Contracts 1st Semester

Question 1

Offers may be revoked at anytime before acceptance. The exception is where the offeror has stipulated time during which offer is to remain open for acceptance. In the absence of stipulation, what happens?

Answer 1

In the absence of any such stipulation offers lapse after a reasonable time.

Wylie & Lochead v McElroy and Sons
Issue: Offered iron works for McElroy and Sons. Offer wasn’t accepted until 5 weeks later when the price of iron had increased; offer lapsed.

Question 2

What does the case of May & Butcher Ltd v The King show?

Answer 2

That agreements to agree are not enforceable contracts.

Question 3

What is personal bar?

Answer 3

Personal bar is when a rightholder is barred from exercising a right.

Question 4

What are the two elements to personal bar?

Answer 4

Inconsistency - behaviour on part of rightholder that is inconsistent with the exercise of the right.

Unfairness to the other party.

Question 5

In essence, what is the point of personal bar?

Answer 5

The rightholder has acted (or refrained from acting) to give the other party the clear impression that they will not be exercising the right and it would now be unfair to allow him or her to do so.

Question 6

What are the three types of obligations and what do they mean?

Answer 6

> Pure obligation - due at once
Future obligations - due on occurence of a certain event
Contingent obligations (Either suspensive or resolutive)

Question 7

What is a suspensive/resolutive obligation?

Answer 7

Suspensive - Due on occurence of uncertain event

Resolutive - Due until occurence of uncertain night

Question 8

What are two presumptions made with intention to create legal relations?

Answer 8

> Social agreements are not contracts

> Commercial agreements are contracts

Question 9

What does certum est quod certm redii potest mean?

Answer 9

If something is capable of being made certain, it should be treated as certain.

Question 10

Is an agreement to agree enforceable?

Answer 10

No.

Question 11

What is an independent mechanism?

Answer 11

An independent mechanism is a valid 3rd party which would set the prices or any other necessity of a contract in an unbiased manner.

Question 12

What steps can be included to ensure a contract that leaves out things like the price set is enforceable?

Answer 12

Introduction of an independent mechanism.

Question 13

What is a declarator?

Answer 13

An action by the courts whereby a legal right or status is declared but nothing further done.

Question 14

What is the exception to the rule that offers may be revoked at anytime before acceptance?

Answer 14

Exception is where offer has stipulated time during which offer is to remain open for acceptance.

Question 15

Can acceptance be stipulated by silence?

Answer 15

No

Question 16

Is writing required for the formation of a contract?

Answer 16

No

Question 17

What is necessary for the validity of the contract?

Answer 17

A subscription by each grantor.

Question 18

What does a coutner offer do to the original offer?

Answer 18

Extinguishes the original offer

Question 19

What are some presumptions made it when it comes to offers and invitations to treat?

Answer 19

> Goods on display in a shop are invitations to treat.
Advertisements are almost always invitations to treat.
Invitations to tender are invitations to treat.

Question 20

Can offers be revoked at anytime before acceptance?

Answer 20

Yes

Question 21

What is consensus in idem and why is it important?

Answer 21

Consensus in idem is latin for a meeting of the minds. It’s important because both parties must agree on the same thing and for a contract to be enforceable, it must be reasonably definite.

Question 22

What is an offeror and offeree?

Answer 22

> Party making offer is offeror

> Party whom offer is being made to is offeree

Question 23

What does unqualified acceptance do to an offer?

Answer 23

Converts an offer into a contract

Question 24

What happens if someone with no legal capacity enters a contract?

Answer 24

Contract is void.

Question 25

At what age do you have legal capacity?

Answer 25

16.

Question 26

Is protection offered to 16/17 year olds?

Answer 26

Yes to some extent.

Question 27

What is a prejudicial transaction?

Answer 27

A prejudicial transaction is defined as a transaction which an adult wh was exercising reasonable prudence wouldn’t have entered the contract and causes substantial loss.

Question 28

What are the governing authorities inr egards to contract and capacity?

Answer 28

The governing authority here is the ‘Age of Legal Capacity (Scotland) Act 1991’ and the ‘Adults with Incapacity Act 2000’

Question 29

What is a promise?

Answer 29

A promise is a unilateral obligation which needs no acceptance and is irrevocable once made, however, if the promise is rejected then the promisee no loger needs to fill out their obligation.

Question 30

What are the main and minor excetions to the general rule when it comes to capacity entering contracts?

Answer 30

Main - Children and incapable adults

Minor - Intoxicated, enemy aliens

Question 31

What is the general rule when it comes to capacity with entering contracts?

Answer 31

The general rule is that all persons have capacity to enter contracts; the main exceptions are the incapable adults and children.

Question 32

What statute is best used to show that there is no contract for lack of consensus on nature? What was the problem on the case and what was the decision?

Answer 32

Mathieson Gee (Ayrshire) Ltd v Quigley 
The respondent offered one sort of contract and the appellant accepted another. This means there was a lack of consensus on nature, in other words there was no consensu in idem.

Question 33

What does the Fisher v Bell case show?

Answer 33

Goods on a display in a shop are invitations to treat.

Question 34

What was the issue in Robertson v Anderson and what was the decision?

Answer 34

The parties had agreed to share any winnings from their Bingo activities. One sought to reject the contract as an unenforceable gaming contract. The decision was held because although there was no intention to create legally binding obligations, it was necessary to look at the actual intentions of the parties and such an intention might be inferred.

Question 35

What does the Partride v Crittenden case show?

Answer 35

Advertisements are almost always invitations to treat.

Question 36

What does the Foley v Classique Coaches case show?

Answer 36

Purchaser agrees to buy petrol from seller but prices arent fixed so ot enforceable; however independent mechanism was put in place therefore contract was enforceable.

Question 37

What happens if a contract is rendered void?

Answer 37

The contract is a complete nullity, it is treated as if it never existed.

Question 38

What happens if a contract for possession of house has already occured between a and b, but by the time the court has intervened, b has sold the house to c?

Answer 38

Property which was transferred under a void contract is obliged to restore it to its original offer, however an equitable solution may be decided.

Question 39

What is an equitable solution?

Answer 39

An example of an equitable solution would be that if goods are delivered under a void contract, the courts may stipulate that the buyer must pay the appropriate market price for the goods.

Question 40

What is a voidable contract?

Answer 40

A contract which is voidable is valid and effective until it is set aside by the courts.

Question 41

What are the four requirements which must be satisfied before a voidable contract can be set aside?

Answer 41

(a) Restoration to the original position must be possible. Where a car has been sold under a voidable contract and is then written off in an accident, it will not be possible to return the parties to their original position. It will therefore not be possible to have the contract set aside;
(b) There must have been no unnecessary delay in taking action to annul the contract;
(c) The rights of third parties must not be affected; and
(d) The contract must not have been affirmed under the Age of Legal Capacity (Scotland) Act 1991, nor though the operation of personal bar under the Requirements of Writing (Scotland) Act 1995.

Question 42

What does the case of Earl of Orkney v Vinfra show?

Answer 42

That the use of force and fear nullifies the validity of a contract

Question 43

What happened in the case of the Earl of Orkney v Vinfra?

Answer 43

The Earl of Orkney threatened Vinfra with death if he did not sign a contract.

Question 44

If the threat of a lawful act occurs, can a claim be made for force and fear? Provide an example

Answer 44

A claim cannot be made for force and fear.
IE - A creditor can tell his debtor that he will raise an action for payment unless the debtor agrees to pay off the debt.

Question 45

What is a case which shows that the threat of a lawful act can’t be used as a claim for force and fear?

Answer 45

Hunter v Bradford Property Trust

Question 46

What was the issue in Hunter v Bradford Property Trust?

Answer 46

> Two sisters were in financial diffiuculties and they signed a company with a roperty agreement.
Terms were they would recieve money when property is sold. Director finds contract doesn’t accurately record the agreement he thought had been reached.
Director says “Sign this new contract or we will cancel the sale”

Decision goes against Hunter.