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Contract Law - Paper 3 > Contract formation > Flashcards

Contract formation Flashcards

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1
Q

What is a contract?

A

An agreement that is legally binding.

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2
Q

What are the four stages of a contract?

A

An offer, an acceptance, consideration and intention to create legal relations.

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3
Q

Who is the offeror?

A

The person making the offer.

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4
Q

Who is the offeree?

A

The person to whom the offer is made.

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5
Q

What is an offer?

A

A proposal of definite terms that is intended to result in a contract if the other party accepts it.

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6
Q

Which case demonstrates that displays in a shop window or on shelves are invitations to treat?

A

Fisher v Bell

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7
Q

What is an invitation to treat?

A

A statement to someone which shows a willingness to receive offers or which furthers the bargaining process.

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8
Q

Which case demonstrates that advertisements, brochures of products for sale and price lists are invitations to treat?

A

Partridge v Crittenden

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9
Q

Which case demonstrates that requests for bids at an auction is an invitation to treat?

A

British Car auctions v Wright

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10
Q

Which case demonstrates that requests for further information and supplying further information are invitations to treat?

A

Harvey v Lacey

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11
Q

Which case demonstrates that vending machines and ticket machines make standing offers?

A

Thornton v Shoe Lane Parking

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12
Q

When can a person not accept an offer?

A

If they don’t know about it.

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13
Q

What must an offer be?

A

Effectively communicated.

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14
Q

When will an offer in writing be communicated?

A

When it is received and read.

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15
Q

When is an offer made verbally communicated?

A

When it is heard.

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16
Q

What is acceptance?

A

An unconditional agreement to all the terms of the offer by words or conduct.

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17
Q

What does Carlill v Carbolic Smoke Ball Co say about acceptance?

A

If the acceptance is of a unilateral offer and by conduct, it must be clear that the offeree did the required act with knowledge and the intention of accepting the offer.

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18
Q

What does the case Brinkibon v Stahag Stahl say about acceptance?

A

In terms of modern methods of instantaneous communication, an acceptance is effective when received by the machine, unless it is out of office hours then acceptance is in effect when the offeree might reasonably expect it to be communicated to the offeror.

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19
Q

What is the postal rule?

A

Acceptance takes place when the letter of acceptance is posted by the offeree, it doesn’t matter if it gets lost or delayed in the post and never actually reaches the offeror.

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20
Q

What case demonstrates the postal rule?

A

Adams v Lindsell

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21
Q

What is rejection of an offer?

A

Once the refusal of an offer has been communicated to the offeror, the offer is at an end and can’t later be accepted if the offeree has a change of mind.

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22
Q

What are the five ways an offer can come to an end?

A

Rejection, revocation, counter offer, lapse of time or death.

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23
Q

What is revocation of an offer?

A

The offeror can withdraw the offer at any time before acceptance.

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24
Q

What does the case Byrne v Van Tienhoven say about revocation of an offer?

A

The revocation must be communicated to the offeree and revocation after the time of acceptance is ineffective.

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25
Q

What is a counter offer?

A

An offer ends of there is a counter offer, a response introducing new terms rather than accepting all the terms of the original offer.

26
Q

What does Hyde v Wrench say?

A

A counter offer is itself an offer and a contract will end if the original offeror accepts.

27
Q

What is lapse of time?

A

If the offeror has set a time limit for the acceptance then the offer only remains open for that amount of time.

28
Q

What does Ramsgate Victoria hotel v Montefiore say?

A

When no time limit is specified then the offer remains open for a reasonable time. What is considered reasonable will depend on the circumstances.

29
Q

What is consideration?

A

The price for which the promise of the other is bought.

30
Q

What case promote the definition of consideration?

A

Dunlop v Selfridge

31
Q

What does White v Bluett say about consideration?

A

Consideration must be sufficient in that something of value has been given. Mere sentiment or a promise to give up a right which one does not possess is not sufficient consideration.

32
Q

What happened in White v Bluett?

A

A promise a son made to his father not to complain about the contents of his father’s will in return for cancelling a debt was not sufficient consideration as the son had no right to complain in the first place.

33
Q

What does Chappell and Co v Nestle and Co say?

A

Consideration must be sufficient, but it need not be adequate or match the value put in by the other party.

34
Q

What happened inChappell and Co v Nestle and Co?

A

Nestlé had a special offer which involved people sending off three wrappers from their chocolate bars in return for a music record. It didn’t matter that they didn’t match in value.

35
Q

What does Re McArdle say about consideration?

A

There must not be past consideration. Consideration must be given in exchange for the promise at the time of the agreement, rather than being something that has already been done.

36
Q

What happened in Re McArdle?

A

Repairs were made to a house and the people who inherited the house were asked to pay towards the improvement.

37
Q

What does the case Lamplight v Braithwaite say about consideration?

A

Past consideration may be valid where it was proceeded by a request.

38
Q

What happened inLamplight v Braithwaite?

A

B asked L to travel to the King to seek a pardon for him so he wouldn’t be executed. L did this and B promised to pay £100 but he didn’t.

39
Q

What does the case Tweedle v Atkinson say about consideration?

A

A person to whom a promise is made can only enforce the promise of he himself provides consideration for that promise.

40
Q

What happened in Tweedle v Atkinson?

A

A bride’s father agreed with the groom’s father that he would pay £200 to the groom but the bride’s father died so the groom was not paid. The consideration had not moved from the groom so he was unsuccessful.

41
Q

What does the case Collins v Godefroy say about consideration?

A

Performing an existing duty cannot be consideration for a new promise where the duty is imposed by law.

42
Q

What happened in Collins v Godefroy?

A

C was a police officer and under a court order to give evidence at a trial. D promised to pay him to attend however the promise wasn’t enforceable as he was under a duty to attend anyway.

43
Q

What does Stilk v Myrick say about consideration?

A

Performing an existing duty cannot be consideration for a new promise where the duty has arisen under an existing contract.

44
Q

What happened in Stilk v Myrick?

A

Two members of a ship’s crew deserted and the captain promised the remaining crew the two men’s wages if they got the ship safely home however the sailors were already bound by their contract to sail back safely.

45
Q

What does the case Hartley V Ponsbury say about an exception to the rule about existing obligations as consideration?

A

If a party does something extra than what was required in the original agreement then that may be new consideration in return for a new promise.

46
Q

What happened in Hartley v Ponsbury?

A

19 members of a ship’s crew remained after desertions and were promised extra wages as the voyage was much more dangerous and they had to do extra work to get back safely.

47
Q

What does the case Williams V Roffey Bros say about the exception to the rule of existing obligations being consideration?

A

Where the party making the promise to pay more receives an extra benefit from the other party’s agreement to complete what he was already bound to do under an existing contract it may be consideration.

48
Q

What happened in Williams V Roffey Bros?

A

W was doing carpentry work but ran into financial difficulties so RB promised to pay him extra to finish the work on time

49
Q

What is the doctrine of privity?

A

A person who is not a party to the contract can neither sue nor be sued.

50
Q

What does the case Dunlop V Selfridge say about the doctrine of privity?

A

A party not providing consideration is not part of the mutual exchange which is central to the enforceability of agreements.

51
Q

What does the case Tweedle v Atkinson say about privity?

A

The groom was merely a third party. Even though the contract was to benefit the bride and groom, under the traditional rules of privity – they have no rights under contract law.

52
Q

What does the case Jackson v Horizon Holidays say about privity?

A

Lord Denning argued that Mr J had bought the holiday for the benefit of his whole family and should therefore be compensated for their loss as well as his own.

53
Q

What are Intentions to create legal relations?

A

For an agreement to be enforceable in court, the parties must intend it to be legally binding.

54
Q

What do social/domestic situations imply?

A

A presumption exists in social and domestic situations that usually there is no legal intent and that arrangements are not enforceable. This presumption can be rebutted by evidence that the parties were serious in their intention to be legally bound.

55
Q

What do business/commercial situations imply?

A

Any agreement in a commercial context is presumed to have legal intent and therefore binding. This presumption can be rebutted but very strong evidence will be required for this to succeed.

56
Q

What does the case Weeks v Tybald imply?

A

This was a mere puff and, in the context, was no intended to be legally binding.

57
Q

What does the case Balfour v Balfour show?

A

This was a social/domestic agreement with neither party having intention to create legal relations.

58
Q

What happens in Merrit v Merrit?

A

This was a social/domestic agreement but the presumption of no legal intent had been rebutted.

59
Q

Why did C win in Simpkin’s v Pays?

A

The exchange of money is evidence of an intention to create legal relations in social/domestic cases. It rebuts the presumption of no legal intent.

60
Q

Why did C win in Parker v Clarke?

A

Selling their home and giving up their security was evidence to rebut the presumption of no legal intent in social/domestic situations.

Contract Law - Paper 3 (4 decks)

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