Contract Law: formation of the contract

Question 1

What is a contract?

Answer 1

A contract is a legally enforceable agreement.

Question 2

What three requirements must be satisfied for a an agreement to be legally enforable?

Answer 2

1. There must be an agreement between two or more persons. (each of which is called a party to the contract)
2. Both parties must intend that their agreement be legally enforceable.
3. Both parties must pay a price or make a promise (this practise is called a consideration)

Question 3

What is an agreement?

Answer 3

An agreement is a meeting of minds and exists when two or more people share a mutual understanding and intention.

Question 3

What is an agreement?

Answer 3

An agreement is a meeting of minds and exists when two or more people share a mutual understanding and intention.

Question 4

When has an agreement been formed?

Answer 4

1. When one person (the offerer) has made an offer.
2. Another person (the offeree has accepted the offer)
3. The offeree has communicated their acceptance of the offer to the offeror.

Question 5

Whis is the offeree?

Answer 5

When an offer is made by one person to another or by one person to a group of people the receiver is the offeree.

Question 6

What is acceptance?

Answer 6

If an offer is accepted, an agreement (and possibly a contract) comes into existance from that moment.

Question 7

What is rejection?

Answer 7

If an offer is not accepted by offeree it may be rejected by the offeree.

Question 8

What is an option?

Answer 8

An option is an offer kept open by a deposit paid by the offeree untill an agreed deadline.

Question 9

What is a lapsed offer?

Answer 9

An offer that has not been accepted, rejected or validly revoked.

Question 10

Is advertising a contractual offer?

Answer 10

Mostly no. An advertisement is an invitation to treat.

Question 11

What is a collateral contract?

Answer 11

A collateral contract is a subsidiary contract which induces a person to enter into a main contract or which depends upon the main contract for its existence.

Question 12

What is communication of acceptance?

Answer 12

The agreement is not complete until the offeree communicatees their aceptance to the offeror.

Question 13

What is a unilateral contract?

Answer 13

A unilateral contract is a contract where the offeree’s acceptance and performance are the same thing.

Question 14

What is the postal rule?

Answer 14

A contract is formed as soon as an offeree posts a letter of acceptance, not when the letter is received.

Question 15

Is an agreement in a social context enforeable?

Answer 15

If an agreement is made between two friends in a social setting, or between members of a household such as a brother and sister or a husband and wife, it is likely that the agreement is not intended to be a contract.

Question 16

Is an agreement in a commercial or business context enforable?

Answer 16

If an agreement is made in a commercial or business contect it is likely that it was intended to be legally enforceable.

Question 17

What is a Preliminary Agreement?

Answer 17

Sometimes parties who have been negotiating a deal appear to have reached an agreement but the agreement is expressed to be ‘aubject’ to some other event, such as ‘subject to the written agreement being approved by our solicitors.’

Question 18

What is puffery or mere puff?

Answer 18

This is when a claim is made by an advertisier that is clearly not true. For example if your car falls off a cliff and survives in the advertisement, it is not meant to be taken seriously as a spcial ability of the car.