Contract: establishing the contract Flashcards
Which method of communication is effective when received and read in business hours?
Email - Brinkibon Ltd. v Stahag Stahl
How are contract ‘battles’ usually won?
‘By he who fires the last shot’ - Each communication which attempts to impose the party’s offers will be viewed as a counter-offer
Which case was a dispute about whether a price variation clause was part of the contract?
Butler Machine Tool Co. v Ex-Cell-O Corp
Which case was a dispute about which party should bear the risk when a consignment of whiskey was stolen?
BRS v Arthur Crutchley Ltd
What does Alexander Brogden v Metropolitan Railway show?
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
Which case shows that acceptance must be within a reasonable time?
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
A void contract…
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
What is consideration?
- 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
Executed consideration is
when one party promises to do something in return for the act of another
Unilateral - Mrs Carlill’s conduct amounted to executed consideration
Executory consideration is…
Both parties promise to do something in the future (remains to be done), i.e. make the contract first, then perform
Can consideration be past?
No, McArdle (1951), past consideration is not effective consideration
Can there be consideration in the past?
Yes, if the act was done in response to a request - Lampleigh v Braithwaite
Consideration must be ___ but not be _____
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
Chappell & Co. Ltd. v Nestlé Co Ltd.
Sweet wrappers could be good consideration
Can performing an existing duty be good consideration?
No
Performing a public duty - Collins v Godefroy
Performing a contractual duty - Stilk v Myrick
Are there exceptions to performing an existing duty being good consideration?
Yes - where the party promises to exceed their existing duty
Glasbrook Bros v Glamorgan County Council
What are some more exceptions?
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
What are the 4 rules of Promissory Estoppel
- 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
What is Promissory Estoppel?
Doctrine acts as a defence to a claim by a creditor for the remainder of the debt where part-payment has been accepted
Can promissory estoppel be used to file a claim?
No - it is only used as a defence. Promisee must have relied on promise and must themselves have acted equitably.
Privity
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
Tweddle v Atkinson
Only a person who is a party to a contract can sue on it
Section 1 Contracts (Rights of Third Parties) Act 1999;
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))
Section 1(3) Contracts Act 1999
Third party must be expressly identified in the contract, either by: name; as a member of a class; or by answering a particular description
What are legal relations?
The parties view the agreement as a legally enforceable contract and a breach of contract could result in a remedy being sought
Are social and domestic arrangements presumed as not legally binding ?
Yes - unless otherwise stated in the agreement
Is Balfour v Balfour an example of a legally binding agreement?
No - it was a social and domestic agreement
Can courts ignore a term which is meaningless?
Yes - the courts may look to particular customs in a trade/industry in an attempt to remove the uncertainty in the parties intentions
Can agreements fail due to uncertainty?
Yes
