2 Agreement Flashcards
Why is the Objective test favoured over the Subjective test?
Accessibility - it is impossible to tell what was in the minds of the contracting parties.
Avoidance of Fraud - relying on an undisclosed intention may promote dishonest.
Certainty - reasonable expectations can be protected by a remedy.
What evidence is used to determine the objective intentions of the parties?
Signed final writing contained in a contractual document. This is the strongest form of evidence.
Unsigned final writing contained in a contractual document.
Other writing or speech.
Non-verbal conduct.
What is an offer and what does it involve?
- A proposal of the terms of the contract.
2. An expression of willingness to be bound once the offeree accepts.
What is an invitation to treat?
An expression of willingness to embark on further negotiations, not to be bound.
Gibson v Manchester CC [1979] represents this; the council’s letter expressly stated that they did not intend to be bound. Contrastingly in Storer v Manchester CC [1974] the letter did.
How does Contract Law view displays and advertisements?
They are only invitations to treat.
An offer is made by the customer when they present their selection for payment - Pharmaceutical Society of GB v Boots Cash Chemist [1953].
If displays were offers then the customer would be bound to acceptance upon picking up an item and vendors would not be able to negotiate with customers.
In what case was an advertisement held to be an offer? Why was this the case?
Carlill v Carbolic Smoke Ball co. [1893].
The company’s advert in the newspaper offered to pay £100 to anyone who caught influenza after using their smokeball in the specified way.
The deposit of £1,000 in the bank to prove sincerity evidenced the fact that the advertisement was a unilateral contract to the whole world as long as the conditions were met.
What is Acceptance and what happens with counter-offers?
An unequivocal expression of consent to the proposal contained in the offer which immediately binds both parties to the contract.
A counter-offer will kill the original offer whereas a request for information or clarification will not.
What is the Battle of the Forms and which case governs it?
In commercial transactions both parties will exchange forms presenting their terms. The rule is that the last form to be presented is the one the parties are bound to.
This was decided in Butler v Ex-Cell-O-Corp [1979].
In what ways can and can-not acceptance be communicated?
Through signature or through conduct is appropriate.
Acceptance cannot be inferred from the offeree’s silence as it is ambiguous and acceptance must be communicated - Felthouse v Brindley [1862].
It would also be unfair to exploit an offeree’s inertia.
What are the rules for acceptance by instantaneous communications (email/text etc.) and post?
For instantaneous communications acceptance takes effect when it comes to the offeror’s attention. Acceptance strictly takes place when a reasonable offeror would access the message.
The Postal Rule maintains that acceptance takes effect when the letter is posted. An offeror cannot revoke his the offeree’s acceptance is posted - Byrne v Van Tienhoven [1880]. Parties can contract out of the postal rul - Holwell Securities v Hughes [1974].
What are unilateral contracts and how are they concluded?
Contracts which involve the exchange of a promise for the completion of an act (not another promise as in a bilateral contract).
Unilateral contracts are only concluded with the stipulated act - Carlill v CSB [1893].
There is an obligation not to revoke a unilateral contract once the offeree has begun performance i.e. started running a marathon etc.
In what situations is an offer terminated?
Revocation of the offer before the offeree communicates acceptance.
Rejection by the offeree.
Lapse of the offer if the spceified date is up or a reasonable period of time passes.
Death of the offeror or offeree.
Give 2 criticisms of the mirror image approach:
Unsuitability: the reliance on offer, acceptance and consideration make the simplest of contracts seem over-complicated.
Insufficiency: the mirror image approach relies upon the enforceability of the contract for it to be a success.
Why is the mirror image approach the favoured one?
Most contracts are susceptible to analysis on offer and agreement.
It provides certainty on the framework used by the courts.
It makes the incorporation of policy considerations flexible.
The model is well established and has case law authority.
What two issues of certainty mean that the contract is not enforceable?
One More Step Problem: The agreement expressly anticipates the need for further agreement.
Fuzziness Problem: Further agreement is implied as the agreement is too vague.
