Agreement Flashcards
What is a contract?
An agreement giving rise to obligations which are enforced or recognised by law
What is the purpose of a contract?
- Risk allocation
- Establishing obligations
- Creation of certainty
- Determination of outcome in the event something goes wrong
What is an offer?
An expression of willingness to contract on specified terms with the intention that it is to become legally binding as soon as it is accepted by the party to whom it is addressed.
Which case displays the difference between an offer and an invitation to treat?
Gibson v Manchester City Council; Storer v Manchester City Council
What is an invitation to treat?
An expression of willingness to enter into negotiations with the hopes that it will lead to a contract at a later date
What is the difference between an offer and an invitation to treat?
Difference in intention- did the statement maker intend his statement to be binding upon acceptance without further negotiations, or did he intend for the statement to be a part of the continuing negotiation process?
What is estoppel?
Representor is prevented from going back on his representation where the representation is acted upon, and to the detriment of the representee (Detrimental reliance)
What does it mean to ‘snatch a bargain’?
Where the offeree knows that the offeror is suffering from a mistake as to the terms of the contract
What are the rules concerning snatching a bargain?
There is no contract where the offeree is aware that the offeror is suffering from a mistake
Which case illustrates snatching a bargain?
Hartog v Collins & Shields
What qualifies as a mistake?
A mistake relating to the terms, not the facts of an offer
What is the general rule for the existence of a valid acceptance?
An acceptance to an offer in accordance with the mirror image rule
What is the mirror image rule?
A clear and unequivocal offer must be matched by an equally clear and unequivocal acceptance
Which case reflects the mirror image rule?
Hyde v Wrench
Butler v Ex Cell O Corp
What is a counter-offer?
An acceptance seeking new terms
What are the implications of a counter-offer?
A counter-offer kills off the original offer, incapable of acceptance.
What is acceptance?
An unqualified expression of assent to the terms proposed by the offeror.
What was the conclusion in Hartog v Colin & Shields?
The claimant could not have thought the offer had matched the defendant’s intention- claimant unauthorised to ‘snatch a bargain’
What is a battle of the forms case?
Where both parties reasonably believe their terms are the ones governing the contractual relationship
Why has the mirror image rule been criticised in it’s application to battle of the forms cases?
It encourages business people to exchange their standard terms of business in hopes of getting the ‘last shot’ in, placing the party in receipt of the last communication in a difficult position.
What are the 3 interpretations for the objective test establishing existence of an agreement?
- Standard of detached objectivity
- Promisee objectivity
- Promisor objectivity
What is the general rule for the display of goods?
Fisher v Bell; Pharmaceutical Society of GB v Boots Cash Chemists- DOG is an invitation to treat, rather than an offer
What was the conclusion in Pharmaceutical Society of GB v Boots Cash Chemists?
An offer is made by the customer which may be accepted by the shopkeeper
What is the general rule for adverts?
Partridge v Crittenden- A newspaper advert is an invitation to treat rather than an offer
Why is the general rule that an advert is not an offer?
If adverts=offers, sellers would be contractually obliged to sell more goods than he owned
What is the general rule for auction sales?
The auctioneer, by inviting bids to be made, makes an invitation to treat. The bidder makes an offer which is accepted when the auctioneer strikes table with the hammer
What happens if an auction is without reserve?
The auctioneer makes an offer that the sale is without reserve which is accepted by the highest bidder- Barry v Davies
What type of contract is there between the auctioneer and bidder?
A collateral contract
What is the general rule regarding tenders?
Invitation to tender is an invitation to treat. An offer is made by the one submitting the tender, accepted by the one inviting tenders Harvela Investments v Royal Trust Co
Does acceptance have to be made via words?
Acceptance can be made by conduct if it is clear that the offeree did the act in question with the intent (objectively assessed) of accepting the offer- Day Morris Associates v Voyce
To which extent does acceptance by conduct extend to?
Once conduct is proved to equal acceptance, acceptance extends to all the terms of the offer- Arcadis Consulting v AMEC
What is the general rule for communication of acceptance?
Acceptance must be communicated to the offeror (Entores v Miles Far East Corp)
What is a tender?
The process whereby businesses require specific skills. for a project/goods/services
What was held in Harvella Investments v Royal Trusts Co?
A referential bid subverts the purpose of an auction
What ends an offer?
Revocation, Rejection, Counter-offer, Request for further information, Lapse of Time,
What is the rule for acceptance in ignorance of the offer?
Not entitled to sue-Gibbons v Proctor; R v Clarke
What is the general rule where the offeror does not prescribe a specific mode of acceptance?
A court will bound the offeror by an acceptance made in a form no less advantageous than the one he prescribed (Manchester Diocesan v Commercial)
What is the general rule for acceptance by silence?
Felthouse v Bindley- silence cannot amount to an acceptance unless conduct gives rise to the inference that the silence=acceptance
What is required by the offeree where they accept via silence?
Some positive action
What is the postal rule?
Acceptance takes place when the letter of acceptance is posted by the offeree- Adams v Lindsell
What is the justification of the postal rule?
By prescribing a mode of acceptance, offeror has chosen to start negotiations and assumed the risk of delay
When is the postal rule applicable?
Where it is reasonable to use post - Henthorn v Fraser
What if the letter gets lost in the post?
The contract is concluded when it is posted, not when it reaches the offeror (Household Fire Insurance v Grant)
What is a unilateral contract?
A contract whereby one party promises to the other a sum of money or some act if the other party will do or refrain from doing something
What is the leading case for unilateral offer?
Carlill v Carbolic Smoke Ball
What was established in Carlill v Carbolic Smoke Ball?
Acceptance can be made by fully performing the act
What is the general rule for unilateral offers?
Daulia v Four Milbank- the offeror is entitled to require full performance of the condition he has imposed. There is an implied obligation on the offeror to not prevent the condition becoming satisfied which must arise as soon as the offeree starts to perform
What was held in Errington v Errington?
A uniltateral offer cannot be revoked once the couple embarked upon performance
What is consideration?
