Contract: establishing the contract

Question 1

Which method of communication is effective when received and read in business hours?

Answer 1

Email - Brinkibon Ltd. v Stahag Stahl

Question 2

How are contract ‘battles’ usually won?

Answer 2

‘By he who fires the last shot’ - Each communication which attempts to impose the party’s offers will be viewed as a counter-offer

Question 3

Which case was a dispute about whether a price variation clause was part of the contract?

Answer 3

Butler Machine Tool Co. v Ex-Cell-O Corp

Question 4

Which case was a dispute about which party should bear the risk when a consignment of whiskey was stolen?

Answer 4

BRS v Arthur Crutchley Ltd

Question 5

What does Alexander Brogden v Metropolitan Railway show?

Answer 5

Acceptance of a contract need not be in writing or made orally, rather it could be evidenced through the conduct of the parties where they had a long-term business relationship

Question 6

Which case shows that acceptance must be within a reasonable time?

Answer 6

Ramsgate Victoria Hotel v Montefiore - whilst the offer did not contain any provision for the time in which acceptance must take place, the court considered that allotment must take place within a reasonable time

Question 7

A void contract…

Answer 7

has fallen down for not having one of the legal elements, a void contract has no legal effect and does not place obligations on the parties to the agreement

Question 8

What is consideration?

Answer 8

• Essential element to show agreement should be legally binding
• Began to be defined in the 19th century in terms of benefit and detriment
• Thomas v Thomas - some detriment to the plaintiff or some benefit to the defendant

Question 9

Executed consideration is

Answer 9

when one party promises to do something in return for the act of another
Unilateral - Mrs Carlill’s conduct amounted to executed consideration

Question 10

Executory consideration is…

Answer 10

Both parties promise to do something in the future (remains to be done), i.e. make the contract first, then perform

Question 11

Can consideration be past?

Answer 11

No, McArdle (1951), past consideration is not effective consideration

Question 12

Can there be consideration in the past?

Answer 12

Yes, if the act was done in response to a request - Lampleigh v Braithwaite

Question 13

Consideration must be ___ but not be _____

Answer 13

Must be sufficient, but need not be adequate. Sufficient means it must be real, tangible, and have some recognisable value.

It need not be adequate, as consideration must be of some value, but not necessarily the same value as that provided by the other party

Question 14

Chappell & Co. Ltd. v Nestlé Co Ltd.

Answer 14

Sweet wrappers could be good consideration

Question 15

Can performing an existing duty be good consideration?

Answer 15

No
Performing a public duty - Collins v Godefroy
Performing a contractual duty - Stilk v Myrick

Question 16

Are there exceptions to performing an existing duty being good consideration?

Answer 16

Yes - where the party promises to exceed their existing duty
Glasbrook Bros v Glamorgan County Council

Question 17

What are some more exceptions?

Answer 17

The principle of accord and satisfaction:
- agreeing to accept lesser sum paid earlier
- agreeing to accept something other than money
- agreeing to pay in a different way
- promissory estoppel

Question 18

What are the 4 rules of Promissory Estoppel

Answer 18

• Pre existing contractual relationship
• One party agrees to waive some of their rights
• Knowing that the other party would rely on this waiver
• The other party does actually rely on the waiver

Question 19

What is Promissory Estoppel?

Answer 19

Doctrine acts as a defence to a claim by a creditor for the remainder of the debt where part-payment has been accepted

Question 20

Can promissory estoppel be used to file a claim?

Answer 20

No - it is only used as a defence. Promisee must have relied on promise and must themselves have acted equitably.

Question 21

Privity

Answer 21

Anyone who is not a party to a contract cannot sue or be sued on the basis of that contract

Dunlop Pneumatic Tyres Co Ltd v Selfridge & Co Ltd - consideration must move from the promise

Question 22

Tweddle v Atkinson

Answer 22

Only a person who is a party to a contract can sue on it

Question 23

Section 1 Contracts (Rights of Third Parties) Act 1999;

Answer 23

Third party can sue on a contract:
- if the contract expressly provides so (s1(1)(a)), or
- if the contract intended to confer a benefit on the third party (s1(1)(b))

Question 24

Section 1(3) Contracts Act 1999

Answer 24

Third party must be expressly identified in the contract, either by: name; as a member of a class; or by answering a particular description

Question 25

What are legal relations?

Answer 25

The parties view the agreement as a legally enforceable contract and a breach of contract could result in a remedy being sought

Question 26

Are social and domestic arrangements presumed as not legally binding ?

Answer 26

Yes - unless otherwise stated in the agreement

Question 27

Is Balfour v Balfour an example of a legally binding agreement?

Answer 27

No - it was a social and domestic agreement

Question 28

Can courts ignore a term which is meaningless?

Answer 28

Yes - the courts may look to particular customs in a trade/industry in an attempt to remove the uncertainty in the parties intentions

Question 29

Can agreements fail due to uncertainty?

Answer 29

Yes