration to forego the remainder of the debt unless something new is given in consideration of that agreement
- 3 exceptions: introduction of new element, acceptance by a creditor of a third party in full satisfaction of debt, composition with creditors
26
Consideration rules
- Consideration must not be past
- Consideration must not be doing something someone is already required to do by law
- Consideration must move from the promisee
- can not be provided by a third party
- Consideration need to not move to the promisor
- Consideration must have tangible value
- objective or tangible value: **sufficient without being adequate**, free market- courts will not assess what is fair
- no sham payment
27
pros and cons of Pinnel´s rule
Pros
- bargaining power
-consistency with law
- certainty
- avoids creditors being coerced to worse deals
Cons
- ignores practicality
-harsh on debtors
- incompatible with commercial flexibility
28
Past consideration
-not sufficient
-in certain cases past consideration must be sufficient if an action is made on the request of promisor and compensation was anticipated for the service given
29
three types of contracts with infants with examples
- Void ab initio - never has been legally binding
- Infant Relief Act 1874 - contract to repay money lent & contract for goods supplied to minor
- Voidable - valid until voided - once voided, perceived as void from start
- contract of employment or apprenticeship or service - voidable unless on balance of probabilities more beneficial to minor
- invalid: *Keays v Great Southern Railway*
- valid: *Chaplin v Frewin - memoirs*
- contracts involving recurring obligations
- Valid
- Contracts for necessaries - onus on producer to prove it is a necessity - only required to pay a reasonable price
- *Skrine v Gordon:* horse not a necessity
- *Nash v Inman:* luxury waistcoats - oxford student -already had enough waistcoats
30
Contracts with infants deemed void and under which Act
Infants Relief Act 1874
- contract for repayment of monies lent to minor
- contracts for goods supplied to minor
- all accounts stated with minor
31
Voidable contracts with minors
- contracts involving recurring obligations: relating to interest in land, marriage settlement, purchase for subscription of shares, partnership, insurance contracts
32
Void/Voidable
Void: ab initio from start
Voidable: initially valid until disadvantaged party choses to void it
33
Valid contracts with minors
- for necessities
- for beneficial services (education/employment) : Contracts for necessaries - onus on producer to prove it is a necessity - only required to pay a reasonable price - high burden on the shopper to know what the particular infant needs (already has)
34
Who has contractual capacity?
- adult of sound mind
- special rules: minors (under 18 yrs), prisoners, intoxicated ppl, mentally unsound and corporations
35
Do contracts need to be in writing?
- no formula needed for most contracts
- benefits of formality:
- makes people more think about what they are doing
- avoids evidential problems with oral contracts - easier to know what is in contract if written
- avoids reliance on memory
36
Statute which outlined which contracts need to be in writing?
Statute of Frauds 1695, Section 2
37
What contracts need to be in writing? (4)
1 contracts to pay debt of another
2 contracts in consideration of marriage
3 contract not to be performed within one year - over time memories fade
4 contracts for sale of land or interest in it (lease)
5 sale of goods over 10 GBP - repealed
38
What constitutes a memo/note?
- certifies oral agreement, no contract, prior to enforcing the contract
- *Tradax:* letter of defendant rejecting the agreement
- does not need to be formal - note of oral agreement - parties, property, price and signature
- parties not need to be explicit but recognizable
- if joinder of documents, need to reference each other and last signature
39
What constitutes a signature?
- not restrictively interpreted - stamps, typed words, headed paper etc. electronic
40
5 ways to imply terms
- by fact
- by law
- by courts
- by custom
- by Constitution
41
2 tests for implication of terms
- parties intention to have included that term but omitted due to being too obvious, error or oversight
- Officious bystander - intended by both parties to be obviously in the contract, goes without saying
- must have been obvious to both parties, not in conflict with express term
- Shirlaw
- Carna
- Kavanagh
- Business efficacy - make contract effective from a commercial POV - needs to have been obvious
- *The Moorock:* usage of the dock/harbor, implied the dock is safe
42
Terms implied by law
rare to imply without intention - special relationships (employer and employee, landlords and tenants - power asymmetry)
43
When the tests for implication won´t be satisfied? (4)
- one of parties would not have agreed with the term
- if one of the parties is unaware of the term sought to be implied
if implying the term would destroy the contract
- if implying the term would have far reaching unwanted consequences
44
What are the advantages and disadvantages of requiring that a contract must be in writing?
Advantages:
* Clarity: Reduces misunderstandings by clearly outlining terms.
* Evidence: Provides a tangible record for enforcement and dispute resolution.
* Certainty: Ensures mutual agreement on key terms.
* Compliance: Satisfies legal requirements for specific contracts (e.g., land sales).
Disadvantages:
* Inflexibility: Makes it harder to adapt terms informally.
* Barriers: May exclude parties unfamiliar with formal processes.
* Cost and Effort: Requires additional time and resources.
45
Quantum meruit claim
'as much as he has earned' and a quantum meruit claim means that a party is claiming a reasonable sum—ie the amount that it deserves, taking into account the works or services that it has performed
Contracts
flashcards
Decks in class (8)
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