Agreement Flashcards
What is the requirements of a binding contract?
- Offer and acceptance +
- Intention to create legal relations +
- Consideration
What is the test when determining whether a party had the intention to enter into a contract?
Objective
What are the requirements for a valid offer?
clear and certain offer displaying an intention to be bound
What was the wording in Gibson v MCC that meant there was not a clear offer?
‘may be prepared to sell’
Who must show an intention to be legally bound?
The offeror
What was the wording in Storer v MCC that meant there was an intention to be bound?
‘I will…’
What is a bilateral contract?
Each party assumes obligation to other by promising to do something
What is a unilateral contract?
One party makes an offer or proposal in terms which call for an act to be performed by one or more other parties.
Are there mutual promises in a unilateral contract?
No
What constitutes acceptance of a unilateral offer?
actual performance of the required act
Can an invitation to treat be accepted to form a binding contract?
No
What are four examples of invitations to treat?
Advertisements
Display of goods for sale
Invitations to tender
Auction sales
What is the general rule for advertisments?
regarded as statements inviting further negotiations or invitations to treat
What is the exception where advertisements are treated as an offer?
Unilateral offers
What is the general rule for display of goods for sale?
price-marked goods displayed in a shop window are an invitation to treat +
goods displayed on shelves of self-service store +
websites
Why was an invitation to tender treated as an offer in Harvela Investments?
Undertaking to accept highest/lowest bid
In Blackpool & Fylde v BBC, what were the three requirements creating a binding obligation to consider tenders?
1) solicited from specified parties known to requesting party
2) absolute deadline for submission
3) absolute and non-negotiable conditions for submission
What is the general rule for auctioneer’s requests for bids?
Invitation to treat
When is acceptance in an auction?
Fall of auctioneer’s hammer
What is the exception to auctions being an invitation to treat?
Auctions without reserve
What is the highest bona fide bidder entitled to if goods are withdrawn in an auction without reserve?
Compensation by payment of damages
What ways can an offer be terminated?
Rejection
Lapse
Revocation
Can an offer be accepted after rejection?
No
Can an original offer be accepted after a counter offer is made?
No
Can an original offer be accepted after a request for information is made?
Yes
How may an offer lapse?
Passage of time
Death of a party
How may an offer lapse due to passage of time?
a) acceptance is not made within the period prescribed by the offeror;
b) no period is prescribed and acceptance not made within reasonable time
Will an offer lapse if the offeror dies?
Only if the offeree knows
Will an offer lapse if the offeree dies?
Yes
What can an offeror withdraw an offer?
Any time before acceptance
What must an offeror show to revoke an offer?
Clear intention by words or conduct
When is revocation of an offer effective?
When actual notice reaches the offeree
When can a unilateral offer typically not be revoked?
When the offeree has partly performed obligations and is willing and able to complete
How can a unilateral offer to the whole world be revoked?
offeror takes reasonable steps to bring to attention of all those who read the offer
What are the four rules in relation to acceptance?
Acceptance must be:
1. In response to the offer
2. Unqualified
3. In the prescribed mode
4. Communicated
What is the mirror image rule?
Acceptance must correspond with the exact terms of the offer
When is it mandatory to use a prescribed mode of an acceptance?
- clearly mandatory
- excludes all other options
What mode can be used if there is a prescribed mode but it is not clearly mandatory?
Offeree can use any mode no less advantageous to the offeror
Can an offeror stipulate that silence is acceptance?
No
Can a third party communicate acceptance?
Not without the authority of the offeree if the circumstances indicate that their decision was not yet irrevocable
What is the postal rule?
Acceptance = when properly posted
Does the postal rule apply if the post is delayed or lost?
Yes
When does the postal rule not apply?
- Not reasonable to post (eg prompt acceptance)
- incorrectly addressed
- disapplied by offeror
What is the general rule for acceptance by instantaneous means?
The moment it is received by the offeror
When can an offeror not say that they have not received acceptance even if they haven’t receieved/heard/seen it?
Where the acceptor reasonably believes they have communicated it but hasn’t because of the offeror’s fault
Is communication required for unilateral contracts?
No
What is the test for certainty?
Objective - whether, in all circumstances, parties have agreed all terms they considered to be a precondition to creating legal relations
