Offer and Acceptance

Question 1

What is a contract?

Answer 1

A contract is a legally enforceable agreement between two or more parties where each assumes a legal obligation that must be completed

Question 2

What are the types of contract? BUMIE

Answer 2

Bilateral
Unilateral
Multilateral
Implied Contracts
Expressed Contracts

Question 3

What is a unilateral contracts?

Answer 3

• In a unilateral, or one-sided, contract, one party, known as the offeror, makes a promise in exchange for an act (or abstention from acting) by another party, known as the offeree

Question 4

WHat is a bi-lateral contracts

Answer 4

An agreement formed by an exchange of a promise in which the promise of one party is consideration supporting the promise of the other party.
A bilateral contract is distinguishable from a unilateral contract, a promise made by one party in exchange for the performance of some act by the other party

Question 5

What are the rules of formation of a contract?

Answer 5

• An agreement
• Consideration
• Intention

Question 6

What is the definition of agreement

Answer 6

• An agreement is mutuality between parties

Question 7

What is a consensus ad idem

Answer 7

• Meeting of the minds (also referred to as mutual agreement, mutual assent or consensus ad idem) is a phrase in contract law used to describe the intentions of the parties forming the contract. It refers to the situation where there is a common understanding in the formation of the contract.

Question 8

Consideration

Answer 8

• This is where both sides are said to give something in bargain

Question 9

Quid pro quo

Answer 9

• In common law, quid pro quo indicates that an item or a service has been traded in return for something of value, usually when the propriety or equity of the transaction is in question. A contract must involve consideration: that is, the exchange of something of value for something else of value

Question 10

Intention

Answer 10

• It must be the intention of both parties to be legally bound to the agreement

Question 11

Offer

Answer 11

• An offer has been described as an unconditional statement of a person’s intention to
• be bound by the terms of the offer made and thus the intention to contract with the other party

Question 12

Who is an offeror?

Answer 12

The person making an offer// MAKES THE OFFER AND PUTS FORWARD THE TERMS BY WHICH HE INTENDS TO BOUND

Question 13

Who is an offeree

Answer 13

• A person to whom an offer is made //THE PERSON TO WHOM THE OFFER IS MADE AND WHO ACCEPTS THE TERMS UPON WHICH SAID OFFER IS MADE

Question 14

What is an invitation to treat?

Answer 14

An invitation to a party to make an offer to buy as distinct from an offer

Question 15

CARLIL V THE CARBOLIC SMOKE BALL CO LTD {1893

Answer 15

This case is an example if inviration to treat and mere puffs

Question 16

What are the rules in communicating an offer?

Answer 16

• Rule 1 : The offer must be communicated to the offeree ( TAYLOR V LAIRD)
• Rule 2. An offer can be made to one person but it can also be made to the whole world ( CARLIL V CARBOLIC SMOKE BALL CO)
• Rule 3 :The offeree must have clear knowledge of the existence of the offer for it to be valid and enforceable (CARLIL V CARBOLIC SMOKE co)

Question 17

What is certainity of contract

Answer 17

Terms of the offer must be certain. Where the words of an offer are too vague then
the parties cannot be certain of the precise character of the agreement, which will be
unenforceable as a result.

GUTHING V LYNN (1831)
This concerned an agreement for the sale and purchase of a horse. A promise was also
made to pay an extra £5 ‘if the horse is lucky’. It was held that this could not be an offer. It
was too vague. There was no way of determining what exactly ‘lucky’ meant and therefore
the parties could not be bound by the promise.

Question 18

Revocation of contract

Answer 18

• It is possible to withdraw an offer, at any time before the offer is accepted
(Routledge v Grant (1828) 4 Bing 653)
• The offeror must communicate the withdrawal of the offer to the offeree
(Byrne v Van Tienhoven (1880) 5 CPD 344)
• Communication of the withdrawal of the offer can be made by any reliable third party (Dickinson v Dodds (1876) 2 ChD 463)
• A unilateral offer cannot be withdrawn while the offeree is performing
(Carlill v The Carbolic Smoke Ball Co [1893] 1 QB 256)

Question 19

An offer ends when:

LAPD

Answer 19

An offer ends:
•	on lapse of time 
•	on acceptance
•	on proper withdrawal
•	on death of one of the parties

Question 20

What are the rules to consideration

Answer 20

THE BASIC RULES OF CONSIDERATION

• A consideration need not be adequate but it must be sufficient.
• Adequacy speaks to whether or not the parties are promising things of fairly equal value.
Freedom of contract allows the parties to decide whether or not there is adequacy. Thomas v
Thomas [1842] 2 QB 851

• Sufficiency requires that what is promised must be real; tangible; and possess some actual
value. White v Bluett [1853] LJ Ex 36, Word v Byham [1956] 1 WLR 496, Chappell v Nestle Co. [1960] AC 87

•Even things of no apparent value may be classified as consideration

Edmonds v Lawson [2000] 2 WLR 1091, Williams v Roffey Bros & Nicholls Contractors Ltd.
[1990] 1 All ER 512
Alliance Bank Ltd. V Broom [1864] 2 Drew & Sm 289

Question 21

What is Capac

Answer 21

• Capacity is the legal status to be able to enter contracts

Question 22

There are three classes of people that may be affected by capacity

Answer 22

• Minors
• Drunk
• Mental
  (WHEN THE CONTRACT IS FORMED NOT DURING PERFORMANCE OR AFTER)

Question 23

How does the Family Law Reform Act 1969 affect capacity

Answer 23

• After this law introduced the term minor and moved the age from 21 to 18

Question 24

The three categories of minor contracts are:

Answer 24

4. The three categories of minor contracts are:
   - Contracts that are valid and therefore enforceable against the minor.
   - Contracts that the minor may enter but can also back out of if required and which are therefore voidable.
   - Contracts that are unenforceable against the minor and which in practical terms therefore may be difficult for him or her to make

Question 25

What are necessaries good?

Answer 25

Goods which a minor needs and which are appropriate to his station in life so that the seller can enforce a reasonable payment for the goods The common law, then, traditionally accepted that minors should pay for those goods and services that are actually supplied to them and that are classed as ‘ necessaries ’ both The goods or services must be necessary according to the ‘station in life ’ of the particular minor. CHAPPLE V COOPER (1844)

Question 26

Ultra Vires

Answer 26

When a corporation goes beyond its capacity to act in making transactions then it is said to act ultra vires (beyond its powers). This could traditionally be unfair on a party contracting with a company that was deemed by company law rules to know of the company’s capacity to contract RE JON BEAUFIRTE LTD (1953)

Question 27

Express term

Answer 27

A term of the contract agreed by the parties in advance

Question 28

Implied terms

Answer 28

``` A term that is implied into a contract rather than being included by either party ```

Question 29

What are trade puffs?

Answer 29

by, among others, advertisers of products or services. They are often nothing more than a catchy gimmick used in order to highlight the product that is being sold ( Carlil v CCarbolic)

Question 30

What is simplex commendation non obligat is applied?

Answer 30

No obligations are created because no reliance can be | placed upon them.

Question 31

Pinels Case hold what principle

Answer 31

This held that payment of a smaller sum than the debt itself on the due date can never relieve the liability of the debtor to pay the whole debt, so the creditor can always sue for the balance of the debt which is unpaid. D C Builders v Rees [1965] 3 All ER 837

Question 32

What are the types of Misrepresentation

Answer 32

Fradulent - Innocent - Negligent

Question 33

What is Res Extincta

Answer 33

The mistake concerns the existence of the subject matter itself

Question 34

What is Res SUA

Answer 34

- Who owns the subject matter at the time of contract

Question 35

What are the types of mistakes CUM

Answer 35

Common Unilateral Mututal

Question 36

Non Est factum

Answer 36

Non Est factum • Mistake concerns nature of the document being signed • The document is (i) materially different to what it was represented to be; (ii) there is no negligence by the person signing it. If both are present then there is an ‘operative mistake’ – the contract is void – but if not then there is no effect on contract. (Saunders v Anglian Building Society)

Question 37

Mutual Mistake

Answer 37

both parties made a mistake not at the same time - The class of mistake - The character of the mistake - The legal consequences of the mistake

Question 38

Res Extincta

Answer 38

(Couturier v | Hastie)

Question 39

res sue

Answer 39

mistake as to quality (Bell v Lever Bros

Question 40

De minimis non curat lex

Answer 40

de minimis non curat lex (this means in effect that the law | will not grant a remedy for something that is too trivial).

Question 41

Postal Rule

Answer 41

It is an exception because, where the post is used, it is possible for the contract to be formed even if the letter of acceptance is in fact never received

Question 42

What is time of essence in contract

Answer 42

Performance within a reasonable time A Time is of the Essence clause may mean that one party to the contract must perform its contractual obligations at a specific date and time as required in order to compel performance by the other party to the contract. A failure to perform by the time specified will be a material breach of the contract

Question 43

What is privity of contract

Answer 43

the requirement that to be capable of suing or being sued under a contract a person must actually be a party (privy) to that contract

Question 44

Promissory estoppel

Answer 44

Finally, by the equitable doctrine of promissory estoppel, where the party waiting for performance has agreed to waive rights under the contract, knowing that the other party is relying on this promise to forgo performance, then the party making the promise may be prevented from going back on the promise.

Question 45

Void contract

Answer 45

An agreement made that is legally unenforceable

Question 46

Voidable contract

Answer 46

``` An equitable right to avoid obligations under a contract because of a vitiating defect ```