1.1 Formation of a contract

Question 1

What are the four principal elements of a contract

Answer 1

offer
acceptance
intention to create legal relations
consideration

Question 2

tender is a

Answer 2

written or formal invitation to supply goods or services

Question 3

an offer needs to be

Answer 3

specific, comprehensive and capable of acceptance

Question 4

if a letter is correctly addressed and posted, when does acceptance take place

Answer 4

at the point of posting (not at the point of when it is received by the offeror)

Question 5

when does the postal rule apply

Answer 5

from the point that the offer is posted. Must be posted in a mailbox that is correctly addressed. If the letter is displayed then the postal rule does not apply

Question 6

past consideration is

Answer 6

no consideration unless it was (exceptions):
-done at the request of the promisor
-the parties understood that the act was to be remunerated
- the payment was promised in advance

Question 7

Can a unilateral offer be revoked once the offeree has started performing the act?

Answer 7

No, once the offeree has started performing the act in a unilateral contract, the offer cannot be revoked.

Question 8

What happens if an offer is revoked after the offeree has already posted their acceptance letter?

Answer 8

If the acceptance letter was posted before the revocation was communicated, the contract is still valid because the acceptance is deemed effective once posted. Unless they have made a mistake on the acceptance and put the wrong address

Question 9

A varriation in a contract requires (in terms of consideration)

Answer 9

fresh consideration - think of the £1 fee in confidentiality agreements

Question 10

Mirror image rule

Answer 10

For an acceptance to be valid, it must match the offer exactly

Question 11

Promissory estoppel is

Answer 11

A promise not to enforce contractual rights which is given without consideration. It can be used where certain conditions are met.

Question 12

CRIPE

Answer 12

The requirements of promissory estoppel

C: Clear and unequivocal promise – The promise must be clear and specific.
R: Reliance – The promisee must have changed their position based on the promise.
I: Intended to be binding – The promise must be made with the intention to be legally enforceable.
P: Promissory estoppel can only be used as a defense – It cannot form the basis of an action.
E: Equitable conduct – The promise must be made equitably, and it would be unfair for the promisor to go back on it.

Question 13

Intention to create legal relations

Answer 13

element for a contract to be binding.
Social/domestic agreements are presumed not to be legally binding, while commercial agreements are presumed to be
binding

Question 14

What is the “battle of the forms” in contract law?

Answer 14

The “battle of the forms” occurs when two businesses try to contract using their own terms. The principle applied is “the last shot wins”, meaning the terms of the last offer accepted by both parties govern the contract.

Question 15

Capacity is

Answer 15

Necessary to enter into a contract. There are some groups: minors, substance abusers and those with a mental incapacity that cannot enter into a contract

Question 16

Minors and the rules around capacity

Answer 16

Minors, those under the age of 18, are generally not bound by contracts they have entered. They can repudiate a contract.

Except, contracts for necessaries this means goods or services that are for the minor’s benefit (phone contract or clothes).

Guarantee of a minor’s obligations is enforceable against another party if it is just and equitable