essentials of contract

Question 1

why are contracts essential in a free market?

Answer 1

in a free market we cna buy and sell goods at whatever price we want
becaue of this promises people make need to be enforced
people buy goods for a certain price and can sell them on formore
if you cant efnorce the first agrrments then the second cant be carried out and people cant make a living

Question 2

what are the other reasons why contracts are needed

Answer 2

• to establish peoples rights
• to set out remedies for broken agreements

Question 3

what act states that sale or transfer of land contracts must be in writing?

Answer 3

law of property (miscellaneous provisions) act 1979

Question 4

what terms were in the contract in case L’estrange v Graucob which meant that L’estrange couldnt take graucob to court?

Answer 4

• statutory terms were excluded
  meaning if anything was faulty she had no protection

Question 5

what are the ways in which an agreement can be made

Answer 5

• offer and acceptance
• if a way of working has happened and been successful for a long time it is likely those involved agree to it
  this is known as “historical course of dealing’

Question 6

what act was challenged in phamesutical society of great britian v boots cash chemist?

Answer 6

the pharmacy and poisins act 1939

Question 7

why are adverts in newspapers and products displayed in shop windows invitiations to treat and not offers

Answer 7

• becuase those putting out the Invitiations are able to refuse someone from buying that they are advertising
• if they were offers then as soon as someone wanted one they would have. to give it to them
• but shop keepers and those putting adverts in newspapers have the right to say no

Question 8

what is the difference between invitations to treat (ads in newspapers) and unlitalteral agreement invitations

Answer 8

• if an advert is clear enough (as seen in the carbolic smoke ball case) then it can be an offer

Question 9

what is a bilateral agreement?

Answer 9

each party in the contract to perform a promise
- a promise in exchange for a promise

Question 10

what is a unliateral agreement?

Answer 10

• only one party is obliged to perform

ie in the smoke ball case noone was obliged to buy the product and use it but the company were obliged to pay out £100 if somone fufilled their offer

Question 11

is statement of price an offer or an invitation to treat?

Answer 11

ITT

Question 12

gibson v manchester city council

Answer 12

• gibson wanted to buy his council house and the council replied saying they. may. be prepared to selll him the propoerty sand states the price and asked him to make an application
• after submitting the application an election changedover councillers whor emoved the buy your council home scheme. only those with contracts pending will go ahead
• ruled that gibson was no in a contract as the statement of price by the council was an invitiation to treat and gibson submitting an apllication was an offer

Question 13

can you make conditions on the acceptance

Answer 13

no an offer must be accepted exactly as it is made for acceptance to be valid

Question 14

what is the difference between executed and executory. considerations

Answer 14

• executed: when something has been done or given
• executionary: something has been promised to be done or given in the future

if i pay you £5 to wash my car tomorrow my consideration is executed and your is executionary.

Question 15

how are considerations in business situations different

Answer 15

• although work hasn’t been done yet and there has been a promise to pay for it it is understood the work will be paid for

Question 16

caseys patents case

Answer 16

casyworked on intentions that were patented. by 2 othermen
- the men said that in consdieration of caseys hard work they woyld give him third interest in the patents
- by nthe timecasey tried to enfroce this one of the men had died and the other refused

• unlike in theMcArdle case in a business situation it is not reaonsbale to expect people to work for nothing oshe was succsessful

Question 17

example of case of consdieration having to have value but not be accurate

Answer 17

chapelle and co v Nestle
- chappelle owned copyright to music used by. nestle to advertise
- nestle began a promotion that was if you send us 3 nestle wrappers you geta cd with songs on
- chapelle and co argued that this was making a sale as people had to buy 3choclate bars to get it and therforethey. should be paid some money for their music.

• the courts agreed that becuase neslte were asking for the wrappers which were payed for that there was sufficient consdieration and they had to pay chapelle copyrigth fees

Question 18

why did merit v merit constitute a legally binding contract?

Answer 18

because they were seperated they were no longer in a friends of family situation

Question 19

who dont have the capacity to enter agreements?

Answer 19

• minors
  if an agreement if made between an adult and a minor the adult is obliged to carry out promise but child is not
  can enter ‘beneficial contract of service’ to get a job-under the age of 18
• mentally incompetant
• intoxicated