Contract Law Flashcards
When is a contract formed?
When an agreement is made between two or more parties.
An agreement is made when one party accepts an offer made by another party.
When is an offer, not an offer?
When it is an invitation to treat.
In other words, when one party invites another party to make an offer.
‘I will sell you my laptop for a good price’
When will an advert be an offer?
Where the advert has specifics.
E.g., You will receive £100 if you still catch the flu after using our product.
Is the display of goods in a store an offer or an invitation to treat?
An invitation to treat.
The contract is formed when the customer offers their money to the cashier and the cashier accepts it.
When is a contract formed when buying online goods?
The contract is formed when the customer receives confirmation that the goods have been shipped.
NOTE: there is a cooling off period of 14-days where the customer can cancel the transaction.
Can the original offer be accepted if a counter offer is made?
No. A counter-offer will bring the original offer to an end thus making it incapable of acceptance.
However, asking for more information will not amount to a counter offer and so the original offer will still be open for acceptance.
Can silence amount to acceptance?
No. A person’s silence will not amount to acceptance.
Can acceptance be inferred through conduct?
Yes. You can accept an offer via your conduct.
Where there is a prescribed method of acceptance, and the offer is accepted via alternative means, will the acceptance be valid?
It depends.
If the person offering did not make it clear that only acceptance in that mode shall be binding, the person can accept by any means.
If acceptance was requested via post, and instead acceptance is done via telephone, this will be valid as a phone call is quicker than post.
What is the postal rule in regard to acceptance? What are the exceptions to this rule?
Acceptance occurs as soon as the letter is posted, even if it is never received.
Exceptions:
- Where it is unreasonable to post the acceptance.
- Where the letter is incorrectly stamped/addressed.
- Where the offeror stipulated that acceptance will only occur when they have received the letter.
When is acceptance via fax deemed valid?
Only once the fax had been received.
When is acceptance via email deemed valid?
Only once the email has been seen - must be in office hours.
What are the rules for acceptance in regard to unilateral contracts?
No acceptance is required.
Performance of the condition will be enough.
However, the person must have knowledge of the offer at the time of performing the condition.
E.g., you will receive £100 if you catch the flu after using our product.
- If the person is aware of the offer, uses the product, and catches flu, they will be entitled to £100
However, if a person used the product, caught flu, but was not aware of the offer at the time of using the product, they will not be entitled to £100.
What is consideration in relation to contracts?
The substance of the contract - the price paid for the other party’s promise to do (or not do) something.
Explain the rule that consideration must not be in the past.
If the thing you gave in exchange for the promise was given before the promise, the promise will be unenforceable.
Examples:
Ian borrows £1,000 to provide his step-daughter with an education. When she is older, the step-daughter promises to reimburse Ian when she marries.
As the £1,000 was borrowed before the step-daughter made her promise to reimburse Ian, the promise in unenforceable.
Emily spends £400 renovating the house. Two years later, Edward promises to reimburse Emily when the house is sold.
As Emily spent £400 before the promise to reimburse was made, the promise is unenforceable.
