Agreement

Question 1

Requirements for a binding contract

Answer 1

• offer and acceptance
• intention to create legal relations
• consideration

Question 2

What must the oferror show to be legally bound?

Answer 2

an intention

Question 3

Unilateral contract

Answer 3

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

Question 3

Bilateral contracts

Answer 3

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

Question 4

Requirements for a valid offer

Answer 4

• certainty
• intention to be bound
• clear

Question 5

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

Answer 5

Carlill v Carbolic Smoke Ball

Question 6

4 contexts of invitation to treat

Answer 6

• advertisement
• displays of goods
• invitations to tender
• auctions

Question 7

What is an invitation to treat?

Answer 7

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

Question 8

General rule regarding advertisements

Answer 8

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

Question 9

General rule of display of goods for sale

Answer 9

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

Question 10

Invitations to tender

Answer 10

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

Question 11

General rule of auction sales?

Answer 11

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

Question 12

auctions ‘without reserve’ (reserve price)

Answer 12

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

Question 13

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

Answer 13

A

Question 14

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

Answer 14

C

Question 15

3 ways an offer can be terminated

Answer 15

• rejection
• lapse
• revocation

Question 16

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.

Answer 16

B

Question 17

Termination by rejection

Answer 17

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

Question 18

How does lapse terminate an offer?

Answer 18

• passage of time
• death of one of the parties

Question 19

lapse - passage of time circumstances

Answer 19

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

Question 20

lapse - death of the party

Answer 20

death of the offer will lapse

death of the offerree - cause the offer to lapse

Question 21

termination by revocation

Answer 21

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

Question 22

is communication essential for revocation?

Answer 22

no, effective even if communicated by a third party

Question 23

what are the rules of revoking a unilateral contract?

Answer 23

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

Question 24

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

Answer 24

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

Question 25

How can the prescribed mode be made mandatory?

Answer 25

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

Question 26

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

Answer 26

The acceptance must correspond with the offer

Question 27

what is the effect of a counter-offer?

Answer 27

the original offer is terminated

Question 28

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.

Answer 28

D

Question 29

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

Answer 29

- 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

Question 30

When is acceptance applied?

Answer 30

from the moment it is communicated

Question 31

When is an offer deemed accepted by post?

Answer 31

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

Question 32

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

Answer 32

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

Question 33

In which contract does the communication of acceptance gets waived?

Answer 33

unilateral contract

Question 33

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

Answer 33

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

Question 33

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

Answer 33

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