Essential Requirements of Contract Flashcards by lew lee

What are the 4 elements of a contract?

Offer
Acceptance
Consideration
Intention (to create legal relations)

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Define a contract

A legally binding agreement between parties

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What does it mean to say that contract law is laissez-faire?

Promotes idea that parties are free to make any contract on any terms.

Not really true as a lot of rules to apply

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What are the 2 types of contract?

Unilateral-Only offerer has an obligation to accept.

Bilateral-Both parties have to agree to an obligation

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What case shows an example of a bilateral contract?

Partridge v Crittenden

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Partridge v Crittenden

Sale of illegal birds.

Held: Was an invitation to treat, not an offer to sell, as advertiser could not reasonably be bound to sell to all those who may accept.

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Carlill v Carbolic Smoke Ball Co

£100 reward to anyone who gets ill after having sniffed the balls regularly. C used smoke balls and used them according to instructions and caught flu. D tried to claim it was an inv. to treat, however D lost as advert showed a course of actions to claim the money.(unilateral offer through reward poster/advertisements). (C had accepted through action/performance) (Offer can be made to anyone and made by any method)

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Rules of an Offer (7)

Must be communicated
Made to anyone through any method
Reward/Advertisements(Unilateral offers)
Must be certain
Possible to withdraw at any time
Offeror must communicate withdrawal
Communication can he made by third party

To remember:3 rules are to do with withdrawal

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Define an invitation to treat

An advert/statement of price. Does not have to be upheld to all parties that approach.

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Fisher v Bell

Flick knives in shop window.
Illegal to SELL them
No offence-was an invitation.
Set precedent that shelves=inv

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Pharmaceutical Society v Boots

-shelves for self service
-items have to be sold by a chemist
therefore shelves are an inv. to treat as them taking it to the till is not acceptance.

It is the customer offering, and the sales person accepting.

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Taylor v Laird

Working as crew member to get home-wasn’t paid wages as offer wasn’t communicated (part of 7 rules of an offer)

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Guthling v Lynn

Offer must be certain-

Buying a ‘lucky’ horse (vague, hard to determine)

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Routledge v Grant

Offer can be withdrawn at any time

D sent an offer with a 6 week time clause, he withdrew it.

Held-Able to withdraw as validly withdrawn

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Byrne v Van Tienhoven

Offeror must communicate withdrawal of offer

Posting a letter to order goods and then changing mind. Had to pay their costs as too late as already accepted.

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Dickenson v Dodds

Communication of withdrawal can be made by a reliable 3rd party

House withdrawn by 3rd party

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Harvey v Facey

Responses in request for info
H: I want to buy Bumper Hall, what’s ur lowest price.
F:£900
H:Agreed

No contract

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Stevenson v McLean

Request for further info

Asked to stagger payments- request not a counter offer.

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Ways to terminate offers(8)

Acceptance,
Revoked,
Rejection/Refusal,
Counter offer,
Lapse of time,
Death,
Failure of conditions,
Battle of form

Hyde v Wrench

Rejection/refusal+Counter offer
Rejected counter offer, and refused to sell for original price. No breach
Counter offer kills the original offer

Ramsgate Hotel v Montefiore

Lapse of time

Letter of acceptance 6 weeks after, share prices had fallen. Offer no longer valid (after a reasonable lapse of time)

Bradbury v Morgan

Death

Continued giving offs goods but not receiving payment. Held: no notice of death so no attempt to terminate contract

Financings Ltd v Stimson

Termination of offer- Failure of conditions
Dealer said only binding when signed by finance company

As finance had not signed, not binding

Butler v Ex-Cell-O

He who fires last shot wins

Whoever has the final offer has the terms to be followed

Rules of Acceptance 5

``` Unconditional Communicated to offerer(silence not) Offeree must be aware of offer Acceptance by authorised person Any form-unless required in specific form ```

Felthouse v Bindley

Silence is not acceptance | “If I hear no more, I will consider the horse mine.” No acceptance

Inland Revenue v Fry

Offeree must be aware. | Note and cheque separated so I.R never knew of note, cannot agree to something haven’t seen

Powell v Lee

Acceptance by authorised person | Governor of school didn’t have authorisation to offer job

Yates v Pulleyn

Any form unless required so Acceptance to be sent by registered post. C sent by ordinary post.

What is the presumption for intention for social and domestic agreements, compared to commercial and business agreements?

Social-no intention, unless courts find evidence of intent (e.g exchange of money) Business-intention, unless situations suggest parties would not intend legal relations

Balfour v Balfour

Husband promised money to wife. She sued to keep after divorce Held:no agreement as it was when they were married

Merritt v Merritt

Separated couple made agreement | Held:binding as intention was there, they were separated already

Jones v Vernon’s Pools

Back of lottery coupon had clause “Binding in honour-no intention to create legal relations” Held:no intention

Edwards v Skyways

Pilot made redudant-not given ex-gratia | Held:was intention as commercial

Define consideration

Exchange of one thing for another

Rules of Consideration

1. Must be sufficient but not adequate 2. Existing contractual duty is not consideration 3. Part payment is not consideration 4. Past consideration is no consideration

Chappel v Nestle

Sufficient but not necessarily adequate. Wrappers were sufficient consideration in exchange for music records

Williams v Roffey Bros

D offered extra payment for prompt work. No consideration as no extra exchange, it was already part of the existing contract to do the work.

D v C Builders v Rees

Part payment is not consideration, as contractually was already bound to pay so no extra exchange

Hirachand Punamchand v Temple

Exception to part payment:where something new is added Father paid sum of money towards sons debt. Held was consideration as was not in original contract, so there was an agreement and exchange (consideration)

Re McArdle

Past consideration is no consideration Promise to pay for work done happened after consideration (work had finished), so was not valid, didn’t have to pay for work

Adams v Lindsell

Postal rule-acceptance when letter is posted

Postal rule case

Household Fire Insurance v Grant-rule still applies if never received/lost

Modern methods of communcation cases

Entores v Miles Far East-acceptance by electronic means is when it arrives Brinkibon v Stahag-if arrives out of office hours-acceptance is next working day

Consumer protection regulations S7 and S8

Distance selling S7-14 day cool off. Allows withdrawal of acceptance if no face to face contact with buyer and seller S8-contract concluded when written confirmation given