Contract Formation

Question 1

What must be present for contract to be valid

Answer 1

1. agreement between the parties
2. intention to create legal relations
3. consideration

without these the contract is VOID

Question 2

What other factors effect the validity of the contract

Answer 2

Lack of capitcity 18 or older - voidable 
Absence of free will - voidable 
Illegality - Void 
Mistake 
Misreprsentation - voidable

Question 3

When is a contract unenforable

Answer 3

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.

Question 4

Explain void and voidable

Answer 4

Void - not a contract at all. Property transfered recoverable

Voidable - 1 party may set aside , property transfered prior to avoidence irrecoverable.

Question 5

What terminates an offer

Answer 5

1. rejection
2. counter offer unless request for information
3. lapse of time (specified time or reasonable)
4. Revocation - before acceptance must be communicated
5. failure of precondition

Question 6

What is a valid agreement

Answer 6

unqualified agreement to all the terms of the offer

Acceptance may be express word or inferred from conduct

Question 7

What cannot constitute an offer

Answer 7

Silence

Question 8

How must acceptance be communicated

Answer 8

If a method is suggested the acceptance must be by this method or one which is no less efficient/ speed.

Question 9

Explain the postal rule

Answer 9

postal rule refers to acceptance only not revocation
when the letter is posted
unless perscribed ‘notice in writing’
unsure on email

Question 10

Explain what might happen with a reward offer

Answer 10

They must be aware of the offer

Question 11

How does the nature of the relationship affect the presumption of the intention

Answer 11

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

Question 12

What phrases can be used in negotiation stages

Answer 12

Subject to contract/ a personal agreement until a fully legalised agreement

Question 13

Explain Excuted, Executory, past

Answer 13

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.

Question 14

What must a consideration be / not be

Answer 14

The consideration need not be adequate ‘equal in value’ but it must be sufficient ‘have an identificable value’

Question 15

When is a consideration not suffiecient

Answer 15

Performance of existing statutory duty - going to court when on jury service

Existing contractual duty - Seaman completing a voiyage

Illegal act

Question 16

When is an existing contractual duty a good consideration

Answer 16

performance exceeds - remaining seaman completing the voyagae

Both party gain additional benefits - overun on a block of flats.

Question 17

When is a consideration sufficient e.g. waiver

Answer 17

waiver of existing right if it has some value

Question 18

Explain the waiver of existing debt give an example

Answer 18

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.

Question 19

When is the waiver binding

Answer 19

Alternative consideration e.g goods instead of of cash

Bargain between the creditors

Third party payments