Formation Flashcards
(38 cards)
What is a contract?
A legally binding agreement between type of more people, it has four elements; offer, acceptance, consideration and intention
What are the two types of contract?
Unilateral and Bilateral
What is a unilateral contract?
Only one party has an obligation, the contract can be made to the whole world (e.g lost cat poster)
What is a bilateral contract?
Both parties have an obligation to fulfil, most common type of contract
What is an offer?
A set of terms in which you intend to be bound by, must be willing
What must an offer be? name the key case
Must be certain and fully communicated (Gibson v MCC)
What is the rule on information in an offer?
A request for information and a reply is not an offer (Harvey v Facey)
What is an ITT? name the three types
a willingness to begin negotiations;
-Advert
-Auctions
-Something on display
What is the rule on something on display in a shop? name the key case (ITT)
Fisher v Bell - held it is not an offer, instead the customer makes and offer which the shopkeeper can accept/reject
What is the rule on auctions? name the key case (ITT)
BCA v Wright - held the bidders make offers which the auctioneer can accept/reject
What is the rule on adverts? name the key case (ITT)
Partridge v Crittenden - held not an offer unless it is made to a specific group of people, or if it is a unilateral contract (Carlill v Carbolic Smokeball)
What are the six ways an offer can come to an end? name the key cases
-Revocation (Dickinson v Dodds)
-Rejection (Stevenson v McClean)
-Counter offer (Hyde v Wrench)
-Lapse of time (Ramsgate Victoria Hotel)
-Acceptance
-Death
What is the rule on revocation of an offer? name the key case
offer can be withdrawn at any time before it has been accepted, but this must be communicated to the oferee, can also be revoked by a reliable third party (Dickinson v Dodds)
What is the rule on rejection of an offer? name the key case
must be clear and not a request for more information - if the offeree attempts to make an offer after rejection they are making a new offer (Stevenson v McClean)
What is the rule on counter offers? name the key case
It ends the original offer and creates a new one, any counter must be communicated to be effective (Hyde v Wrench)
What is the rule on lapse of time of an offer? name the key case
Must be a reasonable amount of time if no limit is specified (Ramsgate Victoria Hotel)
What is the rule on death for an offer?
If the offeror dies, acceptance can still take place until they learn of the death - if an offeree dies then it automatically ends
What is the second element of a contract?
Acceptance - an agreement to all the terms of the offer and becomes valid as soon as it is communicated through a positive act
What rule did Felthouse v Bindley set on acceptance?
Can be in any form except silence, and Carlill v Carbolic Smokeball held a unilateral contract are accepted by positive conduct
What was held in the postal rule? name the key case (acceptance)
Adams v Lindsell - will take effect as soon as it has been posted; must be expected method of communication, stamped and correctly addressed, with proof of postage
What was held with the electronic rule? name the key case (acceptance)
Entores v Miles Far East - takes effect when received, phone is instant but must be heard, out of hours communication will take place the next day
What is the third element of a contract?
Consideration - the price for which the promise has been bought, the ‘value’ in the contract, must be a benefit and detriment on both parties (Currie v Misa)
What are the two types of consideration?
Executory - a promise to the future
Executed - already carried out
What are the key rules on consideration?
It must be sufficient/real, so that it has value (White v Bluett), however it does not need to be adequate (good deal) (Chappell v Nestle)
