Constituent parts of a contract Flashcards
What are the three key parts in the formation of a contract?
Agreement - valid acceptance follows valid offer
Consideration - something given in return for something promised
Intention to create legal relations - clear intention to be bound
Agreement (offer) - What is an offer?
It is a statement made by one party (offeror) which sets out the term they agree to be bound by.
What is an invitation to treat?
It is a passive conversation which invites another to make an offer.
Agreement (Acceptance) - When is a contract formed?
When the offer is accepted.
Agreement (Acceptance) - What must there be in order to enable a valid acceptance?
A valid offer
Agreement (Acceptance) - Postal rule?
If post is an accepted method of acceptance, then the acceptance is made upon posting the letter, even if not received - Adams v Lindsell
Consideration (rationale for consideration) - What is the usual form of consideration?
Price paid for goods or services?
What does quid pro quo mean?
a favour granted in return for something promised.
Definition of consideration?
Offeree agreeing to pay money to offeror in return for goods and services.
Consideration (and privity) - What must consideration come about as a result of?
It must come about as a result of a promise to do something.
Consideration (and privity) - Give an example of a consideration and a promise…
I’ll mow your lawn (promise), and in return I want you to pay me £20 (consideration).`
Consideration (and privity) - Who can enforce the promise?
Only the person who has agreed to provide the consideration.
Consideration (and economic duress) - When will an offer of extra money for completing a contract only be enforceable?
It will only be enforceable if the party promising the extra money obtains any further benefit, and not just the original fulfilment of the contract - Williams v Roffey
Consideration (and economic duress) - When will a promise of extra money not be enforceable?
If it wasn’t given freely and without economic distress (a threat)
What is an exclusion/exemption clause?
It is a term in a contract which excludes the liability of the party inserting it from certain contractual breaches that may occur at a later time.
