essential requirements Flashcards
what are the three essential requirements of a contract?
-agreement (offer and acceptance)
-consideration (including privity of contract)
-intention to create legal relations
what is an offer?
-the party making the offer is the offeror
-who its being made to is the offeree
-offerer usually states verbally/in writing that they will be bound to the terms following a valid acceptance, and they have ITCLR
-contract isn’t formed until offeree accepts the terms
what is an invitation to treat in relation to goods on display in shops/on the internet?
-these items aren’t considered to be an offer
-taking it to the till is making the offer (pharmaceutical society of great britain v boots cash chemists ltd)
-same said about goods in shop window (fisher v bell)
what is an invitation to treat in relation to goods or services advertised in newspapers, magazines and other media?
-advertisement isn’t an offer, its up to the person seeing it to accept (partridge v crittenden)
-some exceptions - advertisements offering reward, eg missing cat, which is known as a unilateral offer (carlill v carbolic smoke ball co)
what is an invitation to treat in relation to traditional coin-operated machinery?
-eg car parking meters
-machine is the offer, inserting the coin is acceptance
-thornton v shoe lane parking
what is meant by communication of offers?
offeree cannot accept an offer than hasn’t been communicated to them
taylor v laird
what are the 4 ways an offer can be terminated?
1-counter-offer (hyde v wrench)
2-death of an offeror or offeree
3-lapse of time (ramsgate victoria hotel v montefiore)
4-revocation (offer cancelled at any time before acceptance)(dickinson v dodds)
what are the three things an acceptance must do?
-mirror the offer and be certain (Sudbrook Trading Estate v Eggleton)
-not change the terms of the offer
-be communicated properly back to the offeror
why must the acceptance be unconditional?
-Hyde v Wrench
-so it doesn’t alter the offer
-although, making enquiries about the offer may not amount to a counter-offer, so may not be taken as rejecting the original offer (Stevenson v McLean)
what is meant by ‘battle of the forms’?
-companies draw up ‘standard forms’ which they use when making many similar offers, containing the terms and conditions they wish to contract on (usually to their advantage)
-if 2 businesses contract together and each have standard forms, which standard form should be used? (Butler Machine Tool Co. Ltd v Ex-Cell-O Corp.)
what is meant by communication of the acceptance?
-contract is only formed if the acceptance is communicated back to the offeror
-generally acceptance can take any form, (bar silence) unless a specific method is stipulated
-usually accepted through conduct (Carlill v Carbolic Smoke Ball Co.) or an agreed method
what is the postal rule?
(Adams v Lindsell)
-an acceptance is valid and the contract is formed when the acceptance letter is posted and not when it is received by the offeror
-rule is only accepted where it is agreed upon/is a normal method of communication for the parties
what did Pretty Pictures v Quixote Films Ltd contribute to the postal rule?
-an exchange of emails wouldn’t amount to a binding contract where the parties intended their agreement to be conducted by post
what did Greenclose v National Westminster Bank plc contribute to the postal rule?
-on balance, emails should not be subject to an equivalent of the postal acceptance rule
where won’t the postal rule suffice?
-if it’s clear the acceptance must be communicated to the offeror before a contract is formed, by excluding the rule in the terms of the contract
-Holwell Securities v Hughes
what did the Electronic Commerce Directive 2000 contribute to the postal rule?
where a contract is formed through electronic means, an offer is made when a consumer makes/sends an order
what is a consideration?
the price an offeree pays for the goods/services
no consideration = an offer is unenforceable
-Currie v Misra - ‘benefit and detriment’
how did Dunlop v Selfridge define consideration?
‘an act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable
what are the 5 rules for considerations?
-consideration must be sufficient
-consideration need not be adequate
-consideration must not be past consideration
-consideration must move from the claimant
-performance of existing obligations: an existing duty will not amount to valid consideration
what is meant by ‘consideration must be sufficient’?
-must be a form which the courts accepted as ‘sufficient’
-must be real, tangible and have some inherent value
-Ward v Byham
what is meant by ‘consideration need not be adequate’?
-if the price of goods/services doesn’t reflect the value, then in absence of duress or undue influence, the courts will seek t enforce the original agreements terms
-Thomas v Thomas
what is meant by ;consideration must not be a past consideration’?
-eg if a voluntary agreement was struck with no mention of payment, then a later promise to pay is unenforceable
-Roscorla v Thomas
-exception = when a party has requested a service where there is a reasonable implication that a payment be made, even though it hasn’t been stated in the agreement (Lampleigh v Braithwaite)
what is meant by ‘consideration must move from the claimant’?
-only the person that provoked the consideration can sue if they feel the agreement has been broken (no third party)
-however after the Contracts (Rights of Third Parties) Act 1999 was passed, its possible for a third party that has provided no consideration may sue to enforce the contract
-Tweddle v Atkinson could sue
what is meant by ‘performance of existing obligations: an existing duty will not amount to valid consideration’?
-if a party is under an existing obligation to carry out something, they cannot use that promise as consideration for a new agreement
-Stilk v Myrick compared to Hartley v Ponsonby
-can also apply to legal obligations to carry out an act (Collins v Godefroy)
-however if a party does something extra than what was required in the original agreement, that may be considered to be a new consideration (hartley v ponsonby)
