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Contract > Formation > Flashcards

Formation Flashcards

1
Q

4 elements needed for a contract

A

Offer
Acceptance
Intention to create legal relations
Consideration

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2
Q

Advertisements

A

General rule - invitations to treat
Exception - Unilateral offers (an ad. can constitute an offer to the world).
Exception - Advertisement of reward will be classes as an offer

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3
Q

Self - service and shop windows

A

General rule - invitations to treat. The contract is formed when the goods are presented at the desk

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4
Q

Auctions

A

General rule - Invitations to treat
Exception - an auction without reserve is an offer to sell to the highest bidder and creates a unilateral contract

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5
Q

Invitations to tender

A

General rule - invitations to treat
Exception - person making the tender states they will accept highest offer or to accept lowest offer = offer

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6
Q

Mere statements of price

A

General rule - invitation to treat
Exception - the form of words used can render it sufficiently precise to be an offer capable of acceptance

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7
Q

Communication of offers

A

MUST be communicated to the offeree

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8
Q

Termination of offers - revocation - General rule

A

An offer can be revoked at any time before acceptance

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9
Q

Termination of offers - revocation - Exception

A

Paying a deposit (consideration) - usually can’t revoke

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10
Q

Termination of offers - revocation - Communication - General rule

A

Revocation must be communicated

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11
Q

Termination of offers - revocation - Communication - Exception

A

Revocation is effective if it’s left at the last known address and if the offeree simply chooses not to read it. Revocation can be made by a reliable 3rd party

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12
Q

Termination of offers - revocation - Offer made to the public

A

To revoke an offer made to the public - publish a sufficiently prominent notice of withdrawal
Unilateral contract general rule - can revoke until act is complete
Exception - implied promise not to revoke specified act is stated within reasonable

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13
Q

Termination of offers - rejection by the offeree

A

Expressly or implied. E.g suggesting something different - counter offer

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14
Q

Termination of offers - lapse of time

A

Lapse after a reasonable time

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15
Q

Termination of offers - failure to comply with a condition

A

Breach

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16
Q

Termination of offers - death of one of the parties

A

If offeree dies before accepting the offer terminates. However if they die after acceptance it passes to personal representatives

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17
Q

Counter offer

A

Regards acceptance - doesn’t amount to acceptance as it introduces new terms or tries to vary them - invalid

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18
Q

Requests for new information

A

Enquiry which isn’t acceptance but also isn’t a no

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19
Q

Standard form contracts

A

Each communication is treated as counter-offers therefore no valid agreement. There is a contract as soon as last forms are sent and no objection to them

20
Q

Tenders

A

Tender submitted for supplying specific goods or services on a specific date or by supplying a specific quantity of goods over a specified period of time

21
Q

Certainty in offer and acceptance

A

Courts may refuse to enforce them if there’s uncertainty

22
Q

Capacity

A

MUST have capacity - minors can enter but can void till they’re 18
Exception - legally binding contracts on minors e.g work, service and apprenticeship

23
Q

Minors - Clothes and resale

A

Contract for supply of clothes and resale are trading contracts and therefore do not bind minors

24
Q

Minors - phone and lessons

A

These are contracts for necessities and are therefore binding

25
Q

Communication of acceptance - General Rule

A

Acceptance has no effect until communicated

26
Q

Communication of acceptance - Silence

A

Silence cannot amount to acceptance

27
Q

Communication of acceptance - unilateral contracts

A

No need for communication

28
Q

Communication of acceptance - Conduct

A

If parties act as though there is a contract then they’ve accepted through behaviour

29
Q

Communication of acceptance - Stipulated methods of acceptance

A

If the offer stipulates a particular method of acceptance then any other method used is invalid

30
Q

Communication of acceptance - Postal rule

A

An exception to the general rule that acceptance must come to the attendance of the offeror before it is valid
General rule - acceptance by post takes effect upon posting rather than delivery
To apply must satisfy:
- Must have been requested
- Must be stamped and addressed
- Must be posted
- Must not have been excluded
- Must not create inconvenience or absurdity

31
Q

Communication of acceptance - instant messaging

A

Communications within office hours = actual communication - accepted once received

32
Q

Intention to create legal relations - Social and Domestic

A

Presumption that there is no intention to create legal relations - can be rebutted

33
Q

Intention to create legal relations - Commercial

A

Presumption that there is an intention to create legal relations - very clear words needed to rebut

34
Q

Intention to create legal relations - advertisements

A

Not generally considered to create legal relations

35
Q

Consideration must be sufficient but need not be adequate

A

To be sufficient must be tangible, real and valuable. Doesn’t have to adequately reflect the value of the promise. Doesn’t just mean money. Promising to give up a liberty won’t suffice

36
Q

Consideration must not be past

A

General rule - Promise cannot be made after an act is done
Exception - 3 conditions: act must be done at promisor’s request, parties must have understood at the outset that act was to be rewarded and must be legally enforceable

37
Q

Upwards variation - performance of an existing duty - General rule

A

Attempt to vary price upwards - e.g need more money to complete job. General rule - simply performing an existing contractual duty owed to the other party is insufficient consideration in exchange for a promise to pay more money.

38
Q

Upwards variation - Performance of an existing duty - Exceptions

A

1) If you do something extra - exceed a contractual obligation which you owed me = good consideration for more money
2) If it confers a commercial/practical benefit

39
Q

Downwards variation - part payment of undisputed debts - General rule

A

Price going dow - someone who owes money asks to pay a reduced amount. General rule - part payment of debt is not usually consideration for a promise to forgo balance due.

40
Q

Downwards variation - Part payment of undisputed debts - Defence

A

The party who isn’t paying as much e.g wages or rent can rely on promissory estoppel - means the other party cannot revert back to full pay without notice. Will have to pay arrears/full pay going forwards but they need notice. Defence if you’re being sued for full rent.

41
Q

General rule - Auctions

A

Normally at an auction bids = offers and fall of auctioneer’s hammer = acceptance. This will create a bilateral contract between client and owner.

42
Q

Exception - Auction

A

If it’s stated that ‘goods will be sold that day whatever price is fetched’ or it’s an auction without reserve, this is an offer of a unilateral contract from the auctioneer. It is a promise to sell to the highest bidder, if he doesn’t auctioneer can be sued for breach of unilateral contract and claim damages.

43
Q

Bilateral contract - Definition

A

An agreement between at LEAST 2 people

44
Q

Unilateral contract - Definition

A

An action by one person. E.g ad. for £100 to anyone who finds your dog, you’re the only one who has taken any action as no on person is specifically responsible for finding the dog

45
Q

Elements needed for a binding variation

A

All 4 contract elements - offer, acceptance, intention and consideration

46
Q

Part payment of debt - Exception

A

Provided a debtor gives the creditor something (other than just part payment) in return for creditor’s promise to forgo balance then that something will be consideration. E.g payment in advance E.g something other than money - in addition to money

47
Q

Party binding itself by silence

A

An offeree can bind itself by silence. A party can bind itself to a contract by silence

Contract (12 decks)

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