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ICAEW Law: QB2020 > 01: Contract formation. > Flashcards

01: Contract formation. Flashcards

1
Q

T/F: a partnership agreement must be in writing or evidenced in writing.

A

FALSE

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2
Q

T/F: a contract for the sale of goods must be in writing or evidenced in writing.

A

FALSE

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3
Q

T/F: an agreement for the transfer of land must be in writing or evidenced in writing.

A

TRUE

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4
Q

T/F: an employment contract must be in writing or evidenced in writing.

A

FALSE

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5
Q

An agreement for the transfer of land …

A

must be in writing or evidenced in writing.

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6
Q

If a party enters into a contract as a result of undue influence …

A

then they may elect to avoid the contract.

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7
Q

A contract where one party may set it aside, but property transferred before avoidance is usually irreecoverable from a third party.

A

voidable

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8
Q

One party may set a voidable contract aside, however …

A

property transferred before avoidance is usually irreecoverable from a third party.

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9
Q

T/F: In order to be enforceable a credit guarantee can be oral provided it is evidenced in writing.

A

TRUE

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10
Q

T/F: In order to be enforceable a credit guarantee can be oral only.

A

FALSE

it can be oral provided that it is evidenced in writing.

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11
Q

T/F: In order to be enforceable a credit guarantee must be by deed.

A

FALSE

it can be oral provided that it is evidenced in writing.

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12
Q

T/F: In order to be enforceable a credit guarantee must be in writing.

A

FALSE

it can be oral provided that it is evidenced in writing.

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13
Q

A person returning a lost dog, uknowing of a reward being offered …

A

is not entitled to the reward.

One cannot accept an offer of which one is not aware.

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14
Q

T/F: An offer must be made to an identifiable class of persons.

A

FALSE

A ‘reward offer’ can be made to the world at large.

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15
Q

A flyer advertising wines is …

A

an invitation to treat.

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16
Q

T/F: A flyer advertising wines is an offer capable of acceptance.

A

FALSE

It is an invitation to treat.

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17
Q

A newspaper advertisement is usually …

A

an invitation to treat.

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18
Q

T/F: An offer is terminated by rejection.

A

TRUE

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19
Q

T/F: An offer is terminated by counter offer.

A

TRUE

see Hyde v Wrench

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20
Q

T/F: An offer is terminated by the satisfaction of a precondition.

A

FALSE

an offer may be terminated by the FAILURE of a precondition.

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21
Q

T/F: An offer is terminated by a lapse of time.

A

TRUE

a reasonable time. See Ramsgate v Montefiori

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22
Q

A response to an offer involving the words “will only buy if …” is likely to be deemed a …

A

counter offer

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23
Q

A response to an offer ASKING about payment terms is likely to be deemed …

A

a request for information.

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24
Q

A response to an offer TELLING the offerror of acceptable terms is likely to be deemed a …

A

counter offer

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25
Q

A response to an offer ASKING the offerror about acceptable terms is likely to be deemed a …

A

request for information

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26
Q

T/F: An offer remains open even if the offeror buys a similar item from an alternative supplier.

A

TRUE

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27
Q

T/F: An offer explicitly stating that it is open for say, three months, cannot be revoked within that period.

A

FALSE

an offer may be revoked at any time prior to acceptance

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28
Q

T/F: The postal rule applies to acceptance.

A

TRUE

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29
Q

T/F: The postal rule applies to revocation.

A

FALSE

it applies only to acceptance.

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30
Q

The postal rule applies only to …

A

acceptance.

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31
Q

T/F: Acceptance can not be assumed on the part of the offeror.

A

TRUE

see Felthouse v Bindley

32
Q

T/F: Acceptance may be express or inferred from conduct.

A

TRUE

see Brogden v Metropolitan

33
Q

T/F: Acceptance must always be communicated to the offeror in order for it to be effective.

A

FALSE

see Carlill v Carbolic or the ‘lost dog’ cases.

34
Q

In a reward contract the offeror waives their right to …

A

communication of acceptance.

35
Q

T/F: The postal rule applies to revocation of offer.

A

FALSE

it applies only to acceptance.

36
Q

T/F: The acceptance of an offer by email is effective as soon as the ‘send’ key is pressed.

A

FALSE

the law is unclear upon when acceptance by email is effective.

37
Q

T/F: The acceptance of an offer by email is effective as soon as it arrives on the recipient’s server.

A

FALSE

the law is unclear upon when acceptance by email is effective.

38
Q

T/F: The acceptance of an offer by email is effective as soon as it has been marked as ‘read’ on the reciever’s mail server.

A

FALSE

the law is unclear upon when acceptance by email is effective.

39
Q

T/F: The law is unclear upon when acceptance by email is effective.

A

TRUE

40
Q

T/F: The postal rule is always available for the acceptance of an offer.

A

FALSE

e.g. an auctioneer accepts an offer by the fall of the gavel.

41
Q

Whether postal acceptance is within the contemplation of both parties is a question of … and may be deduced from all the circumstances.

A

fact

42
Q

Whether postal acceptance is within the contemplation of both parties is a question of fact and may be …

A

deduced from all the circumstances.

43
Q

T/F: If an offeror prescribes a mode of communication of acceptance, only acceptance by this mode is valid.

A

FALSE

provided that the mode used is at least as expeditious as the one specified.

44
Q

T/F: Where no mode of acceptance is specified, the offeror should use the same mode of communication as the original offer.

A

FALSE

any reasonable method may be used.

45
Q

T/F: The use of the words ‘by notice in writing’ means that an oferee must communicate their acceptance by post, the postal rule therefore applying.

A

FALSE

it means that written notice of acceptance must be RECEIVED by the offeror

46
Q

The use of the words ‘by notice in writing’ means that …

A

the offeror must RECEIVE written communication of acceptance of offer.

47
Q

T/F: An oferee can not rely on the postal rule if the offeror has required communication of acceptance ‘by notice in writing.’

A

TRUE

48
Q

The performance of a duty which someone is obliged to perform anyway …

A

can never be sufficient consideration to support a new contract.

49
Q

A good or service represents valid consideration for a debt waiver because …

A

the creditor was not already entitled to it.

50
Q

Early payment represents valid consideration for a debt waiver because …

A

the creditor was not already entitled to early payment.

51
Q

Payment by a third party represents valid consideration for a debt waiver because …

A

the creditor was not already entitled to recieve payment from that person.

52
Q

T/F: the courts will imply a term into a contract if required to do so by statute.

A

TRUE

for example Consumer Rights legislation.

53
Q

T/F: terms may be implied on the basis of a custom or practice of a particular trade.

A

TRUE

see Hutton v Warren

54
Q

T/F: terms may be implied on the basis of business efficacy.

A

TRUE

see ‘The Moorcock’

55
Q

T/F: a party may only enforce a contract if they are entitled to receive a benefit under it.

A

FALSE

only where they have rights of privity.

56
Q

A contract may only be enforced by those with …

A

privity of contract.

57
Q

Terms may only be implied into contracts under the rules of trade custom when …

A

they do not conflict with the express terms of the contract.

58
Q

In social or domestic situations …

A

there is a rebuttable presumption that agreements are NOT entered into with the intention to create legal relations.

Such agreements are NOTvtherefore legally binding contracts.

59
Q

In commercial situations, including employment …

A

there is a rebuttable presumption that agreements ARE entered into with the intention to create legal relations.

Such agreements ARE therefore legally binding contracts.

60
Q

An advert in a newspaper …

A

is an invitation to treat and not an offer capable of acceptance.

61
Q

The postal rule only applies to …

A

acceptance of offer, when such acceptance is in the reasonable contemplation of both parties.

62
Q

Revocation of offer occurs when …

A

it has been Reliably Received.

63
Q

T/F: If a contractual offer is terminated by explicit rejection then it can not be subsequently accepted.

A

TRUE

64
Q

T/F: to be valid a contract must contain written evidence of its terms.

A

FALSE

e.g. buying goods in a shop, riding a bus

65
Q

T/F: to be effective, a revocation of an offer must be in writing.

A

FALSE

66
Q

T/F: effective revocation of an offer can be made by an authorised agent of the offeror.

A

TRUE

67
Q

Consideration that is valid, but done is …

A

executed

68
Q

Consideration that is valid, but not yet done, i.e. a promise is …

A

exectutory

69
Q

‘Individuals and businesses only have rights and obligations under a contract if they are a party to it.’

A

Privity of Contract

70
Q

If a written contract exists then terms outside it will normally not be allowed is known as the …

A

parol evidence rule

71
Q

A … contract is not a contract at all.

A

void

72
Q

Not a contract at all.

A

void contract

73
Q

A … contact is binding unless and until one party chooses to avoid it.

A

voidable

74
Q

A voidable contract is binding …

A

unless and until one party chooses to avoid it.

75
Q

An … contract is valid but the parties cannot be held to its terms.

A

unenforceable

76
Q

An unenforceable contract is valid but …

A

the parties cannot be held to its terms.

77
Q

T/F: the postal rule applies even if the communication of acceptance is lost in the post.

A

TRUE

ICAEW Law: QB2020 (11 decks)

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