contracts

Question 1

Formation of a contract

Answer 1

Offer and acceptance. 
Consideration.
An intention to create legal relations. 
Certainty as to the terms. 
Capacity to contract. 
The contract must be legal.

Question 2

Void

Answer 2

Has no legal effect because there is no contract.

Question 3

Voidable

Answer 3

Binding on one party while the other has the option to set aside.

Question 4

unenforceable

Answer 4

A valid contract which the courts will not enforce

Question 5

Bilateral contracts

Answer 5

Most legally binding agreements are made up of mutual promises.

Question 6

Unilateral Contracts

Answer 6

Only one party may promise to do something in return for an ACT by the other party.

Question 7

offer and acceptance

Answer 7

The need for agreement.
Offer by one party and acceptance by the other party. Mirror image rule.
An expression of willingness to contract on specified term, made with the intention that it is to be binding as soon ass it is accepted by the person to whom it is addressed.
An invitation to treat is not an offer.

Question 8

Carlil v Carbonic smoke ball company [1893[

Answer 8

Company published an influenza prevention product promising £100 to those who still caught the flu.
Carol brought the product but caught the flu so claimed £100.
Court held the advertisement was an offer not a marketing puff.

Question 9

Tendering process

Answer 9

Requests for tenders is normally an invitation to treat, the person is free to accept/reject.

Question 10

Harvela Investments Ltd v Royal Trust Co. of Canada [1984]

Answer 10

RTC sent out an invitation to tender, bound to accept highest offer.
Harvela offered £3,175,000
D2 offered less than this.
RTC accepted D2’s offer.
Held the tender was unilateral offer to accept the highest bid which meant the referential bid was invalid. Harvela was the highest bid so RTC bound to accept it.

Question 11

communications to offer

Answer 11

Any offer must be communicated effectively.
Can be in writing orally or by conduct.
Can be to a person, group or whole world (Carlil)

Question 12

acceptance

Answer 12

IS the unconditional assent to all the terms of the offers.
Any offer must be communicated effective.
Can be in writing orally or by conduct.
Can be to a person, group or whole world.
Acceptance can be verbal, in writing or inferred from conduct.

Question 13

counteroffers

Answer 13

Oferee introduces new terms does not constitute an acceptance and destroys the original offer.

Question 14

Communication of acceptance

Answer 14

Acceptance needs to be communicated to the offeror
Silence does not amount to acceptance. Felthouse v Bindley [1862] uncle (F) offered to buy nephews horse. Nephew did not reply but advised auctioneer to keep his horse out of sale

Question 15

Felthouse v Bindley [1862]

Answer 15

uncle (F) offered to buy nephews horse. ‘if i hear no more its mine’
Nephew did not reply but advised auctioneer to keep his horse out of sale.
Court: no contract, nephew had not communicated acceptance.

Question 16

Brinkibon Ltd v Stehag Stahl

Answer 16

A telex acceptance was sent from London go Vienna

Held: that the contract had been concluded where the telex acceptance ad been received in Vienna.

Question 17

Adams v Lindsell (1818)

Answer 17

D wrote to P offering to sell wool
Letter misdirected – delayed.
On arrival, P posted letter of acceptance.
After acceptance sent, but before arrival with D, D sold wool to a third party.
Court held: contract was concluded between D and P when the letter of acceptance was posted by P.

Question 18

Termination of an offer: revocation

Answer 18

Must be done before Acceptance.
Must be Communicated.
Usually by offeror but can be a reliable third party.
Revocation of the unilateral offer.
Communication of revocation in unilateral contracts.
Offeror must take Reasonable steps to bring the withdrawal to attention fo those that had seen the offer.

Question 19

Termination: lapse of time

Answer 19

If offer open for a specific period, offer lapses at end of time.
If no time period is set the offer will lapse after a reasonable time depending on the subject matter

Question 20

other Methods of termination

Answer 20

Acceptance. 
Rejection.
Counteroffer.
Death. 
Failure of a condition precedent.