Agreement

Question 1

What are the three elements required to form a binding contract?

Answer 1

A clear and certain offer displaying an intention to be bound

An unequivocal acceptance of that offer

Intention to create legal relations

Consideration

Question 2

What is meant by ‘offer and acceptance’ in contract law?`

Answer 2

It refers to an agreement where one party (the offeror) makes a clear and certain offer with intention to be bound, and the other party (the offeree) communicates unequivocal acceptance. This forms the basis of the contract.

Question 3

What is the ‘objective approach’ in determining agreement?

Answer 3

Courts use an objective test to determine whether an agreement exists — focusing not on parties’ internal intent but on what a reasonable person would conclude from the parties’ conduct

Question 4

What are the two essential elements of a valid offer?

Answer 4

(1) The offer must be clear and certain. (2) There must be an intention to be legally bound.

Question 5

What is the difference between unilateral and bilateral contracts?

Answer 5

Bilateral: Both parties make promises (e.g. sale of a watch for £100).

Unilateral: Only one party makes a promise, accepted by the other party performing a specified act (e.g. reward for returning a watch).

Question 6

What is an invitation to treat?

Answer 6

A preliminary communication that invites others to make offers. It is not itself an offer and cannot be accepted to form a contract.

Question 7

Are advertisements offers or invitations to treat?

Answer 7

Generally, they are invitations to treat (Partridge) unless they constitute a unilateral offer.

Question 8

When is an advertisement considered a unilateral offer?

Answer 8

When it contains a clear act required and shows an intention to be bound

Question 9

What is the legal status of goods displayed for sale in shops?

Answer 9

They are invitations to treat

Question 10

Are invitations to tender considered offers?

Answer 10

No, they are usually invitations to treat, unless they commit to accept the highest/lowest bid

Question 11

What is the legal effect of a bid at an auction?

Answer 11

It is an offer. The auctioneer’s fall of the hammer is acceptance

Question 12

What is the rule in auctions ‘without reserve’?

Answer 12

The auctioneer is bound to sell to the highest bona fide bidder and may be liable in damages if they refuse

Question 13

What are the three ways an offer can be terminated?

Answer 13

(1) Rejection (including counter-offers), (2) Lapse (e.g. passage of time, death), (3) Revocation.

Question 14

What is the effect of a counter-offer?

Answer 14

It terminates the original offer and cannot be later accepted

Question 15

How can we distinguish a counter-offer from a request for information?

Answer 15

A request for information does not reject the original offer, whereas a counter-offer does.

Question 16

When does an offer lapse due to time?

Answer 16

If not accepted in the prescribed period, or if not accepted within a reasonable time (depends on context).

Question 17

What is the effect of death on an offer?

Answer 17

If the offeror dies and the offeree knows, the offer lapses. If the offeree dies, the offer lapses regardless of the offeror’s knowledge.

Question 18

When can an offer be revoked?

Answer 18

At any time before acceptance

Question 19

Is communication of revocation necessary?

Answer 19

Yes, it is effective only when communicated to the offeree

Question 20

Can revocation be made by a third party?

Answer 20

Yes, if the third party is reliable and the offeree is aware

Question 21

Can unilateral offers be revoked once performance has started?

Answer 21

Generally no; once the offeree has started performance, revocation may be barred

Question 22

What are the four key aspects of valid acceptance?

Answer 22

(1) Must be in response to the offer, (2) Must be unqualified, (3) Must comply with prescribed mode, (4) Must be communicated.

Question 23

Who can accept an offer?

Answer 23

Only the person to whom the offer is made. If made to the public, anyone with notice may accept

Question 24

What is the ‘mirror image’ rule?

Answer 24

Acceptance must match the offer exactly; qualified acceptance is not valid

Question 25

What happens if a mode of acceptance is prescribed?

Answer 25

If mandatory, only that mode is valid if not, equivalent modes are acceptable

Question 26

When does acceptance take effect?

Answer 26

Upon communication to the offeror. Silence does not count as acceptance.

Question 27

Can a third party communicate acceptance?

Answer 27

Yes, if authorised and if the offeree has made an irrevocable decision to accept.

Question 28

What is the 'postal rule'?

Answer 28

Acceptance is valid from the moment of proper posting, not when received

Question 29

When does the postal rule not apply?

Answer 29

When post was not contemplated To revocations of offers If acceptance is incorrectly addressed If expressly excluded by the offeror

Question 30

How is acceptance by instantaneous communication treated?

Answer 30

Effective when received. If the fault lies with the offeror, they may be estopped from denying receipt.

Question 31

What if an instantaneous message is sent outside office hours?

Answer 31

It is deemed received at the start of the next business day

Question 32

Is communication required in unilateral contracts?

Answer 32

No. Performance of the act constitutes acceptance

Question 33

What is required for contract terms to be enforceable?

Answer 33

The terms must be certain and complete. The court uses an objective test to assess whether the parties agreed on all essential terms