Chapter 1: Agreement Flashcards
What are the three requirements for a contract to exist?
Offer and acceptance, intention to create legal relations and consideration
What are the requirements of a valid offer?
Must be clear and certain
What are the two types of contracts?
Unilateral and bilateral
What is a bilateral contract?
Both parties assume an obligation to the other by making a promise to do something e.g. goods for payment
What is a unilateral contract?
One party offers to perform an action and once this is done, acceptance is given e.g. ‘If you deliver a watch to me, I will pay £100. Offer is only coming from one party
What is an invitation to treat?
A first step in negotiations which may or may not lead to a firm offer - an invitation to make an offer
Are advertisements considered offers?
No - an advertiser may have limited supplies of the goods in question
What is the exception that advertisements are not considered an offer?
If it meets the criterion of a unilateral offer: a prescribed act for the consumer to do and a clear intention to be bound
What is the exception to the rule that an advertisement cannot constitute an offer?
Where the advertisement amounts to a unilateral offer. Intention to be bound was present by depositing money in an account for this purpose and fulfilment of prescribed act is deemed the acceptance
Are display of goods / websites for sale deemed an offer?
No for the reason that everyone who picks up an item from the shelf isn’t always entitled to buy that item and so are invitations to treat
Are invitations to tender invitations to treat?
Yes as the requestor invites tenders to make a bid who can then accept or reject any tender
When are invitations to tender considered a unilateral contract?
Where the invitation to tender expressly contains an undertaking to accept the highest or lowest bid
When could an invitation to tender give rise to a binding contractual obligation or at least consider the compliant tenders?
Where the tenders were solicited from specified parties known to the parties, there was an absolute deadline for submission and the party requesting the tenders laid down absolute and non-negotiable conditions
Is an auction with reserve an offer or invitation to treat?
Acceptance is when auctioneer falls his hammer and the bidder may retract the bid anytime before this
What about auctions without reserve?
The highest bona fide bidder is entitled to the sale so if there is a breach, the bidder is entitled to be compensated with damages but not entitled to the goods
In what ways can an offer be terminated?
Rejection, lapse or revocation
How is an offer rejected and what is the effect of this?
It is rejected by the [intended] accepting party. For acceptance after rejection, the offer must be made again
What is a rejection and counter offer?
Offeree makes a counter offer which rejects the original offer
Is a request for information the same as a rejection?
No, the original offer will still remain open for acceptance
When does an offer lapse?
Where acceptance is not made within a certain time prescribed by the offeror, not accepted within a ‘reasonable’ time or offeror dies and offeree knows the offeror died, or the offeree dies
How is revocation of an offer effective?
Upon actual notice of the revocation, through words or conduct coupled with a clear intention to revoke reaching the offeree
How must an offeror revoke a unilateral offer?
Once performance has commenced, there is an implied obligation on the offeror not to revoke. Otherwise, offeror must take reasonable steps to bring the revocation to the attention of all those who may have read the offer
What are the four requirements of an unequivocal acceptance of an offer?
- Only the offerees can accept the offer
- Must be unqualified and correspond exactly with the terms of the offer
- To accept the offer in the mode prescribed, if there is one particular mode
- Must be communicated (if through a third party, they must be authorised)
When does acceptance take effect if using post to deliver a letter of acceptance?
From the moment the letter is properly posted (official letter box/given to an authorised postal operative) even if it is delayed or lost
When can the post be used for such acceptance?
Only where it was reasonable in all the circumstances that the offeree used the post
When does acceptance take effect if using post to deliver a letter of revocation?
Once it has been received
