Chapter 2 - Contract formation Flashcards
Three essential elements of contract
agreement, intention to create legal relations, consideration
Void / Voidable - lack of capacity
Individual must be of sound mind and aged 18 or over
If not followed - voidable at option of person without capacity
Void/Voidable = absence of free will
a party should not be made to enter into a contract other than by their own free will (not duress, undue influence)
Voidable
void/voidable = illegality
contract should not be illegal or offend public policy
Void
Void/Voidable
Mistake
If one or both parties allies they were mistaken, may affect validity, but complex
Void/Voidable
Misrepresentation
If A makes pre-contractual statement of fact that is intended to and does cause B to enter into a contract that terns out to be untrue,e the other party may choose to avoid the contract
Voidable
Void contract definition
A void contract is not a contract at all. Parties not bound by it and if they transfer property under it can generally recover goods even from third party
Voidable contract definition
Contract which one party may set aside property transferred before avoidance is usually irrecoverable from a third party
When will a contract be unenforceable
where it is not in the correct form
When is oral contract not sufficient
Agreement for transfer of land and consumer credit agreements - must be in writing
Guarantee - does this need to be in writing
No - but terms must be evidenced in writing before any action is bought
Golden Ocean Group Ltd v Salgaocar Mining Industries PVT 2011
Decision - Court of Appeal recognised contracts often negotiated informally by email and held single document was not necessary, not material that no documents were traditionally signed, and typed name in email clearly signified agreement and constituted validsignature
Offer
defined promise to be bound on specific terms and is made by offeror
Is a vague statement an offer
No - unless can be rendered certain by reference to previous dealings or cusom
Is a statement which sets out possible terms of a contract an offer
No - unless offer is clearly indicated
In the course of negotiations when a vendor states price they will sell at is this an offer
Yes
Is advertising an auction will take place an offer?
No - statement of intention
What is an invitation to treat
where party is initiating negotiations, it cannot be accepted to form binding contract
An advertisement is
an invitation to treat
Goods displayed for sale in shop window/self service shelves is
an invitation to treat (if accepted by removing, couldn’t put back and would be breach)
Circulation of a price list is
an invitation to treat
Who does an offer have to be made to
class of persons or to the world at large
arils v Carbolic Smoke Ball Co 1893
Advertisement for 100 reward to anyone contracting influenzaa
valid offer capable of acceptance as not vague, and offer can be made to the workd at large
Termination of offer
Rejection
rejection by offeree terminates the offer