Formation of a Contract (wk 4)

Question 1

what is a contract?

Answer 1

legally binding agreement, with legal enforceable obligations

Question 2

Features of a contract?

Answer 2

• Consensus in Idem: both agree on the same thing, otherwise the contract is not valid.
• Consent
• Capacity: age, mental ability, intoxication
• Void: no contract ever existed
• Voidable: valid until set aside by court

Question 3

what is an Offer?

Answer 3

a clear statement of terms/ a proposal, legally binding once accepted by both parties

Question 4

what is an Invitation to Treat?

Answer 4

stage of negotiation before an Offer is made.

Question 5

Fisher v Bell (1961)

Answer 5

Mr Bell displayed knife in shop window with price tag. Under law, illegal to “offer for sale” for such items. Court ruled displaying goods in shop window is not an offer but an invitation to treat.

Question 6

Termination of a Contract? (5/8)

Answer 6

• Performance of obligation: obligations have been performed by both parties
• Confusion: owe obligation to sell
• Compensation: set off against one another
• Delegation: another takes over the obligation
• Payment: obligation to pay money rather than acting

Question 7

Revocation of Offer?

Answer 7

Offer can be withdrawn before existence. Implied by action.

• counter offer: change terms instead of accepting
• time limit for acceptance expires
• not accepted within a reasonable time