Contract Law

Question 1

What is an Offer?

Answer 1

A definite promise to be bound on specific terms if accepted. Can be made to one person, a group, or the world.

Case: Carlill v Carbolic Smoke Ball Co — Offer to the world with performance as acceptance.

Question 2

What is the difference between an Invitation to Treat and an Offer?

Answer 2

An Invitation to Treat is not a binding offer. Shop displays, catalogues, and ads are examples of invitations to treat.

Question 3

How can an Offer be terminated?

Answer 3

An offer can be revoked before acceptance, rejected, or lapsed by time/death/failure of condition.

Question 4

What are the requirements for Acceptance?

Answer 4

Acceptance must be clear, unequivocal, and communicated (exceptions apply).

Postal Rule: Acceptance effective on posting (not receipt). Case: Crown v Clarke — No acceptance if not in response to offer.

Question 5

What is Consideration?

Answer 5

A bargain or price paid for a promise, which can be money, goods, services, etc. Must be real, sufficient, but not necessarily adequate.

Case: White v Bluett — Stopping complaints is not valid consideration.

Question 6

What is the rule regarding Past Consideration?

Answer 6

Past consideration is not valid.

Question 7

What are the exceptions to Consideration?

Answer 7

Promissory estoppel (reliance-based remedy), deeds (signed/witnessed documents).

Estoppel = ‘a shield, not a sword’.

Question 8

What is the Intention to Create Legal Relations?

Answer 8

In domestic/social agreements, there is a presumption of no intention. In commercial agreements, there is a presumption to intend legal consequences.

Question 9

What is the Capacity to Contract?

Answer 9

Parties must have legal ability. Minors are only bound for necessities or beneficial contracts. Mental incapacity or intoxication requires understanding of the contract. Corporations have separate legal personality and are bound by contracts within authority.

Question 10

What is Genuine Consent?

Answer 10

Consent must be free and voluntary. Vitiating factors may void the contract.

Question 11

What are the vitiating factors that may void a contract?

Answer 11

Misrepresentation, Mistake, Duress, Undue Influence, and Unconscionability.

Question 12

Formation of Contract

Answer 12

Agreement
Consideration
Intention
Capacity
Geniune Consent
Legality