Contract Law - Offer And Acceptance Flashcards
(18 cards)
What is a contract
Agreement between two or more persons that is legally binding
Elements of a contract
- Agreement: Implied, non-negociable or unenforceable
- An intention to create legal relations
- Compliance with required formalities where applicable
- Consideration: a promise to do something, in return the other parties will make a similar process
- Capacity to contract: contract may be voided if party did not have capacity
Form of contracts
- Simple contracts - contracts that can be made in any form
- Speciality contracts - contracts that have to be be in a particular form to be legally enforceable by the courts
- Some contracts required to be made by deed (e.g. land conveyance - buying selling houses), in writing/evidenced in writing
Bilateral contract
- where one party promises a certain action in response to the other party’s action
- e.g. buying goods in a store, fixing someone’s car for an agreed price
Unilateral contract
- one party makes a promise of an action if another party executives an action, but no obligation to execute said action
- e.g. a reward for lost property, an insurance policy
The offer
- usually one party makes an offer, which sets out the proposed terms of the contract (the offeror)
- it is up to the other party whether they want to accept this or not (offeree)
- must be clear without terms that are not too vague
Invitation to treat
- Different to an offer
- An expression of willingness to negotiate or invite offers
- e.g. shop displays
Mere puff or boast
- When something is an exaggeration
- E.g. PepsiCo offered a Pepsi point scheme, with a fighter jet worth 7,000,000
- Leonard wanted to buy the Pepsi fighter jet to make a profit
- Was not allowed as was just an exaggeration
Termination by revocation
- the offer is withdrawn by the person making the offer
- an offer can be revoked at any time up until the offer is accepted, even if the offeror informs the offeree they will keep the offer open for a period of time
- However, if the offeror makes a promise to keep the offer open and the offeree gives them something in return (consideration in law), they are contractually bound to keep their promise. E.g. putting down a deposit to buy something
Termination by rejection and counter offer
If a counteroffer is made, this is regarded as a rejection of the original offer
Withdrawal of offer in unilateral conditions
If an offer is made unilaterally and the offeree has started to execute the action (part-performance) there is generally an implied obligation to not withdraw the offer
Termination by lapse of time
- If the offer has a time limit, it will expire at the end of that limit
- If no specified time, it will still expire after a reasonable time, depending on the nature of the offer.
Termination by death
- the deceased offeree is unable to accept an offer because they are dead
- If the offeror dies, then the offer terminates once the offeree knows of the death
- If the offeror dies and the offeree does not know of the death, could be legally uncertain, particularly if there is an element of part performance
Acceptance
Acceptance of an offer is the unconditional acceptance to all the terms of an offer
Can be made:
- Orally
-In writing
- Hammer fall at an auction
- Indicated by the conduct of the offeree
Exceptions to the communication rule
- Postal acceptance:acceptance is valid as soon as the notice of acceptance
- Unilateral contracts
Intention to create legal relations
- In order for an agreement to be legally binding, the parties must intent for legal relations to be imposed on them
- Intention doesn’t necessarily need to be stated
Social domestic and family arrangements
- generally presumed that these arrangements are not legally binding
Exemptions to the preseumption
- if there is clear evidence that legal relations were intended to be created
