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LLB Year 1 > Contract Law > Flashcards

Contract Law Flashcards

1
Q

Classical Theory of Contract

A

The classical theory of contract states that parties are free to enter any agreement they wish even if it is disadvantageous to them. The state should also intervene as little as possible in the arrangement that the parties have made

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2
Q

What are the elements required to form a valid contract

A

Offer, Acceptance, Consideration and Intention all need to be present to form a valid contract

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3
Q

Offer

A

An offer is a promise by one party to enter a contract, on a particular set of terms with the intention of it being bound as soon as the other party signifies his or her acceptance. An offer may be made to a single individual, a particular group or to the general public

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4
Q

Ways an offer can be presented

A

An offer may be written, spoken or implied by conduct

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5
Q

Invitation to treat

A

This is merely indicating a willingness to commence or to continue negotiations e.g. Gibson v Manchester City Council

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6
Q

Gibson v Manchester City Council (1979)

A

An offer must be definite and not vague. This case puts forward an illustration in the difficulty in distinguishing between an offer and an invitation to treat

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7
Q

Advertisements of Goods

A

These are not for sale and not regarded as offers e.g. Partridge v Crittenden

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8
Q

Partridge v Crittenden

A

the appellant was charged, under legislation for the protection of wild birds, with unlawfully offering for sale a wild bird. The Divisional Court held that the appellant was not liable for the statutory offence as he had not offered the birds for sale; the advertisement was an invitation of treat

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9
Q

Advertisements of rewards

A

These are usually an offer. They are unilateral offers which are accepted usually by conduct e.g. Carlill v Carbolic Smoke Ball

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10
Q

Carlill v Carbolic Smoke Ball

A

This was a unilateral contract regarding a ball which was stated to contain a flu remedy within it

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11
Q

Items displayed in shop windows

A

These are merely invitation to treat. The items are not offers until they are taken to the checkout e.g. Fisher v Bell

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12
Q

Fisher v Bell (1961)

A

The flick knife in the shop window was not an offer but an invitation to treat. Goods in a shop window are not an offer until they are taken to the cash desk

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13
Q

Mere Statements of Price

A

As in the case of Harvey v Facey, request to information is not an offer

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14
Q

Ways a contract can be rejected

A

Revocation
Rejection
Lapse of Time
Offer on Conditional Precedent
Death

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15
Q

Revocation

A

An offer can be revoked or withdrawn anytime before the acceptance has occurred. Revocation cannot happen once acceptance has taken place. Withdrawal has to be communicated to the offeree.

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16
Q

Routledge v Grant

A

Held that the offeror is not entitled to keep the promise of leaving the offer open

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17
Q

Dickinson v Dodds

A

Held that a reliable third party can make the offeree aware of the offeror’s revocation

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18
Q

Rejection

A

An offer is terminated if the offeree rejects the offer. It is not possible for the offeree to change their mind and accept as this will be a counter-offer to the original offer e.g. Hyde v Wrench

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19
Q

Lapse of Time

A

An offer may come to an end if the period of time which the offer was open has concluded bringing an end to the offer e.g. Ramsgate v Montefiore

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20
Q

Ramsgate v Montefiore

A

An offer to buy shares that was issued in June could not be accepted in November

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21
Q

Offer on a conditional precedent

A

An offer may be expressed as subject to the occurrence of some condition. If this supposed condition is not met, then the offer will be terminated e.g. Financings v Stimson

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22
Q

Mirror Image Rule

A

When acceptance happens, it must be the same offer and same terms as discussed prior to the acceptance. Any change to this will be counter-offers and not the original offer which is prone to revocation e.g. Hyde v Wrench and Jones v Daniel

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23
Q

Jones v Daniel

A

C accepted the offer however it included new terms previously unknown to D and as a result D refused to sign and the Courts held it as a counter-offer to the original offer

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24
Q

Stevenson v McLean

A

Where the offeree seeks clarification of the offer, the offer is not to be regarded as rejected and is still open to the offeree to accept it

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25
Q

Communication of acceptance

A

The general rule is that an acceptance must be communicated to be effective and create a contract. Unilateral contracts do not require communication. There can be different types of acceptances such as spoken, written and by conduct.

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26
Q

Silence as Acceptance

A

In the case of Felthouse v Bindley, it states that silence cannot amount to acceptance

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27
Q

Acceptance by Post

A

The postal rule is an exception to the general rule that a contract is formed when acceptance of an offer is communicated by the offeree to the offeror e.g. Adams v Lindsell

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28
Q

Holwell Securities v Hughes

A

The legal point in this case was that the postal rule did not apply as the Courts held it is important to look at circumstance. In this case the letter was to be received by Dr Hughes in writing before there was to be valid acceptance

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29
Q

Instantaneous Communication

A

Entores v Miles: it was held that acceptance by post was not a from of valid acceptance as it was no instantaneous.

Brinkibon v Stahag Stahl: reinforce the decision made in Entores and stated that the postal rules did not apply to instantaneous form of communication

30
Q

Shuey v United States

A

The Legal point in this case is that when a unilateral contract has been made to the world, there must be reasonable steps to revoke it e.g. if the offer was made online, then the revocation should be online

31
Q

Battle of the Forms

A

This arises through constant communication between 2 parties to set out a contract. Each party focuses on matters such as price, quantity, time of delivery etc. until a party accepts the others terms.

32
Q

Social and Domestic Agreements

A

These are agreements between citizens in the real world which usually do not constitute any legal consequence e.g. Balfour v Balfour and Merritt v Merritt

33
Q

Balfour v Balfour

A

This was the case of a man and a woman coming to domestic agreement. Later on the marriage broke down and it was held by the court that there was no intention to create legal relations and it was seen as a purely domestic contract

34
Q

Merritt v Merritt

A

Similar to Balfour however the agreement made between the couple was not made on friendly terms but the marriage had broken down at this point ultimately giving it a legally binding status.

35
Q

John v Padavatton

A

A case where a mother offered her daughter $200 a month if she left Washington and went to England to study the bar. The courts held that this domestic agreement did not intend to have legal consequences and therefore the mother was entitled to the possessions.

36
Q

Simpkins v Pays

A

This was a case concerning a lodger, a grandmother and grand-daughter relating to coupons. The courts held that if money exchanges hands it is most likely a business agreements and legally binding

37
Q

Blue v Ashley

A

Any agreements and particularly ones involving large sums of money such as the alleged £15 million will more readily demonstrate the requisite intention if expressed with clarity and precision of key terms

38
Q

Commercial Agreements

A

Generally assumed there is an intention to create legal relations

39
Q

Edwards v Skyways

A

It was held that an ex-gratia payment was not intended to create legal relations and that it was too vague to be enforceable

40
Q

Jones v Vernons Pools

A

The Court held that the existence of the terms “binding in honour only” and that the entry of the coupons “shall not give rise to any legal relations” on the coupons themselves demonstrated that the parties did not have the intention to be legally bound

41
Q

Presumption in Social and Domestic Agreements

A

There is a presumption that the parties do not intend to be legally bound when dealing with social and domestic contracts. However these can be rebutted

42
Q

Executed Consideration

A

Where the promisor may have requested a specific act to be done by the promisee

43
Q

Executory Consideration

A

Where the promisor might request a promise to be done in the future

44
Q

Eastwood v Kenyon

A

A promise is not enforceable simply because it is morally right that a promisor should keep his or her word

45
Q

Currie v Misa

A

Puts forward the definition for consideration; A valuable consideration in the eyes of the law, is the benefit accruing of one party whilst the other suffers a detriment or loss

46
Q

Past Consideration is not good consideration

A

If a promise is made after an act has been performed, this is generally not enforceable. The reason for this is that the act or performance was not part of a bargain or exchange; it was gratuitous

47
Q

Re Mcardle

A

This was a case where the woman’s cleaning and refurbishment of the estate was held by the Court of Appeal as a gratuitous promise as it had been carried out without any prior promise of reimbursement. Therefore the word consideration had no significance

48
Q

Pao on v. Lau Yiu Long

A

Lord Scarman said that an act done before a promise was made was good consideration for that promise if it was done at the promisor’s request and the parties understood the act was to be paid for at a later date

49
Q

Tweddle v. Atkinson

A

It was held that the groom was not part of the agreement between the fathers and di not provide any consideration for the promise made by the father of the bride. He was merely a third party

50
Q

Contract Act 1999 (Rights of Thirds Parties)

A

This statute greatly reformed the doctrine of privity and enabled third parties in some cases to enforce terms in contracts made in their favour

51
Q

Dunlop v. Selfridge

A

In this case the issue was that Dunlop had sold tires to another business. Within the contract there was a price maintenance clause stating that this business could not sell the tires below a certain price. This business sold the tires to Selfridge to which they agreed to the price maintenance clause however later sold them for a lower price. The courts held in favour of Selfridge as Dunlop was third party to the contract.

52
Q

Adequacy of Consideration

A

It is generally not the matter for the courts to judge the adequacy for consideration

53
Q

Thomas v. Thomas

A

Consideration need only be sufficient not economically adequate. It was held that the £1 rent was recognized as good consideration

54
Q

White v. Bluett

A

Consideration must be of some economic value no matter how slight, less tangible benefits may fail to supply consideration

55
Q

Ward v. Byham

A

The Courts held that although she was under the legal obligation to take care of the child (National Assistance Act 1948, s 42) she had went well above the statutory duty by ensuring that the child was well looked after and happy.

56
Q

Chappell & Co. Ltd v Nestle

A

Consideration need not have economic value. It was held that the wrapper did form part of the consideration despite having no intrinsic economic value

57
Q

New Zealand Shipping Co. LtdvAM Satterthwaite & Co. Ltd, The Eurymedon

A

This was a case involving two parties a shipper and a carrier. Within the contract was included a bill of lading to which the carrier could use to protect itself and third parties from liability. The carrier had hired stevedores to unload the shipments which they damaged. The Shipper sued them for negligence. The Courts held in favor of the carrier.

58
Q

Statutory Duty

A

The general principle is that a person does not provide consideration for another person’s promise by simply performing an existing legal duty

59
Q

Collins v. Godefroy

A

Held that C was already under legal obligation to attend court as he was subpoenaed and this did not amount to sufficient consideration
-However there is consideration where public/statutory duty is exceeded

60
Q

Glasbrook Bros Ltd v Glamorgan County Council

A

House of Lords held that the police were entitled to the £2200 sum from the miners for protection as they had gone beyond their existing legal duty and this served as a sufficient consideration

61
Q

Contractual Duty

A

Traditional View is that the performance of an existing duty already owed to the promisor could not amount to consideration

62
Q

Stilk v. Myrick

A

It was held that the crew members were not entitled to the sum of money which arose from the 2 sailors who had deserted as they were only completing their existing contractual duty and nothing beyond

63
Q

Hartley v. Ponsonby

A

It was held that the crew was entitled to the additional £40 payment as the voyage was so dangerous that they were not simply fulfilling their existing obligations

64
Q

Williams v. Roffey Bros & Nicholls Ltd

A

C was entitled to the extra payment as they did provide consideration and there was no economic duress as the extra payments were Ds idea

65
Q

D&C Buildersv.Rees

A

The Court of Appeal held that the builders were entitled to claim the rest of the debt from the defendant, who had given no consideration in exchange for claimants’ promise to accept part payment of the debt. This is known as economic duress, they had accepted the £300 out of pressure

66
Q

Part Payment of Debt

A

The general rule is that payment of lesser sum than that which was owed could not discharge the obligation to repay the whole amount

67
Q

Pinnel’s Case

A

The Court confirmed the general rule that part payment of a debt cannot be satisfaction for the whole. However, since the payment had been made early this was sufficient to discharge the debt

68
Q

Foakes and Beer

A

House of Lords found in favor of Mrs Beer to reclaim the sum of interest charged on the initial fee. Part Payment of the debt could not be good consideration for Mrs Beer’s promise

69
Q

Promissory Estoppel

A

Promissory Estoppel operates to ensure a party does not go back on their promise when another party has relied upon that promise

70
Q

Central London Property Trust Ltd v. High Trees

A

it was held that CLPT could not go back on their promise and claim the remaining rent for the period of time which the flats were not fully occupied. However it was also held that when wartime conditions were over, CLPT could go back to charging the original full rent. This case established the doctrine of promissory estoppel

71
Q

Combe v. Combe

A

it was held by applying the doctrine of promissory estoppel it would be unequitable for the husband to go back on his clear promise which he intended to binding. However, the COA allowed the husband’s appeal as she had attempted to use estoppel to create a cause of action and not a defence. This gave rise to the quote “shield not a sword”.

72
Q
A

LLB Year 1 (2 decks)

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