Contract Law Flashcards
What is a ‘contract’?
Definition
Vast majority are entered into _______ ________
Can be in?
- A legally binding agreement between two or more parties
- Vast majority are entered into without formalities
- Can be in oral or written form.
Types of Contract
Broadly, two types of contract:
3 types of contract:
- Speciality contracts;
3 types:
i. Agreements which must be created in the form of a deed;
ii. Agreements which must be made in writing;
iii. Agreements which need only to be evidenced in writing.
- Simple contracts.
The Offer
Definition
Offeror (definition)
Offeree (definition)
Important to…
Offer = An offer is a proposal made on certain terms by the offeror with a promise to be bound by that proposal if the offeree accepts the terms.
Offeror = person making the offer
Offeree = person receiving the offer
Important to distinguish from an invitation to treat = merely an invitation to negotiate
Invitation to Treat (examples)
Advertisements
Goods displayed (in a shop) for sale
Goods displayed (in shelfs) for sale:
- Advertisements:
Partridge v. Crittenden (1968) - Goods displayed (in a shop) for sale:
Fisher v. Bell (1961)
Goods displayed (in shelfs) for sales
Where goods are sold on a self-service basis, the customer makes an offer to buy when presenting the goods at the cash desk
- Auctions: The auctioneer’s request for bids is an invitation to treat and each bid is an offer that can be retracted at any time before the fall of the hammer
- Tenders (where a buyer, in need of goods/services, issues an invitation called a Request for Tender (RFT) to suppliers. Suppliers will then submit a proposal/tender)
Advertisements for unilateral contracts
BUT advertisements are not always invitations to treat, they may constitute offers to the public at large.
Example of an offer to enter a unilateral contract
Rhona will pay £100 reward to anyone who finds her lost purse
But distinguish from ‘mere puffs or boast’
The advertisement was not a ‘mere puff’ but was ‘…intended to be understood by the ________ as an _______ which has to be acted upon…’
What is a mere puff?
The advertisement was not a ‘mere puff’ but was ‘…intended to be understood by the public as an offer which has to be acted upon…’
Mere puff: A hyperbolic exaggeration, which was not intended to be taken seriously and would not have been taken seriously by a reasonable person.
Example of a ‘mere puff’: Super-white, a manufacturer of washing powder states in an advertisement that ‘our washing powder washes whiter than any other powder…’
Statements giving information or expressing an intention
Example: Ben asks Ann: Will you sell me your iPhone? Ann replies to Ben: The lowest price I would sell it is £100. Ben then replies: Great, I agree to buy it for £100.
What is its effect?
*Ann’s reply to Ben is not an offer. It is merely an expression of intention.
Termination of an Offer
First 3
- By acceptance
- Must be absolute, unconditional and COMMUNICATED to the offeror
- Silence can never amount to acceptance
- Acceptance by Post
- postal rule: The general rule for acceptances by post is that they take effect when they are posted, rather than when they are communicated.
- Unilateral contracts are usually accepted by conduct. There is no acceptance until the relevant act has been completed.
- Problematic situations with communications of acceptance
- The rule that acceptance takes effect when it is communicated to the offeror may be displaced where it would be unfair to allocate the offeree the risk of the acceptance not being received.
- Battle of the forms:
Standard form contracts common in business transactions;
Each communication which attempts to impose that party’s offers will be viewed as a counter-offer;
‘Battle’ usually won by ‘who fires the last shot’.
- By rejection
- includes the offeree making a counter offer.
- A counter offer terminates the original offer.
- E.g. Sarah offers to sell her iPhone to David for £100. David offers to pay £50 but Sarah refuses. David then agrees to pay £100 however Sarah has not yet accepted.
- BUT not merely asking for more information:
- E.g. Jonathan is making an offer to sell his car to Maria if she pays £2000 by Monday. Maria replies and asks Jonathan if she could buy the goods on credit.
- Revocation
- An offer may be withdrawn at any time before acceptance:
- BUT revocation must be communicated:
- Even by a reliable third party:
- An offer for a unilateral contract cannot be revoked once the offeree has commenced performance
- communication of a withdrawal is effective when it could be read rather than when in fact read
Termination of an offer (recap) (7)
- By acceptance
- By rejection (includes making a counter offer)
- By revocation (withdrawal) of an offer
- By lapse of time
- When reasonable length of time has passed
- By failure of a precondition
- Death of the offeree
Offer (diagram)
Recap on the rules of communication for offer & acceptance
- Acceptance by post or telegram = effective when posted
- Acceptance by an instantaneous method of communication = effective when received
- Offers and revocations of offers = offer and revocations of offers are only effective when received regardless of the method of communication used.
