Formation Of A Contract

Question 1

What’s a contract

Answer 1

A legally binding agreement between two parties where consideration is given and offer and acceptance takes place. There must be intention to create legal relations

Question 2

The offer

Answer 2

Must be genuine
Suggestion or proposition from one party to another. (Courts will only recognise an offer as being valid if it was intended as an offer)
-can be implied or express

Question 3

Fisher v bell

Answer 3

Items on a shop shelf are an invitation to treat

Question 4

Partridge v crittenden

Answer 4

Adverts are an invitation to treat

Question 5

Harvey v facey

Answer 5

Reply to a request for information is not an offer

Question 6

Unilateral offer

Answer 6

• one sided offer
• promise to give someone something if they complete an act
• no obligations

Question 7

Carlil v carbolic smoke ball

Answer 7

Unilateral offer example case

Question 8

Bilateral offer

Answer 8

• both parties make a promise to each other
• a mutual agreement
• if one side doesn’t complete their part other party doesn’t have to either

Question 9

Thornton v shoe lane parking

Answer 9

Offer can be made by a machine

Question 10

How can an offer end

Answer 10

Acceptance
Revocation
Rejection
Lapse of time
Death by person who made the offer

Question 11

Routladge v grant

Answer 11

Even if an offer was said to be open for a period of time it can still be revoked if it wasn’t accepted

Question 12

Dickinson v Dodds

Answer 12

Revocation can be communicated by a third party. Can also be conduct

Question 13

Hyde v wrench

Answer 13

Counter offer amounts to a rejection of the original offer

Question 14

Ramsgate Victoria hotel

Answer 14

Long delays between offer and acceptance can amount to time lapse.

Question 15

Acceptance

Answer 15

The offered must accept the exact terms proposed by the offer or unconditionally, also known as the mirror image rule.

Question 16

The postal rule

Answer 16

• acceptance is complete immediately after the letter has been posted
• usual method of communication must be postal
• letter has been properly addressed and stamped
• proof of postage is required

Question 17

Thomas v solicitors

Answer 17

Emails: acceptance is when received by offerer not when sent

Question 18

Felthouse v bindley

Answer 18

Silence cannot be considered as acceptance

Question 19

Holwell securities v Hughes’s

Answer 19

Acceptance must be in method stipulated. In this case it was written

Question 20

Intent to create legal relations

Answer 20

• commercial contracts
• social and domestic contracts

Question 21

Jones’s v vernon pools

Answer 21

Binding in honour only, not legally binding
- gentleman’s agreement

Question 22

Balfour v Balfour

Answer 22

Agreement was made before the divorce and it was seen as a social agreement and not legally binding

Question 23

Merritt v Merritt

Answer 23

Agreement made after the divorce, it was legally binding

Question 24

Simpkins v pays

Answer 24

3 people payed 1 person to enter a competition, judge said it was more than a social agreement so they had to split the winnings

Question 25

Wilson v Burnett

Answer 25

3 ladies played bingo together they always split the winnings. One of them won a really big sum and the other two kept asking if she was gonna split the money. Judge said because they kept asking it was not a legally binding agreement in the first place

Question 26

Parker v Clarke

Answer 26

Couple made a large financial decision over a promise of another, because of how big of a decision they made relying on the promise it was seen as legally binding

Question 27

Types of consideration

Answer 27

Executed and executory

Question 28

Executed consideration

Answer 28

Consideration has been carried out

Question 29

Executory consideration

Answer 29

A promise to perform acts in the future

Question 30

Thomas v thomas

Answer 30

Consideration needs not be adequate but must be sufficient

Question 31

Chappel v nestle

Answer 31

A chocolate wrapper seen as enough consideration

Question 32

White v bluett

Answer 32

Sufficient consideration can’t be a promise not to do something

Question 33

Re mcardle

Answer 33

Past consideration is not good consideration

Question 34

Exception to past consideration

Answer 34

If there was an expectation at the time the act was carried out

Question 35

Stilk v myrick

Answer 35

Performing an existing duty is not seen as good consideration for a new contract

Question 36

Hartley v ponsonby

Answer 36

Performing an existing duty cannot be good consideration for a new contract

Question 37

Williams v roffey bros

Answer 37

If claimant is avoiding a detriment it could be good consideration

Question 38

Foakes v beer

Answer 38

Part payment of a debt is not good consideration

Question 39

High trees case

Answer 39

Cannot go back on promise if that promise had been relied on Introduced: promissory estoppel