Contract Validity Flashcards
Definition of a contract
A contract is a legally enforceable agreement between two or more distinct parties. The formation of a contract requires an offer to be made by one party which is then accepted by another. The offer must be a proposal that is both precise and definite and capable of acceptance.
Can talk about how a contract must be bilateral (flows both ways) & that both parties must have the same understanding of the contract (because if not then it is at risk of being void)
(An invitation to treat/adverts/placement of products in a shop window is not an offer meaning that is it not capable of acceptance)
5 Main features of a Contract
1) Consensus in idem (both parties are talking about the same thing & have the same understanding of the contract)
2) Consent (not being forced)
3) Capacity (age, mental status)
4) Formal requirements where they apply (Where applicable it must be in writing eg Selling property)
5) Not prohibited by law (pacta illicita) (not illegal)
Mathieson Gee (Ayrshire) Ltd V Quigley (1952)
Consensus in idem
CASE: Q has silt at the bottom of his pond that he needs to get rid of. M Gee Ltd write to Q stating that they will supply equipment to remove silt. Q writes back accepting their offer to remove the silt.
HELD: There was never a meeting of minds and so no contract.
Gray v. Binny (1879)
Consent- Undue influence
Macgilvary v. Gilmartin (1986)
Consent- Facility and circumvention
Earl of Orkney v. Vinfra (1606)
Consent- Earl of Orkney v. Vinfra (1606)
Taylor v. Provan (1864)
Capacity (intoxication)
CASE: Provan went to Taylor’s farm and offered to buy 31 cattle at £14 per head, but Taylor refused to accept less than £15. After trying unsuccessfully to purchase cattle elsewhere, Provan returned to Taylor’s farm the worse for drink and offered £15 per head, which was accepted by Taylor. Taylor later brought an action against Provan for the price of the cattle, and Provan claimed that he had been incapable, through intoxication, of entering into the contract.
HELD: There was no evidence to suggest that Provan was totally incapacitated through drink, to the extent that he was unable to understand what he was doing. The contract was valid
Pollock v. Burns (1875)
Capacity (intoxication)
CASE: Pollock, described as a “habitual drunkard”, brought an action on to suspend a charge on a bill of
exchange he alleged he had signed when incapable through drink.
HELD: Pollock could not successfully challenge the bill, as he had waited until six months after the bill became due.
Capacity Intoxication
Principal Established from both cases
The principle established is that contracting with an intoxicated individual renders the contract voidable because the other party would have known that there was a lack of capacity. Should an intoxicated individual wish to cancel the contract then they must take immediate action…doing nothing will support the establishment of a contract.
Age of Legal Capacity (Scotland) Act 1991
Children aged under 16 may be void (To be enforceable the contract must be of a kind usually entered into by persons of that age on terms that are not unreasonable)
Young people aged 16 – 18 may be voidable (To be voidable the young person must prove: It is highly unlikely that a reasonable adult would have entered the contract under the same circumstances. The contract is likely to cause harm to the young person)
