C1- Offer And Acceptance

Question 1

What is a contract?

Answer 1

A contract is defined as a legally binding agreement made between two or more parties, by which rights are acquired by one or more to acts or forebearances on the part of the other or others.

Question 2

What are the two types of contracts?

Answer 2

Unilateral contract
Bilateral contract

Question 3

What is a unilateral contract?

Answer 3

An agreement where one party makes a promise to perform a certain act and the other party accepts the offer by actually performing this act.

Question 4

What is a bilateral contract?

Answer 4

An agreement in which both parties make mutual promises to each other. In this scenario, both sides commit to specific actions, forming a legally binding agreement.

Question 5

What are the three key ingredients for a formation of a contract?

Answer 5

1. Agreement (offer and acceptance)
2. Consideration
3. Intention to create legal relations

Question 6

What are the others factors affecting the formation of a contract?

Answer 6

1. Capacity of the parties
2. Consent must be genuine
3. Legality of object
4. Possibility of performance

Question 7

What happen if the key ingredients of the contract are missing?

Answer 7

The contract will be void, voidable or unenforceable.

Question 8

What is a void contract?

Answer 8

Destitute of legal effect, there are non contracts and agreements of this kind do not confer legal rights on the parties thereto.

Question 9

What is a voidable contract?

Answer 9

Which may be made void at the instance of one of the parties (high risk the contract will be voided at some time).

Question 10

What is an unenforceable contract?

Answer 10

Which are valid but are unenforceable at law because of the absence of evidence of the contract or the form required by law.

Question 11

What is an offer?

Answer 11

An offer is a statement of willingness to contract on specified terms made with the intention that, if accepted, there will arise a binding contract. An offer may be expressed or implied from conduct. It may be addressed to one particular person, a group of persons, or the world at large, as in an offer or a reward.

Question 12

What are the different forms of an offer?

Answer 12

Written
Spoken
By everyday act of conduct

Question 13

What is an invitation to treat?

Answer 13

An invitation to another person to make an offer to contract

Question 14

Example of invitation to treat

Answer 14

1. Display of goods for sale at a mixed price in a shop window or in a shelf of a self service store
2. Advertisement, circulations of prices list and catalogues
3. Auction sales
4. Request for tender

Question 15

Pharmaceutical Society of Great Britain v Boots Cash Limited (display of Goods in Shop Window)

Answer 15

Medecines displayed in open shelves. The payment is made in front of a registered pharmacist.

=> display of goods = invitation to treat

Question 16

Carlill v Carbotic Smoke Ball Co. 1893

Answer 16

Company has to pay £100 if anyone contracted the influenza after using the ball.
Deposit of money : intention to be bound
Buying and using of smokeball : acceptance

Company HAS to pay !

Question 17

Communication of an offer

Answer 17

The offeree must have clear knowledge of the existence of an offer for it to be enforceable
The parties must know in advance what they contracting over, so any vague words may invalidate the agreement

Question 18

How an offer can be rejected ?

Answer 18

When the offeree rejects it

Question 19

What are the different situations which lead to the termination of the offer ?

Answer 19

1. By lapse of time
2. Reasonable length of time
3. Failure of precondition
4. Rejection
5. Counter offer
6. Death of the offeror
7. Death of the offeree
8. Withdrawal of offer

Question 20

Termination of offer : By lapse of time

Answer 20

If the offer owes a time for acceptance, it will end when that time has passed without acceptance

Question 21

Termination of offer : Reasonable length of time

Answer 21

If no time is specified it will lapse when not accepted within a reasonable time

How long it this will depend upon whether the means of communicating the offer were fast or slow and on its subject matter

Question 22

Ramsgate Victoria Hôtel v Montefiore 1866

Answer 22

Purchase shares in the complainant’s hotel.
Offer was accepted 6 months after (but no contact in between)
Contract no longer valid.

=>6 months is the reasonable time before automatic expiration of the offer for shares

Question 23

Termination of offer : Failure of precondition

Answer 23

Some offers are made subject to certain conditions, if such conditions are not in place, the offer may lapse

Question 24

Termination of offer : Rejection

Answer 24

An offer lapses when the offeree rejects it

Question 25

Termination of offer : Counter offer

Answer 25

À counter offer can terminate the original offer (Hyde v Wrench 1840)
Distinguish with «request for information» (Harvey v Facey 1893)

Question 26

Hyde v Wrench 1840

Answer 26

1st offer: 1000
Counter offer : 950, refused
Try to accept original offer : negative, there is no contract

Question 27

Harvey v Facey 1893

Answer 27

Request for information and an offer : non contract

Question 28

Termination of offer : Death of the offeror

Answer 28

If the offeree know that the offeror has died, the offer will lapse
Where an offer requires personal performance by the offeror it will usually lapse on the offeree’s death

If not aware, it will probably not lapse