01. STUDY MANUAL questions on Contract formation. Flashcards
A purported contract in which there is clear agreement between the parties on all terms and they intend to create a legally binding agreement but there is no consideration is …
void
A purported contract between parties, one of whom is aged 17 is …
voidable
A purported contract which is an agreement to defraud HMRC is …
void
A purported contract made orally providing for Graham to pay Harry the debt owed to Harry by Imran is …
unenforceable
Bianca sees the following notice in a newspaper “20 orthopaedic beds, £100 each.” Under contract law this would be deemed an …
invitation to treat
T/F: The postal rule applies to acceptance.
TRUE
T/F: The postal rule applies to revocation.
FALSE
T/F: £10 and the loan of a car is sufficient consideration in return for the loan of that car.
TRUE
T/F: after Barry had cleaned the car, he could not offer to do so as consideration to support a future contract.
TRUE
T/F: The loan of a car for a week rather than a day is sufficient consideration to support the waiver of the £5.
TRUE
Barry was not entitled to a week’s hire, only a day’s.
T/F: acquaintances cannot form a valid contract.
FALSE
Subsequent haggling over delivery (does / does not) allow the terms of a valid contract for sale to be varied.
does not
T/F: if delivery is neither expressly mentioned nor implied in a contract for sale then the vendor can demand additional consideration.
TRUE
Standard form contract.
A document put forward for a customer’s signature by a supplier of goods in which pre-printed contractual terms are set out.
A document put forward for a customer’s signature by a supplier of goods in which pre-printed contractual terms are set out.
Standard form contract.
A valid contract MUST contain …
an agreement (offer and acceptance)
consideration
an intention to crate legal relations
T/F: a voidable contract is not a contract at all
FALSE
it is a contract however one party may set it aside
A … contract is binding unless and until one party chooses to avoid it.
voidable
A voidable contract is binding …
unless and until one party chooses to avoid it.
An … contract is valid but the parties cannot be held to its terms.
unenforceable
An unenforceable contract is valid but …
the parties cannot be held to its terms.
A … contract is not a contract at all. Neither party is bound.
void
A void contract is …
not a contract at all. Neither party is bound.
In the law of contract the circulation of a price list is …
an invitation to treat.
As a general rule, acceptance must be …
communicated to the offerror and is not effective until this has been done.
An … is a definite promise to be bound on specific terms.
offer
An offer is
… a definite promise to be bound on specific terms.
An offer must be distinguished from both a … and an …
supply of information, invitation to treat
A counter-offer acts as a … of the original offer.
rejection
see Hyde v Wrench.
T/F: advertising an auction is an offer to sell.
FALSE
see Harris v Nickerson.
The three classic examples of invitations to treat are …
advertisements (although not those offering a reward)
goods on display, for example on a shelf or in a shop window
price lists and catalogues
T/F: As a general rule, silence cannot constitute acceptance.
TRUE
see Felthouse v Bindley.
Postal rule.
An offer is deemed to be accepted as soon as an offeree places written communication of acceptance into the postal system; provided that it is properly stamped and addressed and written acceptance is in the reasonable contemplation of both parties.
An offer is deemed to be accepted as soon as an offeree places written communication of acceptance into the postal system; provided that it is properly stamped and addressed and written acceptance is in the reasonable contemplation of both parties.
Postal rule.
Terminations of offer …
Acceptance
Rejection
Revocation
Counter offer
Lapse of time
Failure of a condition precedent
… consideration is an act in return for a promise.
executed
Executed consideration is …
an act in return for a promise.
… consideration is a promise in return for a promise.
Executory
Executory consideration is …
a promise in return for a promise.
T/F: Past consideration, as a general rule, is not sufficient to make a promise binding.
TRUE
see re. McArdle and Roscorla v Thomas
Consideration need not be … but it must be …
adequate, sufficient
see Thomas v Thomas and Chappell v Nestle.
T/F: A promise of additional reward for existing duties is not generally binding.
TRUE
see Ward v Byham, Collins v Godefroy, Glasbrook v Glamorgan
T/F: in the context of contractual considerations, payment of a lesser sum cannot be satisfaction for the whole sum unless something is added to it, such as earlier payment, or payment by a different method.
TRUE
see Pinnel and Foakes v Beer
Governing clause.
An express clause typically incorporated into an international contract and which specifies which country’s law will apply to any dispute under it.
An express clause typically incorporated into an international contract and which specifies which country’s law will apply to any dispute under it.
Governing clause.
A governing clause is also known as a … clause.
choice of law
T/F: Where a contract is in writing the court will never allow the parties to rely on any terms that are agreed between them but not embodied in the contract.
FALSE
If it can be shown that the document was not intended to comprise all the agreed terms then orally agreed terms may be relied upon.
See SS Ardennes
The general rule regarding orally agreed terms outside a written contract is…
that they cannot be admitted to add to, vary or contradict written terms.
T/F: an agreement NOT to pursue a legal action can be valid consideration.
TRUE
forebearance of an existing right
(presuming that no duress exists e.g. D&C v Rees)
T/F: A ‘tenancy’ agreement between parents and child involving a separate property and a written contract is likely to be deemed legally binding.
TRUE
there is probably sufficient evidence to rebut the presumption that it is not in a social, domestic or family arrangement.
T/F: As a general rule, a party can recover goods from a third party where the contract turns out to be void.
TRUE
T/F: As a general rule, a party can recover goods from a third party where the contract turns out to be voidable.
FALSE
T/F: In order to be legally binding, a contract for the sale of goods must be in writing.
FALSE
T/F: A consumer credit agreement, governed by the Consumer Credit Act 1974, must be in writing.
TRUE
A contract for the transfer of land …
must be in writing.
A debt guarantee …
must be in writing or evidenced in writing.
T/F: An advertisement in a newspaper can never constitute a valid offer, as it is merely an invitation to treat.
FALSE
see Carlill v Carbolic
T/F: An offer can be made to the world at large.
TRUE
see Carlill v Carbolic
Goods on a market stall are …
invitations to treat.
A counter offer …
is a rejection of the original offer.
T/F: As a general rule, is revocation sent by letter effective on posting?
FALSE
the postal rule applies only to acceptance, not to revocation.
T/F: Must a revocation be made expressly in precisely the same manner as the original offer in order to be effective?
FALSE
In terms of acceptance of offer, silence …
can not constitute a valid acceptance.
see Felthouse v Bindley
The ‘postal rule’ does not apply when the offeror …
demands acceptance ‘in writing’.
T/F: An offeror can impliedly waive the need for acceptance to be communicated to him.
TRUE
see Carlill v Carbolic
T/F: If an offeror sends an offer by letter but does not prescribe a particular method for
communicating acceptance, the offeree is obliged to reply by the same method.
FALSE
