Agreement, Contract And Proposal Flashcards
(17 cards)
Definition of contract
An agreement enforceable by law is contract
For formation of contract there must be 1) an agreement, 2) The agreement should be enforceable by law
Agreement
Defined in section 2(e) as every promise & every set of promises forming the consideration for each other.
When agreement becomes contract?
An agreement is a contract when it is made for some consideration, parties competent to contract, free consent & for lawful object.
Proposal
A proposal is in the first place an expression of the offeror’s willing ness to do of to abstain from doing something.
Communication of proposal
A proposal may be communicated in anyway which has the effect of laying before the offferee the willingness to do os abstain.
It may be done by 1) word of mouth
2) by writing
3) even by conduct
Implied offer
An offer which is expressed by a conduct is called an implied offer and the one which is expressed by words, written or spoken, is called an express offer
Case- upton-on- Severn RDC v Powell
Implied promise
Case- Thovensen car ferries v Weymouth borough council
Case of implied agreement
A contract was signed between an Indian and a Yugoslavian party. One of the terms provided for arbitration by the International Chamber of Commerce in Paris. Immediately thereafter the Indian party cabled and also wrote its objection about the arbitration clause. The other party made no reply to it, but permitted the work to go on. A dispute having arisen, it was held that the arbitration clause had becorhe deleted from the contract by an implied agreement. A suit could lie in a court of law.
Lalman Shukla v Gauri Datt
Offers not not known cannot be valid
Case- Balfour v Balfour
Intention to contract- It is not every loose conversation that is to be turned into a contract, although the
parties may seem to agree.”’
Objectivity test of contractual intention
The test of contractual intention is objective, not subjective. What mat ters is not what the parties had in mind, but what a reasonable person would think, in the circumstances, their intention to be. Case law - simpkins vs pays
Case- Banwari all vs Sukhdarshan Dayal
Puffing up the sale through use of loud speakers
In addition to the existence of an agreement and presence of consideration there is also third contractual element in the form of intention of the parties to create legal relations
Case- Carlill vs Carbolic smoke ball co ( Smoke Ball case)
an offer may be made to the world at large. But the contract is not made with all the world. Contract is made only with that person who comes forward and performs the conditions of the proposal. The principle is thus stated in Anson: “An offer need not be made to an ascertained person, but no contract can arise until it has been accepted by an ascertained person.”
Case of general offer
Acceptance by performing conditions or receiving consideration
Case- Har bhajan lal vs Har charan lal
Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.
Invitation to treat
An offer should be distinguished from invitation to receive offers.
Advertisement to sell something for ex books, houses etc, there is no offer to be bound by contract. Such advertisement are offers to negotiate- offers to receive offers - offers to Chaffer
An offer is the final expression of the willingness by the offer or to be bound by his offer
Case -Harvey vs Facey
Where a party, without expressing his final willingness, proposes certain terms on which he is willing to nego tiate, he does not make an offer, but only invites the other party to make an offer on those terms. This is perhaps the basic distinction between an “offer” and an “invitation” to receive offers.
Catalogues and display of goods a shopkeeper catalogue of prices is not an offer, it is only an invitation to treat
For the same reason the display of goods in shop with price chits attached is not an offer even if there is a self service system in the shop …held in Pharmaceutical society of Great Britain vs boots cash chemists southern ltd
Is catalogues and display of goods an offer?
