Contract Formation Flashcards

Question

Cases where silence meant that the contract was not accepted

Answer 1

tthis can be seen in the case of Felthouse v Bindley (1863) There were discussions about the purchase of a horse. The final letter from the offeror stated: ‘If I hear no more, I consider the horse mine.’ There was no further response, but the court decided there was no contract as an offer could not be accepted by silence or inactivity on the part of the offeree.

Answer 2

Acceptance by post takes place as soon as the letter is posted at the moment the reply is sent this can be seen in the case of Adams v Lindsell where Lindsell wrote to Adams, offering to sell them some wool and asking for a reply'in the course of post'. The letter was delayed in the post. On receiving the letter, Adams posted a letter of acceptance the same day. However, because of the delay Lindsell assumed Adams did not want the wool and sold it to someone else. There was a valid contract because acceptance took place as soon as the letter was placed in the post box, and there had been no communication about revoking the offer

Answer 3

For the postal rule to be used all 3 requirements must be satisfied 1The rules only apply if post is the usual or expected means of communication. 2. The letter must be properly addressed and stamped. 3.The offeree must be able to prove the letter was posted.

Answer 4

this is covered in Article 11 of the Electronic Commerce (EC Directive) Regulations 2002 states that where a buyer is required to give his consent through technological means (such as clicking on an icon), the contract is made when the buyer has received from the service provider electronically an acknowledgement of receipt of the acceptance. Thus many online businesses state, ‘Your order has been received and is now being processed’ or words to that effect, rather than ‘Your order has been accepted’. This ensures that online sellers are not required to accept the order at this point.

Answer 5

An acceptance was sent by an email by the offeree's solictors to offeror's solictors and received by the starter's mail box it was decided it was reasonably expect them to read it

Answer 6

Consideration of a contract is something must be exchanged . both parties must give something. A contract is a bargain not a gift. Consideration can be excecutory this is to do or givein the future or executed something that is done is given nowus d

Answer 7

Some right,interest,profit or benefit accurring to one party or the some forebearance,detriment ,loss of responsibility given ,suffered or undertaken by another

Answer 8

1. Consideration must move from the promisee 2. Consideration must be sufficient but does not ned to be adequate

Answer 9

Consideration must move from the promisee this is where the person can only enforce a promise made them if they gave something in exchange for that promise this can be seen in the case of tweddle v Atkinson where Both fathers of a young couple who intended to marry agreed in writing to each give a sum of money to the couple. The woman's father died before giving over the money and the husband then sued the executors of the estate when they refused to pay the money. Even though the husband was named in the agreement, his claim failed because he had given no consideration and was not a party to the agreement himself.

Answer 10

Consideration must be sufficient but does not ned to be adequate. This means that the parties to the contract themselves agree that the value of things being exchanged is acceptance this can be seen in the case of Thomas v Thomas where Before he died, a man expressed the wish that his wife should be allowed to remain in the house after he died. This wish was not stated in his will. The executors carried out this wish and charged the widow a nominal rent of £1 per year. When they later tried to evict her, they failed because consideration was provided by the £1 per year rent.

Answer 11

Emotional Promises are not sufficient this can be seen in the case of White v Bluett where A son owed his father money and had given him a promissory note (a written promise to pay a sum of money) to cover the debt. The father died with the promissory note unpaid. The father's executors sued for the money. The son claimed that his father had promised to write off the debt if he stopped complaining about the way his father was handing out his assets, which he had done. There was no consideration, as he had no legal right to complain, and natural love and affection were not consideration, so he still had to pay the debt

Answer 12

Past Consideration is also sufficient this is where money paid in the past does constitute consideration for present agreements this can be seen in the case of Re McArdle where Mrs McArdle had carried out work on the bungalow in which she lived with her husband and his mother. The bungalow was part of the estate of her husband’s father. After the work had been carried out, those inheriting the bungalow signed a document stating ‘in consideration of you carrying out the repairs we agree that the executors pay you £488 from the estate’. As the promise to make payment came after the work had been done, it was past consideration. There was, therefore, no contract to pay her the £488.

Answer 13

There may still be sufficient consideration if there was implied promise to pay at the time the other party carried out their part this can be seen in the case of Lampleigh v Braithwait where Braithwait had been convicted of murder and was to be hanged. Lampleigh agreed to do what he could to obtain a royal pardon (the only way to avoid being executed). Lampleigh negotiated the pardon, and Braithwait then promised to pay him € 100, but did not do so. Braithwait's argument was that the gaining of the pardon was past consideration so there was no obligation to pay the £ 100. The court decided that although the consideration had preceded the promise, the actions taken were at the defendant's request and were so important that a fee must have been implied.

Answer 14

When the claimants are performing an existing duty under a previous contract, this is not sufficient consideration in a new contract this can be seen in the case of Stilk v Myrick where Stilk agreed to sail as crew with Myrick for £5 per month. Part way through the voyage, two of the crew deserted and the captain asked the remaining crew to do the extra work, sharing the wages saved. The claim for the additional wages failed because there was no consideration - crew agree to do everything possible in the event of emergencies.

Answer 15

However performing an existing duty will be sufficient consideration if something extra is done in return for the new payment this is an extra benefit this can be seen in the case of Hartley v Ponsonby where after desertion only 19 members of a crew of 36 remained. A similar promise to pay more money to the remaining crew was enforceable because the reduction in numbers made the voyage much more dangerous, so there was an extra element amounting to good consideration.

Answer 16

The courts are becoming generous in their approach to what counts as an extra benefit this can be seen in the case of Williams v Roffey Bros and Nicholls (Contractors) Ltd where Roffey subcontracted the carpentry on a number of flats it was refurbishing to Williams for £20,000. Williams had underquoted for the work and ran into financial difficulties. There was a clause in Roffey's building contract that it would have to pay its client if the flats were not finished on time. Therefore, Roffey agreed to pay Williams another £ 10,300 if he would complete the carpentry on time. Williams completed the work on time but Roffey failed to pay the extra £ 10,300. Even though Williams was only doing what he was already contractually bound to do, Roffey was gaining the extra benefit of not having to pay the money for delay to its client. Williams was thus providing consideration for Roffey's promise to pay him more for the work merely by completing his existing obligations on time. The reason why Roffey refused to pay Williams the additional sum was that, in completing the work on time, Williams was merely performing his pre-existing contractual duty. The court decided that the promise for extra pay was enforceable

Answer 17

But there can be sufficient consideration if the existing contractual duty was owned to a third party this can be seen in the case of Shadwell V Shadwell where The defendant was the plaintiff’s uncle. The uncle promised to pay his nephew £150 a year until the nephew’s income reached 600 guineas provided the nephew married his fiancée. The uncle paid 12 instalments but then died, and the payments stopped. The nephew sued his uncle’s estate for the remaining payments performance of the marriage contract was consideration, even though the contract was made with a third party to the agreement, as the uncle’s promise was an inducement to the nephew to perform this contract.

Answer 18

The rule of privity is that only those who are parties to a contract are bound by it

Answer 19

it is closely related to the rule taht consideration must move from the promisee this can be seen in the case of Tweddle v Atkinson where Both fathers of a young couple who intended to marry agreed in writing to each give a sum of money to the couple. The woman's father died before giving over the money and the husband then sued the executors of the estate when they refused to pay the money. Even though the husband was named in the agreement, his claim failed because he had given no consideration and was not a party to the agreement himself. additionally this can be seen in the case of Beswick v Beswick where P contracted with his nephew (D) to transfer his coal business in consideration of the nephew paying his widow (C) after his passes When P died D refused to pay C.C sued both personally and in her capacity as P’s administratrix for breach of contract it was held C succeeded only in her capacity as administratrix Specific performance was ordered for payment to be made

Answer 20

This is where a party who have made the booking can claim on their behalf as a third party this can be seen in the case of Jackson v Horizon Holidays where Mr Jackson booked a holiday for himself and his college . The holiday was very disappointing he sued for damages for himself and his family . The court decided that it would be unfair to limit the awards. The claim of jackson's family were allowed even though they were not strictly parties to the holiday contract

Answer 21

When one of the parties to the contract is acting as an agent on behalf of a third party this is a principal the principal is bound by and be able to enforce the contract. Agent and principal are treated the same person

Answer 22

When the court finds that a secondary contract exists with the third party connected by the main contract this can be seen in the case of Shanklin Pier v Detel Products where Owners of the pier (C) employed contractors to paint the pier, under the contract C has the right to specify what paint to be used,Seller of paint (D) represented to C that its paint was suitable for painting the pier and that 2 coats would last for 7 years As a result C instructed the contractor to purchase paint from D After the paint peeled in 3 months, C sued D for compensation

Answer 23

An agreement between 2 land owners in which one of them promises they will not do something on their land. Anyone this can be a third party who buys the land will also be bound by that promise. This can be seen in the case of Tulk v Moxhay where T sold land and the buyer promised that he and successors in title will keep the garden in its present form M then bought the land and sought to build a garden despite knowing about the covenant before buying the land and had paid less for it T sought to enforce the covenant

Answer 24

this means that a third party may be able to bring a claim in negligence like in the case of Donoghue v stevenson

Answer 25

The contracts(Right of 3rd parties) Act 1999 this is the main exception to the privity rule . Most 3rd Parties who want to sue will try and use this exception as it is the widest Due to the harshness of the privity rule and the limited common law exceptions. Parliament passed the Contracts(Right of Third parties) Act 1999 This Act allows a third party to enforce a contract against either of the parties if the following condition 1. They are expressly identified in the contract by name ,class, description 2. Either the contract expressly states that they have the right to sue or the contract is intended to benefit them

Contract Formation Flashcards

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