📑Contract: formation, parties, capacity Flashcards
Elements for a valid contract
- Agreement (offer and acceptance)
- Intention to create legal relations
- Consideration
What is agreement
an offer that has been accepted
What is an offer?
‘An expression of willingness to contract on certain terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed’
Are requests for tender offers or invitation to treat?
- Request for tender: Invitation to treat
- Tenders=offer to do the work
- If promised to accept lowest tender/impliedly promised to consider all conforming tenders=offer of unilateral contract
Are auctions offers or invitations to treat?
- Request for bids-invitation to treat
- Bids-offer
- Hammer falls-acceptance (If auctioneer acting as agent for the owner, a bilateral contract is formed between owner and bidder once hammer falls)
- BUT ‘Without reserve’-auctioneer must sell to highest bidder, is offer of unilateral contract by auctioneer (not owner)
Is an ad of reward an offer or invitation to treat?
offer of unilateral contract
Are advertisements, menus, promotional materials offers or invitations to treat?
- Invitation to treat
- BUT if special circumstances showing an intention to be bound, may be offer of unilateral contract
Are goods on display an offer or invitation to treat?
Invitation to treat
Contract made when payment exchanged
Offer=customer taking goods to checkout
What is acceptance?
‘An unqualified expression of assent to the terms of an offer’
‘Expression of assent’=must be communicated
‘Unqualified’=unconditional
What must acceptance be?
Communicated to offeror
Is silence acceptance
NO, even if the offer states it is, unless coupled with conduct that clearly signifies acceptance when viewed objectively
Rule for when acceptance via electronic communication is communicated?
No universal rule, look at all circumstances
Rule for acceptance of unilateral contract?
Offeror deemed to have waived right to have acceptance communicated
Implied promise to consider all conforming tenders
What is a ‘battle of the forms’?
between businesses (send ts and cs back and fourth)-counts as counter offer after counter offer. ‘last shot’ often the winner
What is the postal rule?
Acceptance takes place on posting BUT:
1. post reasonable form of communication
2. Properly stamped, addressed and posted
3. Offeror must not have expressly or implicitly excluded rule
When may the postal rule be impliedly excluded?
If offeror says/implies they need ‘notice in writing’ or be ‘told’ of acceptance, letter will only be effected when received
3
What is NOT acceptance?
- Where offeree doesn’t know of the offer
- Silence (unless accompanied with conduct that clearly signifies acceptance when viewed objectively)
- Request for further info
4
How can an offer be terminated?
- Revocation
- Rejection (by offeree)
- Lapse of time (reasonable time depends on circumstance)
- On occurrence of a condition (eg. goods damaged)
How can an offer be impliedly rejected?
Counter offer
NOT request for further info
When can an offer be revoked
- Any time before acceptance, even if the offeror has said they will leave it open for a specified period of time
- UNLESS offeree has given (or promised) something to the offeror in return for keeping the offer open
What must be done for an offer to be successfully revoked (+exception)?
Must be communicated to offeree (can be by reliable 3rd party)
UNLESS last known address not valid or offeree doesnt read it
How can an offer to a business be revoked?
only effective in reasonable business hours
How can offers to the public be revoked?
must be revoked in same channel as it was made
Can an offer of unilateral contract be revoked?
Mostly offeror cannot revoke once the offeree has started to perform the act of acceptance