Contract/Offer Flashcards
What is the definition of a contract?
A ‘contract’ can be defined as: ‘A legally binding agreement between two or more parties (who have the capacity to enter into such an arrangement) in the form demanded by law, to perform acts which are not trifling, indeterminate, impossible or illegal.’
(MacQueen and Thomson, para.1.9)
What type of voluntary obligation is a contract?
bilateral/multilateral (2 or more people involved)
What is essential for the formation of a contract?
Agreement between two or more persons i.e. consensus in idem (meeting of the minds)
How do the courts determine agreement?
By using an objective test
What is an objective test?
By looking at the facts/circumstances (the parties words and deeds) of the case, will a reasonable person conclude that an agreement was reached by the parties in the case?
Will the courts enforce that there was an agreement even if the parties thought there was one?
No the courts will not enforce it, if they find in fact agreement was never made, even if the parties thought there was one
For the formation of an agreement do the parties have to agree on all terms?
Parties need not agree on every term for a contract to come into being: They must, however, agree on all of the essential (or ‘material’) elements of the contract.
How do we know what is essential in the formation of a contract?
This depends in the type of contract.
If the contract us one of the sale of goods then it is essential that the good or land is identified and the fact that a price must be paid.
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How is it determined that an agreement was reached?
where one party responds to the other’s definite offer with an unqualified acceptance of that offer
Which circumstance will the courts not accept an offer enforceable? Why?
When an offer is met with a qualified acceptance i.e. a counter-offer, or talk past the original offer then no agreement will be reached. Because this amounts to a rejected offer.
