Chapter 6

Question 1

An agreement

Answer 1

before a contract can be in place, the parties must be in agreement, that is, they have reached a consensus as to their rights and obligations.

Question 2

Offer

Answer 2

a promise to enter into a contract, on specified terms, as soon as it is accepted.

Question 3

Invitation to treat

Answer 3

an expression of willingness to do business

Question 4

Standard form contract

Answer 4

a “take it or leave it” contract, where the customer agrees to a standard set of terms that favours the other side

Question 5

Revocation

Answer 5

The withdrawal of an offer

Question 6

Option agreement

Answer 6

an agreement where, in exchange for payment, an offeror is obligated to keep an offer open for a specified time.

Question 7

Lapse

Answer 7

the expiration of an offer after a specified or reasonable period.

Question 8

Rejection

Answer 8

the refusal to accept an offer

Question 9

Counteroffer

Answer 9

the rejection of one offer and proposal of a new one

Question 10

Acceptance

Answer 10

an unqualified willingness to enter into a contract on the terms in the offer

Question 11

Consideration

Answer 11

The price paid for a promise

Question 12

Gratuitos promise

Answer 12

a promise for which no consideration is given. Such a promise can be broken with legal impunity because it has not been “purchased”

Question 13

Pre-existing legal duty

Answer 13

a legal obligation that a person already owes

Question 14

Promissory estoppel

Answer 14

a doctrine whereby someone who relies on a gratuitous promise may be able to enforce it

Question 15

Rebuttable presumption

Answer 15

a legal presumption in favour of one party that the other side can seek to rebut or dislodge by leading evidence to the contrary

Question 16

Consideration

Answer 16

something of value that represents the ‘price’ paid for the other party’s promise