Legally enforceable agreement (Offer and acceptance)- FS

Question 1

What are the three core elements required to form a legally binding contract?

Answer 1

A valid contract requires:
(1) Agreement (offer and acceptance), (2) Consideration
(3) Intention to create legal relations.

Question 2

What test is used by courts to determine whether a contract exists between two parties?

Answer 2

The objective test: Would a reasonable person conclude from the parties’ conduct and words that they intended to create legal relations?

Question 3

What makes an offer legally valid in contract law?

Answer 3

An offer must be clear, complete, and made with an intention to be bound upon acceptance, with no further negotiation anticipated

Question 4

What distinguishes an offer from an invitation to treat?

Answer 4

An offer shows a clear intention to be bound, whereas an invitation to treat is merely an invitation to negotiate or receive offers.

Question 5

What is the legal status of most advertisements under contract law?

Answer 5

Generally, advertisements are invitations to treat, not offers, as they lack the intent to be bound and could result in over-acceptance.

Question 6

What exception allows an advertisement to be treated as a binding offer?

Answer 6

When an advertisement is clear, specific, and constitutes a unilateral offer that can be accepted by performing a prescribed act.

Question 7

What is a unilateral contract, and how is it accepted?

Answer 7

A unilateral contract involves one party making a promise that is accepted by the performance of a specific act (e.g., returning lost property).

Question 8

What distinguishes a bilateral contract from a unilateral contract?

Answer 8

A bilateral contract involves mutual promises from both parties; a unilateral contract involves only one promise, accepted by performance.

Question 9

How does the case of Carlill v Carbolic Smoke Ball Co illustrate a unilateral offer?

Answer 9

The court held that a public advertisement promising £100 for using a product and falling ill was a unilateral offer, due to its clear terms and deposit of funds showing intent to be bound.

Question 10

In contract law, what is the correct legal classification of the following sequence: Advertisement → Response expressing willingness to pay → Confirmation reply?

Answer 10

The advertisement is an invitation to treat; the response is an offer; and the confirmation reply is the acceptance.