1. Agreement Flashcards
What is an offer in contract law?
An expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed.
What does the term ‘expression’ mean in the context of an offer?
It may take many different forms, such as a letter, newspaper advertisement, email, text message, and even conduct, as long as it communicates the basis on which the offeror is prepared to contract.
What does the term ‘intention’ mean in the context of an offer?
It does not necessarily mean the offeror’s actual intention. The courts adopt what is primarily an ‘objective’ approach to deciding whether there was agreement between the parties. The courts look at what was said and done between the parties, from the point of view of a ‘reasonable person’, and try to decide what a reasonable person would have thought was going on.
Who can accept an offer?
A person can only accept an offer that was addressed to them.
What is an invitation to treat?
Preliminary statements inviting negotiation which a party cannot agree to create a binding contract.
Is ‘good on display’ an offer or an invitation to treat?
It is an invitation to treat - an invitation to select goods and browse in a store.
What is an invitation to treat in a shopping scenario?
It is an invitation to select goods and browse in a store but no obligation to buy anything.
What is the difference between an invitation to treat and an offer in advertisements?
Goods or services advertised are an invitation to treat, while adverts of a reward are offers - promise to pay a reward if a condition is met.
What is a unilateral contract?
It is a contract where only one party makes the promise - promise to pay a reward but no specific act binding anyone (if you do X I promise to do Y).
When is an offer accepted in an auction?
An offer is accepted when the gavel goes down and the final bid (offer) is accepted (‘sold!’).
What is the difference between an auction and an invitation to treat?
An auction is an invitation to treat.
What is a unilateral contract in an auction scenario?
An auction can be a unilateral contract if the auctioneer stated that the item on auction will be sold at any amount bid (Barry v Davies) - if an auctioneer does not then sell to the higher bidder they would be in breach.
What is a reserve price in an auction?
It is an agreed price minimum bid between the owner and the auctioneer for expensive assets.
What happens if the bidding does not reach the reserve price in an auction?
The property may be withdrawn from the auction, and the owner suffers no consequences.
What is an invitation to treat in the context of tenders?
It is when businesses contract out services and invite a number of companies to submit tenders for the work.
What is a unilateral contract offer in the context of tenders?
It is when a business makes a specific promise to accept a tender, e.g. lowest tender.
What is acceptance in contract law?
It is an unqualified expression of assent to the terms of an offer.
What are the requirements for acceptance in contract law?
There must be an expression of assent, which is ‘unqualified.’
How must acceptance be communicated in contract law?
It must be communicated by the offeree or their authorized agent, by words or conduct.
What is the acceptance requirement for a unilateral contract?
Acceptance will always be conduct.
Is silence considered acceptance in contract law?
It depends on the context.
What is a unilateral contract?
Acceptance will always be conduct.
What is the meaning of ‘unqualified’?
A conditional response cannot amount to acceptance and create a contract.
What is a counter-offer?
The offeree imposes a condition on their acceptance, which destroys the original offer and represents a new offer that the other party is free to accept or reject.
What is the postal rule?
A letter of acceptance will be effective when posted even if the letter is lost in the post.
