SQE2 Contract Existence Flashcards
Was there an offer?
- clear and certain language
- not invitation to treat - Presumption to create legal relations
- is it domestic/social or commercial
- has this been rebutted by objective and unambiguous evidence - Has offer been communicated
Has offer terminated?
- Has it been revoked
- directly/indirectly communicated - Rejected
- Counteroffer
- Lapse of Time
- specified or reasonable time - By operation of law
- death of a party
- destruction of subject matter
- illegality - Failure of any condition of offer
Has this been prevented
- Acceptance
- by postal rule
- by performance if unilateral offer
- by performance if no prescribed mode - Collateral Contract
Has offer been accepted?
- Has prescribed mode been used
- or no less advantageous if not clear language excluding other modes - Is it a response to the offer
- from person (agent) offer was made to - Is it unqualified
- if not then counter offer (meaning rejection)
When does postal rule apply?
Acceptance by post
- creates contract at moment of posting (in a post-box or hand of qualified postman)
Exception
- letter not properly addressed
- it was not reasonable to use use post (clear language excluding other methods)
- postal rule is expressly dis-applied in offer
- Instantaneous Communication
- does not apply
- effective on delivery
Has there been good consideration?
- Is it past
- unless understanding there would be payment
- unilateral contract - Is it sufficient
- has some value in law - Moves from promisee
- maybe through agent - Is it existing obligation
- not good unless exception - Is it part-payment of debt
- not good unless exception - Promissory Estoppel
- only as defence
Do parties have capacity to enter contract?
- Minor
- voidable unless:
- necessary goods
- employment contract to their benefit
- can ratify when 18 - Incapable/intoxicated
- voidable if:
- other party knew they were incapable
- except necessary goods at reasonable price
- can ratify when capable
Test for when someone lacks capacity to enter contract
Means they are unable to:
- understand the relevant information
- retain the relevant information
- use the relevant information; or
- communicate the decision
When can existing obligation be used as consideration?
- If agree to go beyond original obligation.
- If performance of original obligation confers practical benefit
- If existing obligation is to 3rd party
Can consideration be past?
No, generally must be in future, unless:
- Unilateral Contract
- Implied Understanding
- act at promisor’s request
- parties understood it would be remunerated
- would be legally enforceable had it been made in advance
When can part payment of debt be used as consideration?
- Disputed in Good Faith
- Where debt is of uncertain value
- Debtor is providing consideration by agreeing to pay something - Unliquidated Claims
- Where amount owed is uncertain - Payment at different place or earlier or by different means
- Creditor get lesser amount but benefits from being paid earlier or in different place or in other form - Third party makes payment
- Composition with Creditor
- An agreement between debtor in financial difficulty and all their creditors that debtor will pay an agreed amount in satisfaction of all their debts
What are the factors in promissory estoppel?
- Shield not a Sword
- only defence, not cause of action - Clear and unequivocal promise from promisor not to rely on existing legal right
- must be intended to affect legal relations - Inequitable to go back
- does party seeking to rely on it have clean hands - Can come to end if periodic and:
- reasons ceases
- promisor gives reasonable notice of intention to resume
Is there privity between parties?
- Original Contracting Parties
- 3rd Party under Contract Rights of 3rd Parties Act 1999
- can only have and enforce benefit
When can third party enforce contract
- Contract Expressly Provides or it appears term appears to intend to allow them to; AND
- 3rd party expressly named or part of class expressly named
- need not exist at time
NOT IF
- Employment contracts
- Articles of association
- If contract expressly excludes
How can Contract Rights of 3rd Parties Act 1999 effect the variation or recession of contracts?
Parties cannot change the contract to the detriment of the third party if:
1. 3rd party has communicated his agreement to the term benefiting him
- 3rd party has relied on term
- promisor is aware; or
- could reasonably expected to have foreseen they would rely
When might an agent be liable for the contract entered into for principle?
- If they act outside power given by principle (then liable for that)
- Principle is undisclosed to other party
