Chapter 23- Nature of a contract

Question 1

what is a contract

Answer 1

• This is an agreement enforceable at law

Question 2

State the 5 elements of a contract

Answer 2

• an offer
• an acceptance
• consideration
• intention
• contractual capacity

Question 3

The 3 types of contracts are

Answer 3

• Unilateral
• Bilateral
• Collateral

Question 4

What are unilateral contracts

Answer 4

When one party pays another party to perform an action

Question 5

Examples of unilateral contracts

Answer 5

• when getting a reward
• through an advertisement

Question 6

Describe the facts of the Carlill v The Carbolic smoke ball co.

Answer 6

• A company will give 100 pounds to any person that contracts the influenza colds after using their ball for 2 weeks.
• Mrs Carlill had taken the ball and contracted the virus the next year.
• The court concluded that for such a payment to be done, it had to be done under the clear terms of the offer,

Question 7

What are bilateral contracts

Answer 7

This is a reciprocal arrangement between 2 parties where both parties have to carry out an action under the terms of the contract

Question 8

what are collateral contracts

Answer 8

These act as secondary contracts to the main contracts and usually stands between the original parties but can include a third party

Question 9

Reasons for collateral contracts

Answer 9

• Some new terms and conditions need to be added after being thought of after the main contract had been made
• There are errors in the main contract that need to be corrected
• a third party is involved

Question 10

contracts may be in the form of:

Answer 10

• Written/speciality contracts
• Simple contracts
• Contracts under seal

Question 11

What are written contracts

Answer 11

These are contracts that must be written under a formal document
examples:
- marine insurance
- conveyance

Question 12

What are contracts requiring written evidence

Answer 12

contracts that require notes as evidence such as:
- a description of the parties to sufficiently identify them
- a description of the subject matter
- a consideration (the value)
- their signatures
examples:
- car insurance

Question 13

What are simple contracts

Answer 13

These are contracts whose formation is not subject to any legal formalities
they can be made:
- Orally
- written
- Partly oral and written
- implied
examples:
sales of goods

Question 14

What are contracts under seal

Answer 14

Contracts drawn by one party which are sealed and sent to the next party to be signed
examples:
- mortgage
- charge

Question 15

Sources of law for contracts

Answer 15

1. Substance of common law
2. Doctrines of equity
3. Certain Statutes of General Application