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Flashcards in Contract formation Deck (15):

What are the 3 types of contract?

- void
- voidable
- unenforceable


Describe a void contract and why may a contract be void?

- no contract at all
- if it is illegal


Describe a voidable contract and why may a contract be voidable?

- can be set aside

- there is a lack of capacity
- lack of free will
- contract made due to misrepresentation


Describe an unenforceable contract and why may a contract be unenforceable?

- valid contract made, but cannot be enforced
- e.g. mistakes in contract


What are the main elements of a contract?

- agreement (offer and acceptance)
- intention to create legal relations
- consideration


Describe what an offer is

- definite promise to be bound on specific terms
- made by an offeror to an offeree (can be one person, group of people, or the whole world)


What are not an offer?

- invitation to treat (an invitation to someone to make an offer)
- statement of intention


How long does an offer last?

Lasts until it is terminated by:
- rejection
- counter-offer
- lapsed over time
- revocation
- failure of a pre-condition


Describe the forms of an acceptance

- unqualified agreement to all the terms on offer
- can be verbal, in writing or inferred by conduct
- offeror cannot dictate that silence will be acceptance
- acceptance must be communication unless the offeror dispenses with that requirement


Intention to create legal relations

- presumption based on type of relationship
- social/domestic - presume no intention
- commercial - presume intention
- presumption may be rebutted if clear evidence to the contrary


What is consideration?

What each party gives/agrees to give


What are types of good consideration?

- executed - act performed at time of agreement
- executory - promise to do something in the future
- sufficient not adequate - as long as it has value, does not matter if it is not equal
- forbearance of existing rights


What are types of not good consideration?

- past - already performed at time of agreement
- performance of an existing statutory duty - unless exceeded
- performance of existing contractual duty - unless exceeded or a new contract with a third party


What is the privity of a contract?

Only the parties to the contract can enforce/be sued under it


What are the exceptions to the privity of contract?

- agency law
- contract (rights of third party) act