Offer, Acceptance, Contractual Intention and Consideration

Question 1

Contract - 4 essential elements

Answer 1

Offer
Acceptance
Consideration
Contractual Intention

Question 2

Definition of Offer

Answer 2

An expression of willingness to contract on specified terms, made with the intention that it Is to become binding as soon as it is accepted by the person to whom it is addressed - Treitel

Question 3

Offer - intention / if questioned

Answer 3

What would a reasonable person think we’re the party’s intentions. No party’s real intentions, as such, but how a reasonable person would view situation - Smith v. Hughes 1871

Question 4

Invitation to treat - may be prepared to sell

Answer 4

Gibson v Manchester City Council 1979 - council house purchase
Partridge v. Crittenden 1968- advertisement

Question 5

Shop window goods not an offer

Answer 5

Fisher v Bell 1961

Question 6

Unilateral contract - made to public at large - acceptance through performance

Answer 6

Carlill v carbolic smoke ball co 1892

Question 7

Bilateral contract

Answer 7

Exchange of promises between parties

Question 8

Auctions - statute sale is complete at fall of hammer

Case law

Answer 8

Sale of goods act 1979 section 57(2)

Warlow v Harrison 1859 - sale of horse won by low bid

Question 9

Termination of an offer- 4 ways

Answer 9

Revocation - withdrawal anytime before acceptance routledge v grant 1828, must be communicated by offeror and received by offeree - Byrne And Co v. Van Tienhove and Co 1880
Rejection- counter offer destroys offer Hyde v wrench 1840
Lapse of time , time clauses will lapse offer. offer made by telegram implies similar speedy reply quenerduaine v. Cole 1883
Occurrence of conditions, car damaged financings ltd v. Stimson 1962

Question 10

Revocation may be communicated by third party

Answer 10

Dickinson v. Dodds 1876

Question 11

Partial performance of unilateral contract may prevent revocation

Answer 11

Errington v. Errington & Woods 1952

Question 12

An inquiry made to an offer may not destroy or be counter offer

Answer 12

Stevenson Jacques v. McLean 1880

Question 13

Acceptance

Answer 13

Must be communicated

Definition- final and unqualified expression of assent to terms of offer- Treitel / unqualified Hyde v. Wrench

Question 14

Mode of acceptance

And if not stipulated

Answer 14

If stipulated this must be clear or equivalent method would be acceptable - Tinn v. Hoffman & Co 1873
Silence does not constitute acceptance - Felthouse v. Bindley 1862
Can occur by conduct - brogden v metropolitan railway co.1877
Not stipulated OK for offers to public at large

Question 15

Postal rule - acceptance

Answer 15

Posted acceptance complete on posting Adams v Lindsell 1818
Must be properly stamped and addressed London v. Northern bank ex party Jones 1900 or Holwell - must be reasonable to post and rule can be displaced by offeror
Notice to - displaces / Holwell securities ltd v Hughes 1974

If not apply must be made clear

Question 16

Electronic communication - acceptance

Answer 16

Acceptance takes place when communication received - Entorres Ltd v Miles Far East Corp 1955
Or where acceptance could reasonable have been expected to be read brinkbon ltd v stahag stahl 1983

Question 17

Electronic communication sent in normal hours

Answer 17

Deemed accepted or withdrawal of offer effective on receipt

Question 18

Acceptance issues resolved

Answer 18

By looking at the intention of the parties

Question 19

Consideration

Answer 19

A benefit and or detriment - Currie v Misa 1875
Exchange of promises
Price one party pays for the other party’s promise- Dunlop pneumatic tyre co ltd v selfridge and co 1915

Question 20

If no consideration must be

Answer 20

In the form of a deed to be binding - signed and delivered

Question 21

One sided consideration =

Answer 21

A gift

Question 22

Consideration does not need to be adequate but

Answer 22

Must be sufficient

Chappell and co v nestle 1960

Question 23

General rule past consideration is

To apply it

Answer 23

Not consideration - re mcardle 1951- decorating

Done at promissory request - lampleigh v braithwait 1615
Parties understood act was to be rewarded
Payment was legally enforceable

Question 24

Existing duties not consideration

Answer 24

Imposed by law - collins v godefroy 1831, testify in court- England v Davidson 1840 paid as reward

Contractually obliged via 3rd party - Scotson v pegg

Contractual duty owed to other party- stilk v myrick 1809 - not pay sailors
But Williams v roffey 1991 - did pay decorators additional benefit distinguished i.e practical benefits

Question 25

Generally part payment of debt

Answer 25

Not consideration unless some other payment / early - known as pinnels case 1602 and confirmed in foakes v beer 1884

Question 26

Promissory Estoppel - no consideration And requirements

Answer 26

Equitable doctrine- central London property trust ltd v high trees house ltd 1947 - rent halved during war times No consideration giving for promise acted upon. Valid Shield not a sword as defence only Suspends rather then extinguishes Must have clean hands Requirements - 1- pre existing contract or legal obligation modified 2- clear unambiguous promise 3- change of position 4- inequitable to allow promissor to go back on promise

Question 27

Contractual intention - domestic

Answer 27

Contractual intentions not assumed If considerable money ci assumed Balfour v Balfour 1919 - husband and wife - rebuttable presumption no valid consideration Merritt v Merritt 1970 - already separated so distinguished from above - consideration valid signed agreement to pay mortgage

Question 28

Contractual intention - commercial

Answer 28

Contractual intentions assumed - Edwards v skyways 1964 courts reluctant to overturn presumption esso petroleum ltd v commissioners of customs and excise 1976 To not be binding must expressly agree clearly not - rose & frank ltd v crompton bros 1925

Question 29

Privity in contract

Answer 29

General rule no third parties can acquire rights to contract - Dunlop v selfridge 1915 Exceptions - under statute - contracts (rights of third parties) act 1999 Passes benefit not detriment Third party may enforce term is expressly stated Must be identified by name or particular class

Question 30

Breach of contract occurs

Answer 30

When either express or implied term broken

Question 31

Remedies for breach of contract - 6

Answer 31

``` Damages Termination Action of an agreed sum Specific performance Injunctions Restitution ```

Question 32

Classification of damages in contract

Answer 32

Unliquidated- damages have to be assessed by courts as not clearly defined Liquidated - damages agreed in contract set amount

Question 33

Types of damages in contract

Answer 33

General - losses can't be precisely quantified (inconvenience/disappointment) Special - damages that can be quantified (loss. Earnings profit) Nominal - breach of contract but minimal loss - small amount usually

Question 34

Assessment of damages in contract

Answer 34

Expectation loss basis - usual way Robinson v harman 1848 - damages to put party in position would have been had contract been performed Ruxley electronics and construction ltd v Forsyth 1996 - swimming pool - loss of amenity new pool would be 22k but court awarded 2.5k Reliance loss basis- position innocent party would have been in had contract not made

Question 35

Other factors breach of contract

Answer 35

Must look to mitigate losses | Remoteness

Question 36

Remoteness in contract

Answer 36

Hadley v baxendale 1854 - establish two limbs- mill owner did not have a spare shaft 1) Loss which arises naturally within breach will normally be within parties contemplation 2) unusual losses will only be within parties contemplation if special circumstances known to parties at time contract made

Question 37

Terminate contract

Answer 37

Condition is broken or innominate term broken and the effects are major. If contract performed to a satisfactory standard termination unlikely possible Termination must be communicated Affirmation - innocent party must confirm he wants contract to continue and both parties must continue to perform duties.

Question 38

Contract - action of an agreed sum

Answer 38

Work done to satisfactory standard Payment is due but no payment Contractor can bring action for agreed sum

Question 39

Contract - specific performance

Answer 39

Order of the court to compel party to perform contractual obligation Not available :- if damages adequate Where required continuous supervision of court Employment contracts Must be equitable

Question 40

Contract - injunctions And key cases

Answer 40

Either prohibitory or mandatory Warner brothers pictures incorporated v Nelson 1937 - prevent working for another film company - deemed fair as could work just not filming Page one records v Britton 1968 - manager could be replaced so deemed not fair as would prevent work

Question 41

Contract - restitution

Answer 41

Total failure of consideration - money paid but nothing done Some work would be quantum meriut No contract but some work done - British steel corp v Cleveland bridge and engineering co led 1984 Surrey county council v bredero homes 1993 - profit as a result of breaking contract - built additional houses only nominal awarded

Question 42

Discharge of a contract - 3 ways

Answer 42

By agreement - if all parties agree must be accord and satisfaction = consideration By performance - doctrine of complete performance / cutter v Powell 1795 died on ship widow not paid By breach - breach of condition or breach of innominate term if effects major

Question 43

Express terms - contract

Answer 43

Specifically Incorporated to contract

Question 44

Implied terms

Answer 44

Not specifically incorporated but implied either by case law or statute

Question 45

Implied terms by case law - 4 categories

Answer 45

Custom or trade usage - Hutton v warren 1836 Previous course of consistent dealings - spurring v Bradshaw 1956 Presumed intention of the parties - att-gen for Belize v Belize telecom ltd 2009 Implied because of the type of contract - Liverpool city council v Irvin and others 1977

Question 46

Four main acts of Parliament that apply to contracts

Answer 46

Sale of goods act 1979 Supply of goods and services act 1982 Consumer rights act 2015 Unfair contract terms act 1977

Question 47

Sale of goods act 1979 - key sections

Answer 47

Section 8 - if not stated or ascertainable buyer must pay reasonable price Section 13 (1) - goods will correspond with the description - implies to sales in course of business or private - strict liability Section 14 - only applies to sales in the course of business - strict Section 14(2) goods supplied are of a satisfactory quality Section 14(2a) meet the standard a reasonable person would regard as satisfactory Section 14 (3) goods supplied should be reasonable fit for that purpose - if notified to seller Section 15(a) non consumer buyers lose right to terminate if breach so slight unreasonable to reject

Question 48

Sale of goods act 1979 - remedies

Answer 48

Consumer Reject goods and recover money Claim damages 6 month limit to reject for non perishable Also right to repair, replacement or price reduction Business Under s13 and 14 right to reject goods lost if slight so unreasonable to reject and depend if condition or warranty Also both s 35 - right to reject lost if accepted and held for beyond reasonable time

Question 49

Supply of goods and services act 1982 - main sections | I

Answer 49

S 3 (2) - goods will correspond with description - all times Everything else in course you of business S 4 (2) - goods supplied are of satisfactory quality S4(5) - goods will be fit for purpose made known S 13 - supplier will carry out service with reasonable care and skill S 14 - will carry out service within a reasonable time S 15 - implies term of reasonable price if not stated

Question 50

Consumer rights act 2015 -key provisions

Answer 50

``` In relation to goods S9 - satisfactory quality S10 reasonably fit for purpose S11 to be as described S 20 - 22 a short term right to reject S 23 right to repair or replacement S 24 right to price reduction or final right to reject In relation to services S49 service to be performed with reasonable care and skill S50 information is binding S51 reasonable price to be paid S52 within reasonable time S56 right to price reduction ```

Question 51

Classification of terms in contract

Answer 51

Condition - major - root of contract party can terminate and clam damages Warranty - minor - can't terminate just claim damages Innominate - either way - objective test would a reasonable person think condition or warranty

Question 52

Cases - Innominate terms

Answer 52

Hong Kong fir shipping v Kawasaki kisen kaisha 1962 - 20 week ship repairs on two year contract not substantial s not deprived of all contract

Question 53

Trade usage and commercial expectation

Answer 53

If terms common traditionally regarded as a condition

Question 54

Express provision by parties

Answer 54

If used in strict legal sense court must give effect to intentions - Lombard north central v butterworth 1987

Question 55

Counter offer - case

Answer 55

Hyde v wrench 1840