Agreement and Contractual Intention Flashcards
(111 cards)
1
Q
What are the three essential elements for a binding contract?
A
Agreement, consideration, intention for legal consequences
2
Q
Define an ‘offer’ in contract law according to Professor Treitel.
A
An expression of willingness to contract on certain terms, made with the intention that it shall become binding upon acceptance
3
Q
Who is the offeror?
A
The person who makes the offer
4
Q
Who is the offeree?
A
The person to whom the offer is made
5
Q
What is the primary approach courts adopt to determine contractual intention?
A
An objective approach based on the conduct and statements of the parties
6
Q
True or False: The actual intention of the offeror is always considered in determining if an offer exists.
A
False
7
Q
What is the term for preliminary statements that invite negotiation but do not create a binding contract?
A
Invitation to treat
8
Q
Fill in the blank: Goods displayed in shops are typically considered ______.
A
invitations to treat
9
Q
What case established that goods on display in shops are generally invitations to treat?
A
Pharmaceutical Society of Great Britain v Boots Cash Chemists
10
Q
In the context of an auction, when is a sale concluded?
A
On the fall of the auctioneer’s hammer
11
Q
What is a reserve price in auction law?
A
The lowest price that the auctioneer may accept for the lot
12
Q
What happens if an auction is advertised ‘without reserve’?
A
The highest bidder must be accepted regardless of the bid amount
13
Q
What is the legal distinction between unilateral and bilateral contracts?
A
Unilateral contracts involve one party making a promise, while bilateral contracts involve mutual promises
14
Q
What case is an example of a unilateral contract involving an advertisement?
A
Carlill v Carbolic Smoke Ball Company
15
Q
True or False: Advertisements are always considered offers.
A
False
16
Q
What is the significance of the case Williams v Carwardine regarding advertisements?
A
Advertisements of reward are traditionally treated as offers
17
Q
What is the effect of an advertisement stating a reward?
A
It is treated as an offer that becomes binding upon acceptance by supplying the information
18
Q
What is the primary difference in acceptance between unilateral and bilateral contracts?
A
Unilateral contracts require performance of an act for acceptance, while bilateral contracts require mutual promises
19
Q
Fill in the blank: In contract law, an auctioneer’s request for bids is an ______.
A
invitation to treat
20
Q
What does the Sale of Goods Act 1979 state about bids in an auction?
A
Bids are offers that can be withdrawn at any time before acceptance
21
Q
What case involved a breach of contract where the auctioneer did not accept the highest bid?
A
Barry v Davies
22
Q
What was Mr. Barry’s loss of expectation in the Barry v Davies case?
A
The difference between his bid and the total value of the machines
23
Q
What is an offer in the context of an auction?
A
An offer which the auctioneer may accept or reject
Sale of Goods Act 1979, s 57(2)
24
Q
What happens when an auctioneer accepts a bid?
A
A bilateral contract is formed between the owner and the bidder.
25
What occurs if the auctioneer refuses to accept a bid?
There cannot be a contract between owner and bidder.
26
What is the significance of an auction being advertised 'without reserve'?
It constitutes an offer of a unilateral contract by the auctioneer.
27
What can the highest bidder do if the auctioneer refuses to accept their bid in a 'without reserve' auction?
The highest bidder may have a claim in damages against the auctioneer.
28
In Harvela Investments Ltd v Royal Trust Company of Canada Ltd, what did the House of Lords determine about the invitations to tender?
The telexes constituted offers of a unilateral contract to sell to the highest bidder.
29
What is an invitation to tender generally considered as?
An invitation to treat.
30
What was the outcome of Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council regarding tender consideration?
The court held there was an implied promise that a conforming tender would be considered.
31
What are the ways an offer may be terminated?
* Revocation by the offeror
* Rejection by the offeree
* Lapse of time
32
When can an offer be revoked?
Any time before acceptance.
33
What is the principle established in Routledge v Grant regarding keeping an offer open?
Promises to keep an offer open are not binding if they are gratuitous.
34
What is the significance of Mountford v Scott in relation to offers?
The claimant's payment for an option made the offer irrevocable.
35
What must be done for revocation of an offer to be effective?
Notice of withdrawal must be communicated to the offeree.
36
What did the case of Byrne & Co v Van Tienhoven & Co establish about revocation?
Revocation takes effect only on receipt.
37
Can revocation be communicated by a third party?
Yes, as established in Dickinson v Dodds.
38
In unilateral contracts, when does acceptance occur?
Upon completion of the specified act.
39
What was held in Errington v Errington and Woods regarding revocation of a unilateral contract?
The father's promise was irrevocable as long as the couple continued to pay the mortgage.
40
How can an offer be rejected?
* Expressly
* Implicitly through a counter-offer
41
What case illustrates that a counter-offer implies rejection of the original offer?
Hyde v Wrench.
42
Is a simple inquiry about payment methods considered a counter-offer?
No, it is not an implied rejection.
43
What constitutes a counter offer?
A counter offer is when the offeree responds with different terms, implying rejection of the original offer.
## Footnote
Example: Hyde v Wrench where a different price was proposed.
44
Does a simple inquiry about payment methods constitute a counter offer?
No, it is simply a request for information and does not affect the original offer.
## Footnote
Authority: Stevenson Jacques and Co v McLean (1880) 5 QBD 346.
45
What happens to an offer after a specified time?
The offer lapses after the specified time if stated; otherwise, it lapses after a reasonable time.
## Footnote
Example: Quotation valid for 21 days.
46
How can an offer be revoked?
An offer can be revoked at any time before acceptance, but revocation must be communicated to the offeree.
## Footnote
Authority: Byrne v Van Tienhoven.
47
What is an exception to the general rule of revocation?
If the offeree has provided something in return for keeping the offer open, it cannot be revoked.
## Footnote
Authority: Mountford v Scott.
48
What is required for revocation of an offer made to the public?
It can be revoked through the same channel and with the same prominence as it was made.
## Footnote
Authority: Shuey v United States.
49
What is the significance of the case Errington v Errington and Woods?
It demonstrates that an offer in a unilateral contract cannot be revoked once the offeree begins to perform the act of acceptance.
50
What constitutes acceptance of an offer?
Acceptance must be a complete and unqualified assent to all terms of the offer.
## Footnote
Authority: R v Clarke (1927) 40 CLR 227.
51
What does the term 'unqualified acceptance' mean?
It means acceptance must correspond exactly with the terms of the offer; any variation constitutes a counter offer.
## Footnote
Authority: Treitel's definition of acceptance.
52
In which case was it established that a request for further information does not destroy an offer?
Stevenson Jacques v McLean.
53
What is a 'battle of the forms'?
A situation where businesses exchange their own standard terms and conditions, leading to counter offers.
## Footnote
Example: Butler Machine Tool v Ex-Cell-O Corp.
54
What was the outcome of Butler Machine Tool v Ex-Cell-O Corp regarding the price variation clause?
The court found that the contract was on the defendant's terms, which did not include the price variation clause.
55
What did the case TRW Ltd v Panasonic Industry Europe GmbH illustrate about the last shot in the battle of the forms?
The court sided with Panasonic, emphasizing that earlier signed Ts & Cs could prevail over subsequent terms.
## Footnote
This case highlights the importance of prior agreements in contract terms.
56
What is required for an agreement to be enforceable?
The agreement must be certain and complete; uncertainty may lead to non-enforcement.
57
What is the general rule regarding communication of acceptance?
Acceptance must be communicated by the offeree or their agent.
## Footnote
Authority: Entores Ltd v Miles Far East Corp [1955] 2 QB 327.
58
Can the offeror waive the requirement for communication of acceptance?
Yes, especially in unilateral contracts where performance acts as acceptance.
## Footnote
Example: Carlill v Carbolic Smoke Ball Co [1893] QB 256.
59
What does the case Felthouse v Bindley illustrate about silence as acceptance?
Silence cannot be deemed acceptance; the offeree cannot be forced to act to accept an offer.
60
What is the implication of an offeror stating that silence will be deemed acceptance?
It would be unfair on the offeree if they had to contact the offeror to reject the offer.
## Footnote
This principle is derived from the case Felthouse v Bindley (1862) where the court ruled that silence does not constitute acceptance.
61
What was the main issue in the case Felthouse v Bindley?
Whether there was a contract for the sale of the horse between the uncle and nephew.
## Footnote
The court held there was no contract because the nephew did not communicate acceptance.
62
What did the court conclude regarding the uncle's right in Felthouse v Bindley?
The uncle had no right to impose a sale unless the nephew communicated a rejection of the offer.
63
Why has the decision in Felthouse v Bindley been criticized?
The nephew was not an unwilling offeree, as he intended to accept the offer by instructing the auctioneer not to sell the horse.
64
What does the rule that silence is not acceptance aim to protect?
It aims to protect an unwilling offeree from the need to reject offers.
65
What is the postal rule regarding acceptance?
A letter of acceptance is complete on posting, forming a contract at that moment.
66
In which case was the postal rule established?
Adams v Lindsell (1818) 1 B & Ald 681.
67
What was the outcome in Household Fire and Carriage Accident Insurance Co v Grant regarding lost acceptance letters?
The acceptance was valid on posting, regardless of whether the letter arrived.
68
What are the limitations to the postal rule?
It applies only to acceptances, must be reasonable to send by post, the letter must be properly posted, and the offeror can exclude the rule.
## Footnote
Example: Holwell Securities Ltd v Hughes where the requirement for notice excluded the postal rule.
69
What happens if acceptance is sent by post but not received?
If the postal rule applies, acceptance is still valid upon posting.
70
Can an acceptance sent by post be retracted before it reaches the offeror?
It is uncertain; arguments exist both for and against retraction before communication.
71
What is the general rule regarding acceptance by electronic communication?
Acceptance must be communicated, and is effective when it is reasonable to expect the recipient to have read it.
72
What case established the principle regarding acceptance via telex?
Entores v Miles Far East Corp [1955] 2 QB 327.
73
When is acceptance effective in the case of electronic communication?
When it is received, or when it would be reasonable to expect the recipient to have read it.
74
What distinguishes acceptance from a counter offer?
A counter offer introduces a new provision and acts as an implied rejection of the original offer.
75
What is the significance of the case Stevenson v McLean regarding requests for information?
A request for information does not destroy the original offer, which can still be accepted.
76
What constitutes acceptance in a unilateral contract?
The offeree's conduct constitutes acceptance without the need for communication.
## Footnote
Example: Carlill v Carbolic Smokeball Co.
77
In what situations does the postal rule not apply?
When the offeror has expressly or impliedly excluded it.
78
What must be satisfied for the postal rule to apply?
* Acceptance must be communicated
* Acceptance must be reasonable to send by post
* Letter must be properly stamped and addressed
* Offeror must not exclude the postal rule
79
What is an offer?
An offer is a proposal made by one party intending to be bound as soon as it is accepted.
## Footnote
An offer must show intent to create a legal obligation.
80
Can an offer be revoked?
Yes, an offer can usually be revoked at any time before acceptance.
## Footnote
This is supported by the case Routledge v Grant.
81
How must the revocation of an offer be communicated?
Revocation of an offer must be communicated by the offeror.
## Footnote
This is established in Byrne v Van Tienhoven.
82
What happens if a counter offer is made?
A counter offer destroys the original offer.
## Footnote
This is illustrated in Hyde v Wrench.
83
What is the general rule regarding acceptance?
Acceptance must be communicated and is effective when and where it is received.
## Footnote
This is discussed in Entores v Miles Far East Corp.
84
What is the postal rule in contract law?
The postal rule states that acceptance is effective when posted, provided it is reasonable to use the post.
## Footnote
This is established in Adams v Lindsell.
85
Can acceptance be valid if the offeree is unaware of the offer?
No, you must know about the offer when you accept.
## Footnote
This principle comes from R v Clarke.
86
What is the presumption regarding intention to create legal relations in domestic agreements?
In domestic agreements, there is a presumption that the parties did not intend to create legal relations unless proven otherwise.
## Footnote
This is based on Balfour v Balfour.
87
What is the presumption in commercial agreements regarding intention to create legal relations?
In commercial agreements, there is a strong presumption that the parties intended their agreement to have legal consequences.
## Footnote
This is illustrated in Edwards v Skyways.
88
What can rebut the presumption of intention to create legal relations in a commercial context?
Clear words are needed to rebut the presumption of intention to create legal relations in a commercial context.
## Footnote
This is shown in Rose and Frank Co v Crompton Bros.
89
What is the effect of adding new terms to an acceptance?
Adding new terms to an acceptance constitutes a counter offer and destroys the original offer.
## Footnote
This principle is established in Hyde v Wrench.
90
What is a bilateral contract?
A bilateral contract is a promise in return for a promise from the other party.
## Footnote
This contrasts with unilateral contracts, where a promise is made in return for an act.
91
Fill in the blank: A self-service display in a shop is usually an _______.
invitation to treat.
## Footnote
This is supported by Pharmaceutical Society of Great Britain v Boots Cash Chemists.
92
True or False: An advertisement of a reward is generally regarded as an offer.
True
## Footnote
This is supported by cases like Williams v Carwardine and R v Clarke.
93
True or False: Acceptance is an unqualified assent to the terms of the offer.
True
## Footnote
Acceptance must mirror the terms of the offer.
94
True or False: The offeree’s motive for accepting is irrelevant.
True
## Footnote
This principle is established in Williams v Carwardine.
95
What is a request for information in the context of offer and acceptance?
A request for information does not destroy the original offer and does not amount to acceptance.
## Footnote
This is discussed in Stevenson v McLean.
96
What case established that an offeror may exclude the postal rule by indicating a need for 'notice in writing'?
Holwell Securities v Hughes
## Footnote
In Holwell, the Court of Appeal held that the word ‘notice’ indicated that the offeror wanted to receive the acceptance and impliedly excluded the postal rule.
97
What did the court in Holwell state about the postal rule applying in cases of manifest absurdity?
The rule should not apply if it would produce manifest absurdity and inconvenience.
98
When is Paul’s acceptance valid if the postal rule applies?
On 15 April.
99
What happens if the court decides that John has excluded the postal rule?
Paul’s acceptance can only be valid when it is communicated.
100
What is the effect of a revocation of an offer?
Any offer may be revoked at any time before acceptance, but it is not effective until communicated to the offeree.
101
Which case established that revocation is not effective until communicated to the offeree?
Byrne v Van Tienhoven.
102
If the postal rule applies, when is Paul’s letter of acceptance valid in relation to John’s revocation?
When posted on 15 April, before he received John’s revocation.
103
If the postal rule does not apply, when will John’s revocation be effective?
On 18 April.
104
What is the conclusion regarding the existence of a contract based on the postal rule?
If the postal rule may have been excluded, there is no contract; if not excluded, there is a contract.
105
What should Paul do if he finds out the cost of hiring someone else exceeds £5,000?
Sue John for damages for breach of contract for the difference.
106
What is the general aim of the court when assessing damages?
To put the innocent party in the position they would have been if the contract had been properly performed.
107
What are the three elements necessary for a legally binding contract?
* Agreement (offer and acceptance)
* Contractual intention
* Consideration
108
Why is it important to identify if parties have reached an agreement?
To advise on contractual issues, such as alleged breach of contract.
109
What is the presumption regarding contractual intention in a commercial context?
It is very difficult to rebut the presumption that the parties intended their agreement to have legal consequences.
110
What process is central to 'thinking as a lawyer'?
Step-by-step analysis.
111
Fill in the blank: For there to be a legally binding contract, there must be _______.
[agreement, contractual intention, and consideration]
