Essential Requirements of Contract Flashcards
What are the 4 elements of a contract?
Offer
Acceptance
Consideration
Intention (to create legal relations)
Define a contract
A legally binding agreement between parties
What does it mean to say that contract law is laissez-faire?
Promotes idea that parties are free to make any contract on any terms.
Not really true as a lot of rules to apply
What are the 2 types of contract?
Unilateral-Only offerer has an obligation to accept.
Bilateral-Both parties have to agree to an obligation
What case shows an example of a bilateral contract?
Partridge v Crittenden
Partridge v Crittenden
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.
Carlill v Carbolic Smoke Ball Co
£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)
Rules of an Offer (7)
- 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
Define an invitation to treat
An advert/statement of price. Does not have to be upheld to all parties that approach.
Fisher v Bell
Flick knives in shop window.
Illegal to SELL them
No offence-was an invitation.
Set precedent that shelves=inv
Pharmaceutical Society v Boots
-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.
Taylor v Laird
Working as crew member to get home-wasn’t paid wages as offer wasn’t communicated (part of 7 rules of an offer)
Guthling v Lynn
Offer must be certain-
Buying a ‘lucky’ horse (vague, hard to determine)
Routledge v Grant
Offer can be withdrawn at any time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Held-Able to withdraw as validly withdrawn
Byrne v Van Tienhoven
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.
Dickenson v Dodds
Communication of withdrawal can be made by a reliable 3rd party
House withdrawn by 3rd party
Harvey v Facey
Responses in request for info
H: I want to buy Bumper Hall, what’s ur lowest price.
F:£900
H:Agreed
No contract
Stevenson v McLean
Request for further info
Asked to stagger payments- request not a counter offer.
Ways to terminate offers(8)
Acceptance, Revoked, Rejection/Refusal, Counter offer, Lapse of time, Death, Failure of conditions, Battle of form
Hyde v Wrench
Rejection/refusal+Counter offer
Rejected counter offer, and refused to sell for original price. No breach
Counter offer kills the original offer
Ramsgate Hotel v Montefiore
Lapse of time
Letter of acceptance 6 weeks after, share prices had fallen. Offer no longer valid (after a reasonable lapse of time)
Bradbury v Morgan
Death
Continued giving offs goods but not receiving payment. Held: no notice of death so no attempt to terminate contract
Financings Ltd v Stimson
Termination of offer- Failure of conditions
Dealer said only binding when signed by finance company
As finance had not signed, not binding
Butler v Ex-Cell-O
He who fires last shot wins
Whoever has the final offer has the terms to be followed
Rules of Acceptance 5
Unconditional Communicated to offerer(silence not) Offeree must be aware of offer Acceptance by authorised person Any form-unless required in specific form
Felthouse v Bindley
Silence is not acceptance
“If I hear no more, I will consider the horse mine.” No acceptance
Inland Revenue v Fry
Offeree must be aware.
Note and cheque separated so I.R never knew of note, cannot agree to something haven’t seen
Powell v Lee
Acceptance by authorised person
Governor of school didn’t have authorisation to offer job
Yates v Pulleyn
Any form unless required so
Acceptance to be sent by registered post.
C sent by ordinary post.
What is the presumption for intention for social and domestic agreements, compared to commercial and business agreements?
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
Balfour v Balfour
Husband promised money to wife. She sued to keep after divorce
Held:no agreement as it was when they were married
Merritt v Merritt
Separated couple made agreement
Held:binding as intention was there, they were separated already
Jones v Vernon’s Pools
Back of lottery coupon had clause “Binding in honour-no intention to create legal relations”
Held:no intention
Edwards v Skyways
Pilot made redudant-not given ex-gratia
Held:was intention as commercial
Define consideration
Exchange of one thing for another
Rules of Consideration
- Must be sufficient but not adequate
- Existing contractual duty is not consideration
- Part payment is not consideration
- Past consideration is no consideration
Chappel v Nestle
Sufficient but not necessarily adequate.
Wrappers were sufficient consideration in exchange for music records
Williams v Roffey Bros
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.
D v C Builders v Rees
Part payment is not consideration, as contractually was already bound to pay so no extra exchange
Hirachand Punamchand v Temple
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)
Re McArdle
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
Adams v Lindsell
Postal rule-acceptance when letter is posted
Postal rule case
Household Fire Insurance v Grant-rule still applies if never received/lost
Modern methods of communcation cases
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
Consumer protection regulations S7 and S8
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
