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Contract Law > Agreements > Flashcards

Agreements Flashcards

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1
Q

What does an agreement consist of

A

Offer and acceptance

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2
Q

What is an offer

A

A promise to be bound

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3
Q

What is an invitation to treat

A

Invite to make offer or begin negotiations

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4
Q

Is a reply to an invitation to treat ever an acceptance

A

No it will be an offer or an invitation to treat

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5
Q

Does an offer always need to be communicated to offeree

A

Yes

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6
Q

Does an acceptance always need to be received by offeror

A

Yes
Silence not enough
Postal rule is exception

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7
Q

Dispatch rule / postal rule

A

Acceptance complete as soon as letter posted even if never received

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8
Q

What does the postal rule apply to

A

Acceptance only

Not offer or revoke offer

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9
Q

Can the postal rule be excluded

A

Yes with words such as notice in writing or send your response to

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10
Q

In which jurisdiction is the contract made

A

The jurisdiction in which the offer is received

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11
Q

Can an offer be revoked in a bilateral agreement

A

Before acceptance

Not once it’s accepted

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12
Q

Can an offer be revoked if you promise to keep it open until a certain date

A

Yes unless consideration was provided

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13
Q

Is an offer revoked even if it is communicated through a third party

A

Yes

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14
Q

What is a unilateral agreement

A

Promise in exchange for an act

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15
Q

What is a bilateral agreement

A

A promise in exchange for a promise

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16
Q

What is an acceptance

A

Final, unqualified agreement to all terms of the offer. Must be in response to an offer

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17
Q

Requirements for an acceptance

A

Mirror image rule
Prescribed method rule
Cross offers rule

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18
Q

What is the mirror image rule

A

Acceptance must correspond with the offer. Any new terms makes a counter offer

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19
Q

Effect of a counter offer

A

Eliminates original offer

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20
Q

Is a request for further info a counter offer

A

No

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21
Q

Can cross offers form an agreement

A

No

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22
Q

What is a cross offer

A

Two people offering each other the same thing at the same time but without knowing

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23
Q

What is the prescribed method rule

A

The response must follow any mandatory method of acceptance

If method specified but not mandatory can used another method if fulfils purpose of prescribed method in a way that is no less advantageous

If method was for benefit if offered they can waive benefit and use a less advantageous method

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24
Q

When is a unilateral agreement enforceable

A

When act is performed

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25
Q

What constitutes acceptance for unilateral agreements

A

The performance of the Act

No need to communicate intention to try to perform act

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26
Q

Can a unilateral offer be revoked

A

Yes Any time before performance of even after performance but that might give rise to damages

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27
Q

How to revoke a unilateral offer

A

Same method of communication as used for offer. Doesn’t matter if not seen

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28
Q

What kind of agreement if a promise to accept the lowest tender

A

A unilateral offer which must be upheld

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29
Q

Will courts enforce an uncertain agreement

A

No. It will be void

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30
Q

Will the court ever fill in the gap where an essential term is vague to prevent the contract being void for uncertainty

A

Only if there is a clear commercial practice and the agreement has been relied upon

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31
Q

Can an uncertain term be severed to keep the rest of the contract valid

A

Only if the term is uncertain AND meaningless

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32
Q

When will statute fill in the gaps in a contract

A

Price:
Sale of goods act 1979 s8 goods and s15 services B2B
CRA 2015 s5- services B2C

This applies when the contract is silent as to price and provides for a reasonable price. Does not apply where contract states price but this has failed for some reason

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33
Q

What legal device requires payment for performance under an uncertain contract

A

Quantum meruit

Reasonable value of services

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34
Q

When will quantum meruit apply to an uncertain contact

A

Performance was specifically requested by the other party

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35
Q

Are gratuitous promises enforceable

A

Only if in a deed

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36
Q

When does an agreement become a contract

A

Consideration and intention to be legally bound

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37
Q

What is a formation promise

A

A promise on the formation of a contract

38
Q

What is an alteration promise

A

A promise which alters the terms of an existing contract

39
Q

Effect of a contract made through threats and extortion

A

Voidable. Cannot rescind if affirmed it

40
Q

When if a contract voidable due to economic duress

A

When there is illegitimate threat or pressure vitiating consent

Illegitimate threat or pressure must be reason why they agreed to make the promise

Voidable
Affirmation is loss of resision

41
Q

Is intention to be legally bound presumed

A

In commercial relationships yes

Not in social relationships

42
Q

How to tell if there is intention to be legally bound

A

Certainty of terms and reliance

Would reasonable person think it was binding

43
Q

Is consideration always needed

A

Unless it is a deed

44
Q

What is consideration

A

What is asked for or given in exchange for promise

45
Q

What is the consideration in a bilateral agreement

A

Each party’s promise is the consideration.

Parties are bound on exchange of promises even if they’re not carried out yet

46
Q

What is the consideration in a unilateral contract

A

Performance of requested act is consideration and not bound until performed

47
Q

Does consideration need to match value of promise

A

No, need not be adaquate but must be sufficient

48
Q

What cannot be consideration

A

Sentimental motives
Anything incapable of expression in economic terms
Passed consideration
Performance of existing duty (contractual or legal)

49
Q

Is performance of an existing contract with a third party good consideration

A

Yes

50
Q

Does an alteration promise need consideration

A

Yes unless it is a deed

51
Q

What is consideration for an alteration promise to pay more

A

Go beyond original duty

Factual or practical benefit

52
Q

What is consideration for an alteration promise to accept less

A

Practical or factual benefit

53
Q

Is part payment of debt or part performance of duty consideration for alteration promise to accept less

A

No

54
Q

Elements of promissory estoppel

A

Promise intended to bind and intended to be acted upon
Reliance
Detriment
Inequitable to allow them to go back on promise

55
Q

Can promissory estoppel enforce an alteration promise

A

Sometimes

56
Q

What is doctrine of privity of contract

A

Only the parties to the contract can benefit from the contract, enforce it or rely on it

57
Q

Remedies available to contracting party in respect of wrongs done to a third party

A

Specific performance

Damages

58
Q

What does the contracts ( rights of third parties) act 1999 do

A

Allows contracting parties to confer rights to enforce the contract on a third party

59
Q

When can a third party enforce a contract

A

Expressly provided for in contract or
Contract confers benefit on third party and contracting parties intended the third party to be able to enforce it (silence ok)

Benefit must be a purpose of the bargain not an incidental effect

60
Q

How can a third party be identified in a contract to confer the right to enforce it

A 
Name, class or description 
Need not exist at the time
61
Q

When a third party has the right to enforce the contract can the contracting party alter or recind it

A

Not if third party has
Communicated assent
Relied on it and party is aware
Relied on it and party could be expected for foresee this

62
Q

what sort of test is used to determine if the parties have reached an agreement?

A

objective

63
Q

does consideration need to be adequate

A

no but it must be sufficient (the right type of thing)

64
Q

is performance of a public duty consideration

A

no but exceeding it would be good consideration

65
Q

what is past consideration and is it good consideration

A

it is when the promise of compensation is made after the act was carried out. not normally good consideration but exception if:
done at their request
mutual understanding of some compensation
intention to create legal relations

66
Q

can an individual bring an action in promissory estoppel

A

no - it is a defence only

67
Q

can promissory estoppel end payment plan / on going payment of debt

A

no it can suspend payments but these can restart with reasonable notice. cannot reclaim past payments

68
Q

do you need to have acted on promise to your detriment to rely on promissory estoppel

A

yes not enough just to rely on it but it must also be to your detriment. there must have been a promise to waive strict legal rights.

69
Q

what is an agent

A

someone who has power to change the legal relations of their principal

70
Q

when can an agent bind someone to a deal

A

when they have authority to do so (actual or apparent)

71
Q

when is agency created

A

when the principal gives the agent authority to contract on their behalf

72
Q

what is actual authority (agent)

A

express or implied

what they’ve said or done

73
Q

what is apparent authority (agent)

A

appearance of authority created by principal with intention third party would rely on it and they did alter their position in reliance on it

74
Q

is appearing to have authority enough for apparent authority

A

no

75
Q

does an agent have any rights or obligations in a contract between principal and third party

A

no

76
Q

who is the third party in a contract made by an agent on behalf of a principal

A

third party is the other party to the contract

77
Q

when can a third party acquire rights under a contract

A

when the contract expressly provides they are to benefit or purports to confer a benefit on them
unless contract was not intended to be enforced by third party

78
Q

are minors bound by contracts

A

only for necessaries for condition of life and employment with training if more beneficial than not

79
Q

are mentally incapacitated and drunk people bound by contracts

A

yes unless they were incapable of understanding the nature of the transaction and the other party knew that. then it would be voidable.

80
Q

can an unincorporated association be bound by a contract

A

only the person who entered into it and the person who gave authority can be bound. each individual member is not and nor is the unincorporated association

81
Q

can LLPs be bound by contracts

A

yes

82
Q

can registered companies be bound by contracts

A

yes. if they are ultra vires they still bind as long as other party acted in good faith

83
Q

are statutory corporations bound by contracts

A

only within limits given in statute. If ultra vires they are void

84
Q

When is acceptance deemed communicated

A

When it is reasonable for the offeree to expect it to be read (eg an email sent in office hours as it is reasonable to expect them to read emails in normal office hours)

85
Q

Who must communicate revocation

A

Offeror or a reliable third party

86
Q

When must acceptance be communicated

A

Before revocation

87
Q

Impact of stating that a contract is ‘binding in honour only’

A

This rebuffs the presumption that the parties in a commercial context intended to create legal relations

88
Q

How to rebut an intention to create legal relations in a commercial context

A

Clear words

89
Q

How to rebut the presumption that the parties did not intend to create legal relations in a social context

A

A number of factors including how close the parties are and amount of money at stake

90
Q

What are commercial contracts

A

B2b but also all agreements not made between family and friends

91
Q

When does implied actually authority exist

A

When the agent does something within the scope of the normal authority of their role even if the principal expressly prohibits them from doing it

E.g bar manager orders beer from supplier even though owner told them not to because it is within normal scope of duties of a bar manager

92
Q

Limits on the postal rule applying

A

Is it excluded by offeror
Post must be a reasonable means of communication
The letter must be properly addressed and posted etc

Contract Law (4 decks)

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