Essential Requirements of Contract

Question 1

What are the 4 elements of a contract?

Answer 1

Offer
Acceptance
Consideration
Intention (to create legal relations)

Question 2

Define a contract

Answer 2

A legally binding agreement between parties

Question 3

What does it mean to say that contract law is laissez-faire?

Answer 3

Promotes idea that parties are free to make any contract on any terms.

Not really true as a lot of rules to apply

Question 4

What are the 2 types of contract?

Answer 4

Unilateral-Only offerer has an obligation to accept.

Bilateral-Both parties have to agree to an obligation

Question 5

What case shows an example of a bilateral contract?

Answer 5

Partridge v Crittenden

Question 6

Partridge v Crittenden

Answer 6

Sale of illegal birds.

Held: Was an invitation to treat, not an offer to sell, as advertiser could not reasonably be bound to sell to all those who may accept.

Question 7

Carlill v Carbolic Smoke Ball Co

Answer 7

£100 reward to anyone who gets ill after having sniffed the balls regularly. C used smoke balls and used them according to instructions and caught flu. D tried to claim it was an inv. to treat, however D lost as advert showed a course of actions to claim the money.(unilateral offer through reward poster/advertisements). (C had accepted through action/performance) (Offer can be made to anyone and made by any method)

Question 8

Rules of an Offer (7)

Answer 8

• Must be communicated
• Made to anyone through any method
• Reward/Advertisements(Unilateral offers)
• Must be certain
• Possible to withdraw at any time
• Offeror must communicate withdrawal
• Communication can he made by third party

To remember:3 rules are to do with withdrawal

Question 9

Define an invitation to treat

Answer 9

An advert/statement of price. Does not have to be upheld to all parties that approach.

Question 10

Fisher v Bell

Answer 10

Flick knives in shop window.
Illegal to SELL them
No offence-was an invitation.
Set precedent that shelves=inv

Question 11

Pharmaceutical Society v Boots

Answer 11

-shelves for self service
-items have to be sold by a chemist
therefore shelves are an inv. to treat as them taking it to the till is not acceptance.

It is the customer offering, and the sales person accepting.

Question 12

Taylor v Laird

Answer 12

Working as crew member to get home-wasn’t paid wages as offer wasn’t communicated (part of 7 rules of an offer)

Question 13

Guthling v Lynn

Answer 13

Offer must be certain-

Buying a ‘lucky’ horse (vague, hard to determine)

Question 14

Routledge v Grant

Answer 14

Offer can be withdrawn at any time

D sent an offer with a 6 week time clause, he withdrew it.

Held-Able to withdraw as validly withdrawn

Question 15

Byrne v Van Tienhoven

Answer 15

Offeror must communicate withdrawal of offer

Posting a letter to order goods and then changing mind. Had to pay their costs as too late as already accepted.

Question 16

Dickenson v Dodds

Answer 16

Communication of withdrawal can be made by a reliable 3rd party

House withdrawn by 3rd party

Question 17

Harvey v Facey

Answer 17

Responses in request for info
H: I want to buy Bumper Hall, what’s ur lowest price.
F:£900
H:Agreed

No contract

Question 18

Stevenson v McLean

Answer 18

Request for further info

Asked to stagger payments- request not a counter offer.

Question 19

Ways to terminate offers(8)

Answer 19

Acceptance,
Revoked,
Rejection/Refusal,
Counter offer,
Lapse of time,
Death,
Failure of conditions,
Battle of form

Question 20

Hyde v Wrench

Answer 20

Rejection/refusal+Counter offer
Rejected counter offer, and refused to sell for original price. No breach
Counter offer kills the original offer

Question 21

Ramsgate Hotel v Montefiore

Answer 21

Lapse of time

Letter of acceptance 6 weeks after, share prices had fallen. Offer no longer valid (after a reasonable lapse of time)

Question 22

Bradbury v Morgan

Answer 22

Death

Continued giving offs goods but not receiving payment. Held: no notice of death so no attempt to terminate contract

Question 23

Financings Ltd v Stimson

Answer 23

Termination of offer- Failure of conditions
Dealer said only binding when signed by finance company

As finance had not signed, not binding

Question 24

Butler v Ex-Cell-O

Answer 24

He who fires last shot wins

Whoever has the final offer has the terms to be followed

Question 25

Rules of Acceptance 5

Answer 25

Unconditional
Communicated to offerer(silence not)
Offeree must be aware of offer
Acceptance by authorised person
Any form-unless required in specific form

Question 26

Felthouse v Bindley

Answer 26

Silence is not acceptance

“If I hear no more, I will consider the horse mine.” No acceptance

Question 27

Inland Revenue v Fry

Answer 27

Offeree must be aware.

Note and cheque separated so I.R never knew of note, cannot agree to something haven’t seen

Question 28

Powell v Lee

Answer 28

Acceptance by authorised person

Governor of school didn’t have authorisation to offer job

Question 29

Yates v Pulleyn

Answer 29

Any form unless required so
Acceptance to be sent by registered post.

C sent by ordinary post.

Question 30

What is the presumption for intention for social and domestic agreements, compared to commercial and business agreements?

Answer 30

Social-no intention, unless courts find evidence of intent (e.g exchange of money)

Business-intention, unless situations suggest parties would not intend legal relations

Question 31

Balfour v Balfour

Answer 31

Husband promised money to wife. She sued to keep after divorce
Held:no agreement as it was when they were married

Question 32

Merritt v Merritt

Answer 32

Separated couple made agreement

Held:binding as intention was there, they were separated already

Question 33

Jones v Vernon’s Pools

Answer 33

Back of lottery coupon had clause “Binding in honour-no intention to create legal relations”
Held:no intention

Question 34

Edwards v Skyways

Answer 34

Pilot made redudant-not given ex-gratia

Held:was intention as commercial

Question 35

Define consideration

Answer 35

Exchange of one thing for another

Question 36

Rules of Consideration

Answer 36

1. Must be sufficient but not adequate
2. Existing contractual duty is not consideration
3. Part payment is not consideration
4. Past consideration is no consideration

Question 37

Chappel v Nestle

Answer 37

Sufficient but not necessarily adequate.

Wrappers were sufficient consideration in exchange for music records

Question 38

Williams v Roffey Bros

Answer 38

D offered extra payment for prompt work. No consideration as no extra exchange, it was already part of the existing contract to do the work.

Question 39

D v C Builders v Rees

Answer 39

Part payment is not consideration, as contractually was already bound to pay so no extra exchange

Question 40

Hirachand Punamchand v Temple

Answer 40

Exception to part payment:where something new is added

Father paid sum of money towards sons debt. Held was consideration as was not in original contract, so there was an agreement and exchange (consideration)

Question 41

Re McArdle

Answer 41

Past consideration is no consideration
Promise to pay for work done happened after consideration (work had finished), so was not valid, didn’t have to pay for work

Question 42

Adams v Lindsell

Answer 42

Postal rule-acceptance when letter is posted

Question 43

Postal rule case

Answer 43

Household Fire Insurance v Grant-rule still applies if never received/lost

Question 44

Modern methods of communcation cases

Answer 44

Entores v Miles Far East-acceptance by electronic means is when it arrives

Brinkibon v Stahag-if arrives out of office hours-acceptance is next working day

Question 45

Consumer protection regulations S7 and S8

Answer 45

Distance selling
S7-14 day cool off. Allows withdrawal of acceptance if no face to face contact with buyer and seller

S8-contract concluded when written confirmation given