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Contract 1 > Agreement > Flashcards

Agreement Flashcards

1
Q

Requirements for a binding contract

A
  • offer and acceptance
  • intention to create legal relations
  • consideration
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2
Q

What must the oferror show to be legally bound?

A

an intention

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3
Q

Unilateral contract

A

One party makes an offer or proposal in terms which call for an act to be performed by one or more other parties.

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3
Q

Bilateral contracts

A

Each party assumes an obligation to the other party by making a promise to do something, such as to sell an item to the other party in exchange for a payment

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4
Q

Requirements for a valid offer

A
  • certainty
  • intention to be bound
  • clear
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5
Q

What case was held to be a unilateral contract instead of an invitation to treat?

A

Carlill v Carbolic Smoke Ball

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6
Q

4 contexts of invitation to treat

A
  • advertisement
  • displays of goods
  • invitations to tender
  • auctions
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7
Q

What is an invitation to treat?

A

First step in negotiations, which may or may not lead to a firm offer by one of the parties.

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8
Q

General rule regarding advertisements

A
  • they are regarded as statements inviting further negotiations or invitations to treat
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9
Q

General rule of display of goods for sale

A

price-marked goods displayed in a shop window are not an offer for sale but an invitation to treat

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10
Q

Invitations to tender

A

used where a party (usually a co or a public body) wishes to purchase a major item or service

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11
Q

General rule of auction sales?

A

the auctioneer’s request for bids is an invitation to treat - the bidder makes an offer which the auctioneer is then free to accept or reject

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12
Q

auctions ‘without reserve’ (reserve price)

A

the seller promises to sell to the highest bidder whatever that bids turns out to be

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13
Q

Which of the following is correct in relation to an invitation to treat?

A. An invitation to treat cannot be accepted to form a binding contract

B. An invitation to treat can be accepted to form a binding contract

C. An invitation to treat is the final step in forming a contract

D. An invitation to treat displays an intention to be bound

A

A

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14
Q

Which of the following is not an invitation to treat?

A. A car advertised for sale on a website

B. A dress displayed for sale in a shop window

C. A notice on a tree offering a reward for the return of a missing cat

D. An auctioneer’s request for bids in an auction sale

A

C

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15
Q

3 ways an offer can be terminated

A
  • rejection
  • lapse
  • revocation
16
Q

The general rule that an advertisement is an invitation to treat does not apply where the advertisement amounts to a unilateral offer. What is a unilateral offer?

A. An offer that originates from a manufacturer of goods.

B. An offer which prescribes an act which, when performed, constitutes acceptance.

C. An offer to one party only.

D. An offer that is not sufficiently clear and certain.

A

B

17
Q

Termination by rejection

A

once an offer is rejected, it cannot then be accepted - it does not take effect until it is actually communicated to the offeror
- counter-offer are a form of rejection

18
Q

How does lapse terminate an offer?

A
  • passage of time
  • death of one of the parties
19
Q

lapse - passage of time circumstances

A
  1. where acceptance is not made within the period prescribed by the offer
  2. where no period is prescribes and acceptance is not made within a reasonable time
20
Q

lapse - death of the party

A

death of the offer will lapse

death of the offerree - cause the offer to lapse

21
Q

termination by revocation

A

the offeror may withdraw (revoke) their offer at any time before acceptance
however, once a valid acceptance has been made, the offeror is bound by the terms of their offer. offer cannot be revoked after acceptance

22
Q

is communication essential for revocation?

A

no, effective even if communicated by a third party

23
Q

what are the rules of revoking a unilateral contract?

A
  • can be revoked unless offeree has partly performed condition
  • implied obligation not to revoke once party has partly performed
24
Q

What are the 4 aspects of communicating unequivocal acceptance to an offer?

A

1- acceptance must be in response to an offer
2- acceptance must be unqualified (counter-offer / further info req)
3- may be necessary to follow prescribed mode of acceptance
4- acceptance must be communicated

25
Q

How can the prescribed mode be made mandatory?

A

offeror prescribes a mode of acceptance
it excludes all other options and is mandatory

26
Q

What is the meaning of the rule that acceptance must be unqualified?

A

The acceptance must correspond with the offer

27
Q

what is the effect of a counter-offer?

A

the original offer is terminated

28
Q

A farmer telephones his neighbour on Monday and offers to sell him three ducks for £50. The neighbour responds that he will pay £40 for the ducks. Later that evening, the neighbour informs his brother of the farmer’s offer. The brother immediately telephones the farmer and informs him that he accepts the farmer’s offer. On Tuesday morning, the neighbour telephones the farmer and says he has changed his mind and he accepts the offer of £50. Is there a contract formed?

A. Yes, there is a contract formed on Tuesday between the farmer and his neighbour for £50.

B. Yes, there is a contract between the farmer and his neighbour for £40.

C. Yes, there is a contract between the farmer and the brother because the brother accepted the farmer’s offer.

D. No, there is no contract between the farmer and the brother because the farmer did not accept the brother’s offer.

A

D

29
Q

What are the 4 aspects of communicating unequivocal acceptance to an offer?

A
  • acceptance must be communicated
  • acceptance must be in response to the offer
  • acceptance must be unqualified
  • it may be necessary to follow a prescribed mode of acceptance
30
Q

When is acceptance applied?

A

from the moment it is communicated

31
Q

When is an offer deemed accepted by post?

A

from the moment the letter of acceptance is properly posted (put in a letter box or in hand post operative)

32
Q

In what circumstances (4) does the acceptance via postal rule not apply?

A
  1. if not contemplated post would be used
  2. to letters revoking offers
  3. if incorrectly addressed
  4. if misapplied by offeror
33
Q

In which contract does the communication of acceptance gets waived?

A

unilateral contract

33
Q

What does the rule for communication by instantaneous mean (telephone, email)?

A

acceptance takes place at the moment the acceptance is received by the offeror

33
Q

What test does the court apply to determine whether the parties have reached an agreement on all material terms?

A

an objective test, asking whether the parties have agreed all the terms they considered to be a precondition to
creating legal relations.

Contract 1 (14 decks)

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