Contract Formation Flashcards
What must be present for contract to be valid
- agreement between the parties
- intention to create legal relations
- consideration
without these the contract is VOID
What other factors effect the validity of the contract
Lack of capitcity 18 or older - voidable Absence of free will - voidable Illegality - Void Mistake Misreprsentation - voidable
When is a contract unenforable
May still be valid but if in the wrong form
Transfer of property must be in writting
Guarantee - need not be in writing however terms must be evidenced in writing which must be acknowledged
** shipping container company emails.
Explain void and voidable
Void - not a contract at all. Property transfered recoverable
Voidable - 1 party may set aside , property transfered prior to avoidence irrecoverable.
What terminates an offer
- rejection
- counter offer unless request for information
- lapse of time (specified time or reasonable)
- Revocation - before acceptance must be communicated
- failure of precondition
What is a valid agreement
unqualified agreement to all the terms of the offer
Acceptance may be express word or inferred from conduct
What cannot constitute an offer
Silence
How must acceptance be communicated
If a method is suggested the acceptance must be by this method or one which is no less efficient/ speed.
Explain the postal rule
postal rule refers to acceptance only not revocation
when the letter is posted
unless perscribed ‘notice in writing’
unsure on email
Explain what might happen with a reward offer
They must be aware of the offer
How does the nature of the relationship affect the presumption of the intention
Social/ domestic and family - presummed the agreement is not intented to be legally binding unless there is clear evidence which points to the contrary
Commercial - presummed the agreement is intended to be legally binding unless there is clear evidence which points to the contrary
What phrases can be used in negotiation stages
Subject to contract/ a personal agreement until a fully legalised agreement
Explain Excuted, Executory, past
Executed - Performed or excuted act in return for a promise ‘pay for goods once they are delivered’ VALID
Executory - A promise given for a promise ‘pay for good at a later date after delivery’ VALID
Past - something that is already done at the time the promise is made - Generally not valid ‘derek redecorates gangan homes and we the say of we will pay you for that.
What must a consideration be / not be
The consideration need not be adequate ‘equal in value’ but it must be sufficient ‘have an identificable value’
When is a consideration not suffiecient
Performance of existing statutory duty - going to court when on jury service
Existing contractual duty - Seaman completing a voiyage
Illegal act
When is an existing contractual duty a good consideration
performance exceeds - remaining seaman completing the voyagae
Both party gain additional benefits - overun on a block of flats.
When is a consideration sufficient e.g. waiver
waiver of existing right if it has some value
Explain the waiver of existing debt give an example
The waiver itself (to accept less money for the debt) is itself a promise which needs to be supported with a consideration.
Paying a debt off in installments is subject to interest.
When is the waiver binding
Alternative consideration e.g goods instead of of cash
Bargain between the creditors
Third party payments
