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Contract Law > Agreement > Flashcards

Agreement Flashcards

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1
Q

What four elements are required to form a valid contract?

A
  1. Offer
  2. Acceptance
  3. Intention to create legal relations
  4. Consideration
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2
Q

What is Treital’s definition of an offer?

A

“an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed”

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3
Q

Which two cases tell us an offer must be clear and certain?

A

Gibson v Manchester City Council c/f Storer v Manchester City Council

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4
Q

In determining whether an offer has been made what must we distinguish it from?

A

An invitation to treat, for example a display of goods (Fisher v Bell) or an advert (Partridge v Crittenden).

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5
Q

What three exceptions are there to the general rule that a display of goods or advert is an invitation to treat?

A
  1. Unilateral contract (Carlill v Carbolic Smoke Ball co)
  2. When the person advertising is the manufacturer and can supply goods (Grainger v Gough)
  3. The advert is for tender and explicitly prescribes some criteria eg highest bidder which the offeree may perform (Harvela Investments v Royal Trust Co of Canada c/f Spencer v Harding)
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6
Q

What obligation does an invitation to tender give rise to even if there is no specific criterion eg highest bidder, which an offeree may perform?

A

The obligation to consider the application (Blackpool & Fylde Aero Club Ltd v Blackpool BC)

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7
Q

When is an auctioneer making an offer or making an invitation to treat?

A

Generally speaking they are making an invitation to treat (Payne v Cave) unless the item is being sold without reserve (Barry v Davies).

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8
Q

In Barry v Davies, the auctioneer rejected the claimant’s bid despite there being valid agreement. What did the claimant win in his case?

A

He won the asking price less his bid so he might purchase the goods elsewhere.

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9
Q

Are website adverts offers or invitations to treat?

A

It is presumed they follow the rule in Partridge v Crittenden.

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10
Q

In addition to the offer being clear and certain, what other requirement is there?

A

The offer must be communicated to the offeree (Taylor v Laird).

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11
Q

By what three methods may an offer be terminated?

A
  1. Rejection by the offeree
  2. Revocation by the offeror
  3. Lapse of time
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12
Q

Is it necessary to communicate rejection of an offer to the offeror?

A

Yes, and the postal rule does not apply to rejections.

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13
Q

How did the offeree in Hyde v Wrench reject the offeror’s offer?

A

He presented a counter-offer that did not mirror the exact terms the offeror had made.

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14
Q

In the situation in which two parties continue to offer each other counter-offers, which one wins?

A

The last shot wins (Butler v Ex-cell-o)

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15
Q

What is the difference between a counter-offer and a request for further information?

A

A request for further information does not terminate the offer, but asks for ancillary information (Stevenson, Jacques & Co v McLean).

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16
Q

When is it not possible to revoke an offer?

A

When it has been accepted. In the case of an auction, when the hammer falls (Payne v Cave) and in the case of an option contract when there has been acceptance of the option itself (Routledge v Grant).

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17
Q

Is it necessary to communicate revocation expressly?

A

Yes (Byrne v Van Tienhoven)

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18
Q

Is it possible to revoke an offer via a third party? What criticism is there of the authority to this question?

A

Yes (Dickinson v Dodds). Treital criticises the decision for putting the offeree in a position in which he has to decide whether to believe the third party is genuinely revoking the offer.

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19
Q

Is it possible to revoke a unilateral offer?

A

Yes, the offeror may revoke his offer before it is performed (Great Northern Railway Co v Witham), but the offeror should not obstruct the offeree if he is willing to complete performance (Errington v Errington and Woods).

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20
Q

What term does the case of Daulia v Four Mill Bank Nominees imply into unilateral contracts?

A

An obligation on the offeror not to obstruct the offeree from completing the contract once performance has begun.

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21
Q

How may an offeror revoke a unilateral offer he has made to the whole world?

A

He must take reasonable steps to bring to the attention all those who have read the offer it has been revoked (Shuey v United States).

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22
Q

What are the three ways a contract may lapse?

A
  1. Performance is not completed within the prescribed deadline in the contract or within a reasonable time if there is no prescribed deadline (Ramsgate Victoria Hotel v Montefiore).
  2. Death, in the case of the offeree’s death even if the offeree has representatives there will be no contract (Duff’s Executors’ Case), but if the offeree is unaware of the offeror’s death there may be a contract (Bradbury v Morgan)
  3. A condition precedent is not fulfilled (Financings Ltd v Stimson)
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23
Q

What is meant by the mirror-image rule?

A

The offeree must accept all the terms, express and implied, made by the offeror (Hyde v Wrench).

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24
Q

Which case tells us acceptance may only be made by the person to whom the offer is made?

A

Boulton v Jones

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25
Q

Is it possible to accept an offer through an agent?

A

Yes (Gibbons v Proctor)

26
Q

Is it possible to accept an offer through a third party?

A

Yes, if the third party has been given authority by the offeree to do so (Powell v Lee)

27
Q

What is the authority for there being no acceptance where it was made in ignorance of an offer in existence?

A

R v Clarke

28
Q

Which case tells us that motive is irrelevant to acceptance as long as the person accepting had notice of the offer?

A

Williams v Cawardine

29
Q

Which case tells us that when an award is offered for supplying information in general only the first to supply that information will be awarded?

A

Lancaster v Walsh

30
Q

Which cases tells us that silence cannot be inferred as acceptance but it may be inferred from conduct?

A

Felthouse v Brindley

Taylor v Allon

31
Q

How was acceptance inferred in Brogden v Metropolitan Railway Co and Intense Investments v Development Ventures?

A
  1. Delivery of goods

2. Transfer or loan monies

32
Q

What are the exceptions to the general rule that acceptance must be communicated?

A
  1. Unilateral contracts
  2. Failure of receipt due to the fault of the offeror (The Brimnes; Entores v Miles Far East)
  3. Postal rule (Adams v Lindsell)
33
Q

To activate the postal rule where must you post your letter?

A

Either in a post box or into the hands of a postman authorised to receive (ex p Jones).

34
Q

Does the postal rule apply even if the letter is lost or destroyed?

A

Yes (Household Fire v Grant).

35
Q

In what five different circumstances may the postal rule not apply?

A
  1. If it is unreasonable (Henthorn v Fraser)
  2. If the offeror’s method of communication implies a speedy response is required (Quenerduaine v Cole)
  3. If it would lead to ‘a manifest inconvenience or absurdity’ (Holwell Securities v Hughes)
  4. If the address is wrong and the letter does not arrive in time (Getreide-Import v Contimar)
  5. If the offeror excludes the postal rule (Holwell Securities v Hughes)
36
Q

Is it possible to revoke acceptance by post?

A

It’s debatable. If the revocation can reach the offeror before the acceptance it may be possible (Dunmore v Alexander c/f Thomson v James).

37
Q

What rules did Denning LJ give for instantaneous communication in Entores v Miles Far East?

A
  1. Where acceptance is not received but through no fault of the offeror it is the duty of the offeree to make their acceptance heard.
  2. Where the offeree has reason to believe that receipt is due to the fault of the offeror, then the liability is with the offeror.
38
Q

Which case confirmed Denning’s rules in Entores v Miles Far East?

A

Brinkibon v Stahag Stahl

39
Q

What do the cases of The Brimnes, Thomas v BPE Solicitors, and Mondial Shipping v Astarte say about instantaneous communication and office hours?

A

Emails sent between half five and six pm were within office hours. In Mondial v Astarte a telex sent at 23:41 on a Friday evening was not held to have been received until the following Monday.

40
Q

How can an offeror prescribe a certain mode of acceptance?

A

By stating it explicitly and ousting other forms of acceptance (Manchester Diocesan v Commercial and General confirmed in Tinn v Hoffman).

41
Q

When is their acceptance in an auction?

A

When the hammer falls (s57 SGA 1979 and Payne v Cave).

42
Q

What is the authority for ICLR?

A

Rose and Frank Co v Crompton Bros

43
Q

What are the general rules as to commercial agreements and social/domestic agreements with regards to ICLR?

A

ICLR will be presumed in commercial agreements (Well Barn Farming Ltd v Backhouse) and it is for the defendant to rebut (Bunn & Bunn v Rees & Parker).
ICLR will not be presumed in social/domestic agreements (Balfour v Balfour) .

44
Q

When may the presumption on ICLR as to social/domestic agreements not apply?

A

If husband and wife are no longer living in amity (Merritt v Merritt), or if the agreement is between family if it is sufficiently serious and there is reliance (Jones v Padavatton). If the agreement is between friends there is intention where there is ‘mutuality’ and evidence of previous conduct (Simpkins v Pays).

45
Q

Is it possible for D to rebut the presumption of ICLR in commercial agreements?

A

Yes, but the burden is heavy (Baird v Marks and Spencer plc).

D cannot rely on minor details having been left out (Bunn & Bunn v Rees & Parker) or rely on vague or ambiguous terms within the contract (Edwards v Skyways).

Exceptions, however, include

  1. agreements made in anger or jest (Licenses v Lawson)
  2. comfort letters/policy (Kleinwort Benson v Malaysia Mining), where there is no express or implied promise the policy will remain
  3. agreements made ‘binding in honour only’
  4. ‘subject to contract’ (Chillingworth v Esche)
46
Q

What is meant by doli incapax?

A

A party of an alleged contract did not have the capability of entering into that contract eg minors or a person with mental incapacity.

47
Q

What is the authority that tells us minors are required to pay a reasonable price for necessities?

A

Nash v Inman

48
Q

What is the authority that tells us minors are bound to employment contracts that are to their benefit? Which case clarifies that minors are not bound to contracts attached to their employment contract?

A
  1. Aylesbury FC v Watford FC

2. Proform v Proactive

49
Q

Which case confirms that minors can avoid contractual obligations up until the age of maturity but will not be able to recover anything unless there is been a complete lack of consideration from the other party?

A

Steinberg v Scala

50
Q

Which statutory provision states that a person who temporarily or permanently does not have capacity at the time of contract cannot enter into that contract?

A

Section 2 Mental Capacity Act 2005

51
Q

Section 3(1) Mental Capacity Act 2005 states what is an impairment?

A

(a) inability to understand information relevant to the contract
(b) inability to retain information
(c) inability to weigh information
(d) inability to communicate his decision

52
Q

What does s3(4) MCA 2005 define as ‘relevant information’?

A

Information which would reasonably lead a person to enter into or reject a contract.

53
Q

Under s 7(2) MCA 2005 what is a person with mental capacity still required to pay towards a contract they have entered into?

A

A reasonable price for necessities.

54
Q

Does mental incapacity apply to drunk people?

A

Yes (Gore v Gibson)

55
Q

If the MCA 2005 doesn’t apply what must C prove?

A

He didn’t know what he was doing and the other party knew that C did not understand what he was doing (Imperial Loan v Stone).

56
Q

What kind of contracts can companies not enter into?

A

Contracts outside of their powers (Ashbury v Ritchie).

57
Q

What is Pollock’s definition of consideration? In which case was this taken up?

A

‘An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable’ (Dunlop v Selfridge)

58
Q

What are the three rules for consideration?

A
  1. Consideration must not be past (Roscorla v Thomas)
  2. Consideration must move from the promisee, not a third party (Tweddle v Atkinson)
  3. Consideration need not be adequate but it must be sufficient ‘in the eyes of the law’ (Chappell v Nestle)
59
Q

What is the exception to the rule consideration must not be past?

A

If payment was understood (Lampleigh v Braithwait) and the act was done at the promisor’s request and is not illegal (Pao On v Lau Yiu Long).

60
Q

Why was there no consideration in White v Bluett?

A

A son had given no consideration to his father by promising not to complain.

61
Q

What was the consideration in Hamer v Sidaway?

A

A nephew promised his uncle not to swear, drink, gamble, or smoke.

Contract Law (4 decks)

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