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Year 1 - Business Law > exam > Flashcards

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1
Q

Definition of Contract

A

A legally binding agreement between parties enforceable in court.

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2
Q

more context to defintion of a contract

A

Like a promise that, if broken, can be resolved in court.

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3
Q

signigicance of contracts in a free market econ

A

Contract law is crucial in a free market as it allows buying, selling, and profit-making based on agreed promises.

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4
Q

more context to significance of a contract in a free market econ

A

Without enforceable promises, people can’t carry out agreements and make a living in a free market.

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5
Q

Types and Forms of Contracts

A

Contracts don’t need a specific form except for specific types (e.g., land sale contracts).

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6
Q

examples of contract that need a specific form

A

Contracts for land sale, consumer credit agreements, and copyright agreements must be in writin

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7
Q

validitiy of a written contract

A

Signing a written contract means agreeing to its terms, even if not fully read.

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8
Q

give example of validity of a written contract

A

Like Miss L’Estrange who couldn’t complain in court about a faulty vending machine because she signed a contract excluding certain rights. - without reading it

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9
Q

advantages of written contracts

A

provide evidence of agreements, making it easier for courts to resolve disputes.

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10
Q

making a contract valid

A
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11
Q

how many essentials of a contract are there

A

4

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12
Q

what are the essentials of a contract

A

Four things must exist for an agreement to be a contract: offer, acceptance, consideration, and intention to create legal relations.

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13
Q

what happens if any of the 4 contracts of agreement are missing

A

If any of these is missing, it’s an agreement but not a contract enforceable in court. These elements are necessary for any alterations to a contract to be enforceable. ( what does enforcable mean )

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14
Q

what is agreement normally shown by

A

finding an offer and the acceptance of that offer

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15
Q

sometimes agreement shown by finding and accepting an offer is not always necessary t/f

A

t

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16
Q

in terms of agreement and invitation to treat what is a historical course of dealing

A

Sometimes, agreement isn’t clear-cut with an offer and acceptance. When actions have been ongoing for a long time, it’s likely that people involved agree.

This is called “historical course of dealing.”

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17
Q

offer v invitation to treat

A

An invitation to treat is the start of talking about a deal, not a firm offer. You can’t accept an invitation to treat; you respond by making an offer, which the person can accept or refuse.

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18
Q

what are the 4 examples for agreement

A

Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953)

Fisher v Bell (1960)

Partridge v Crittenden (1968)

Carlill v Carbolic Smoke Ball Co (1892).

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19
Q

pharamceutical society of great britian v boots cash chemists (1953)

A

Legal Situation: The law required a pharmacist’s supervision to sell certain medicines.

Store Operation: Boots operated a self-service shop where customers selected items and paid at the till, supervised by a pharmacist.

Legal Question: The court needed to decide when the actual sale happened: on the shelf or at the till.
Boots’ Argument: Placing items on shelves was an invitation to treat, not a direct sale.

Court Decision: Courts agreed with Boots, stating that items on shop shelves are invitations to treat, and the actual sale occurs at the till, supervised by a pharmacist.

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20
Q

Fisher v Bell (1960) - Shop Display as an Invitation to Treat

A

Legal Scenario: Mr. Bell, a shop owner, had a knife in his shop window with a price tag.

Legal Issue: The court had to decide if putting something in the shop window was offering it for sale.

Shopkeeper’s Rights: A shopkeeper can refuse to sell to anyone they want, for various reasons (like safety concerns or payment issues).

Invitation to Treat: Placing goods in the window doesn’t mean they’re directly for sale. It’s more like inviting people to ask about buying them.

Legal Conclusion: Displaying goods in a shop or window is seen as an invitation for customers to start talking about buying, not an outright offer for sale.

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21
Q

Partridge v Crittenden (1968) - Advertisement as an Invitation to Treat
Back side:

A

Case Scenario: Mr. Partridge placed an ad in a magazine for protected wild birds, which was against the law.

Legal Issue: The court needed to decide if placing the ad was an offer to sell or an invitation to treat.
Similarity to Fisher v Bell: Similar to Fisher v Bell, the court decided that the advertisement was not an offer but an invitation to treat.

Limited Supply: Mr. Partridge couldn’t supply all birds if everyone wanted them, indicating it wasn’t a firm offer for sale.

Conclusion: The ad was seen as an invitation for people to ask about buying, not a direct offer for sale due to limited supply and ability to refuse specific requests.

basically he was saying he wasnt breaing the law the people buying it were

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22
Q

Carlill v Carbolic Smoke Ball Co (1892) - Advertisement as an Offer

A

Case Scenario: The Smoke Ball Company advertised a flu prevention device, promising £100 to users who got influenza after using it as directed.

Legal Claim: Mrs. Carlill used the product as instructed, caught influenza, and claimed the £100 promised in the ad.
Company’s Refusal: The company denied the payment, arguing the ad wasn’t a valid offer.

Legal Decision: The court ruled that if an advertisement is clear and specific, it can be seen as an offer. In this case, the ad was precise enough to be considered an offer.

Outcome: Mrs. Carlill succeeded because the ad was viewed as a clear offer, leaving no room for the company to refuse payment.

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23
Q

summary of agreement statistics

A

Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953): Shop displays are invitations to treat, not offers for sale, ensuring legality in medicine sales.

Fisher v Bell (1960): Goods in shop windows are invitations to treat, not direct offers, safeguarding against selling restricted items.

Partridge v Crittenden (1968): Advertisements for limited items like protected birds are invitations to treat due to limited supply, not firm offers.

Carlill v Carbolic Smoke Ball Co (1892): A specific and clear advertisement can constitute a valid offer, leading to binding contractual obligations upon performance.

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24
Q

Bilateral vs. Unilateral Contracts

A

Bilateral Contract: Both parties must fulfill their promises in the contract.

Unilateral Contract: Only one party is obligated to perform.

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25
Q

Unilateral contract examples

A

Carlill v Carbolic Smoke Ball Co (1892): Using the smoke ball as directed and catching influenza constituted acceptance of the offer for reward payment.

Lost Pet Notice Example: Offering a reward for a lost pet creates a unilateral contract; finder’s return triggers the reward obligation.

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26
Q

Unilateral contract - no obligation example

A

Random Act of Kindness: Returning a lost dog without knowing about the reward doesn’t bind the owner to pay, as it wasn’t prompted by the offer.

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27
Q

explanatino of why the smokebomb is unilateral

A

offer was structured as a unilateral contract, because it required the performance of an act (using the smoke ball as directed) as the acceptance of the offer.

In a unilateral contract, only one party is obliged to perform. Here, Mrs. Carlill, by using the smoke ball according to the instructions and catching influenza, fulfilled the required act of acceptance outlined in the advertisement.

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28
Q

critical distinction between unilateral and bilateral contracts

A

how the acceptance is made: in a unilateral contract, acceptance is through performance of a specified act;

in a bilateral contract, acceptance usually happens through a promise or mutual agreement between parties.

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29
Q

auctions

A
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30
Q

auctions are both offers and invitations to treatr t/f

A

t

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31
Q

what is a lot

A

specific item or items being sold as a single un

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32
Q

a lot is a

A

invitation to trear

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33
Q

when someon places a bid that is

A

an offer

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34
Q

bid is accepted and seen as acceptance when

A

auctioneer bangs his favel

35
Q

what does payne v cave shoe

A

ssomenoe making an offer can withdrw it any time before it is accepted

36
Q

generally a notice that someone will consider tenders is an

A

invitation tot reat

37
Q

putting in a tender is an offer saying that

A

you’ll carry out the job for the price you quoted

if the tender is accepted the accceptance has been made

38
Q

if epople say they ill condier all tedners placed by a deadline thety

A

must

39
Q

what cases are used for onsidering tenders placed by a deadline

A

blackpool and fylde aero club v blackpool borough council

40
Q

a statement of price is not an xxx and cannot be xx

A

offer

accepted

41
Q

a statemnt of price is not an offer and cannot be accepted - which example is this

A

harvey v facey 1893

42
Q

explain harvey v facey 1893

A

Scenario: Harvey asked Facey about buying Bumpers Hall Pen.
Response: Facey replied with a price (£900) in a telegram.
Legal Decision: Court ruled Facey’s price reply was not an offer to sell.
Outcome: Facey’s response was viewed as information, not a definite offer.

Nature: Facey’s price statement was not considered an offer.
Explanation: It was seen as an answer to a query, not an offer to sell.
Legal Concept: The price stated was more like an indication, similar to an invitation to treat.

43
Q

another example of price stamtenet is not an offer

A

gibson v mancheter council

44
Q

explain gibson v manchester council

A

Scenario: Mr. Gibson wanted to buy his council house.

Council’s Action: Council wrote about selling at a set price, asked for applications.

Change in Policy: New councillors stopped the selling scheme.

Legal Decision: Court viewed council’s letter as an invitation to treat.

Offer: Mr. Gibson’s application was seen as the offer to buy.

Outcome: As the offer wasn’t accepted, there was no agreement.

Council’s Letter
Back:

Nature: Council’s letter was an invitation to treat.

Purpose: It invited tenants to express interest in buying their houses
.
Effect: Not a definite offer; merely a step to start the process.

45
Q

silence cannot be ….

A

acceptance

46
Q

whats a case that shows silence cannot be acceptance

A

felthouse v bindley

47
Q

what happened in the felthouse v bindley case

A

Situation: Uncle offered to buy nephew’s horse.
Uncle’s Letter: Stated a deadline for response; silence meant agreement.
Mistake at Auction: Nephew’s horse sold at auction mistakenly.
Legal Decision: Court ruled silence didn’t constitute acceptance.
Outcome: Horse remained nephew’s property when sold.

48
Q

rejection

A
49
Q

if an offer is rejected it cannot

A

be accepted later

50
Q

if an ofer is rejeced it cannot be accepted later which case shows this

A

hyde v wrench

51
Q

what does conditions on acceptance mean in terms of offers beign rejected

A

acceptance must match the offer
changes arent valid acceptances

52
Q

what was the hyde v wrench case in terms of rejection

A

“Offer to sell land rejected, counteroffer declined. Attempted re-acceptance failed.”

53
Q

what is acceptance exactness

A

for a valid aceptance it must match the original offer precisley

54
Q

gennerally speking hwo must acceptance be communicated

A

to teh person making the offer

agreement hasnt happened till then

55
Q

what case shows acceptance by post rule

A

adam v lindsell

56
Q

what happened in adam v linsell

A

Offer accepted by post, delayed arrival led to dispute led to dispute as thing was sold to someone else

57
Q

due to adam and linsell what is the postal rule

A

Acceptance is valid upon posting the letter, even if not yet received

58
Q

what are the exceptions to the postal rule

A

Doesn’t apply to telexes, faxes, or phone communications - acceptance upon receipt.”

59
Q

what are teh 6 ways an offer can end

A
  1. Accepted, 2. Refused, 3. Withdrawn, 4. Lapse of time, 5. Failure of precondition, 6. Death of offeror.”
60
Q

what is withdrawal of offer

A

Offer withdrawal must be communicated to the person it was made to

61
Q

what si lapse of tiem

A

“Offer ends if a specific time limit expires or if a reasonable time passes.

62
Q

what is failure of precondiiton

A

“Offer ends if a condition like ‘marrying someone’ is not fulfilled

63
Q

what is death of offeror

A

“Offer ends upon offeror’s death, except for personal actions.

64
Q

.

A
65
Q

CONSIDERATION

A

Defined in Currie v Misa as ‘something of value given, suffered, or undertaken by parties in a contract.

66
Q

Essential of consideration

A

For a contract to be valid, both parties must exchange something valuable, need not be to each other, but due to the contract

67
Q

executed consideration

A

done or given

68
Q

executory consideration

A

romised for the future. Both parties promise future actions until completed.”

69
Q

consideration in contract completion

A

Once both parties fulfill promises, consideration becomes executed, and the contract is fulfilled.”

70
Q

act of forebearance in consideration

A

“act of forbearance” as refraining from exercising a legal right that someone has. For instance, let’s say you have the legal right to demand payment for a loan immediately, but instead, you choose not to demand payment right away

giving up or refraining from exercising a legal right, which can have value in a contract. For instance, if someone promises not to sell their car to anyone else for a month while you decide whether to buy it, that promise not to sell (forbearance) has value

71
Q

consideration cyanot br

A

past

72
Q

whcihc case show consideration cant be oast

A

mcardle

73
Q

beriefly summarise the mcardle case

A

It’s not enough to promise something for what has already happened. In this case, a family promised to pay for a bathroom, but the payment had already been made before the promise.
Example: If you promise something after it’s already done, it might not count as a promise in a contract.

74
Q

past consideration more info

A

For a contract, what you promise to do must be because of the agreement. Past events might not count as consideration.
Example: Promising something for what’s already happened might not count as a promise in a contract.

75
Q

when is past consideration different or acceptable

A

in business contracts when promised payment for work not yet done.

76
Q

past considertayion valid for business case

A

Casey’s Patents (1891) - Mr. Casey did work on patents and was promised a share. Different from Re: McArdle, as in business, it’s fair to expect payment for work done; he was successful in claiming his share.

77
Q

consideration must be efficient not adequate meanin

A

you cn pay £1 for consideration at it can still be possible

78
Q

case study for consideration efficent but not adequate

Chappell held music copyrights; Nestle sold music discs for chocolate wrappers; Chappell sought money for songs used in the promotion.

A

Chappell’s songs used in Nestle promotion; Nestle offered discs for wrappers.
Argument: Nestle claimed wrappers weren’t real payment; it was a giveaway.
Decision: Court ruled wrappers were valid payment; Nestle asked for them as part of the deal, so it counted as fair payment for the songs.

79
Q

just doing what you have to do anyway doesnt mean

A

consideration

80
Q

just doing what you have to do does not mean consideration but what would be

A

doing what you have to do and more

81
Q

explain case of of doing what you have to do not being considered consideration (glasbrook bros v glaorgan county council

A

Content: Police billed mine for protection during strike; Mine refused payment.

Back of Flashcard:
Issue: Mine didn’t want to pay police bill.
Ruling: Police can bill for extra services, not basic public duty; Mine must pay for additional security beyond regular duty.

82
Q

consideration is not valif when youre doing sometyhing under an agreed contract whats the case exmaple - stilck v myrickk

A

In this case, several seamen had agreed to crew a ship on a voyage and back home again for a particular price. Once the ship had reached its destination, several crewmen deserted. In order to ensure that the remaining crewmen stayed, the captain promised to divide the deserting crewmen’s wages between the rest if they would work the passage home. They agreed to do this but when they returned, the captain did not want to pay them any more money. The case went to court and the court agreed with the captain. The crewmen had done nothing more than they had agreed to do in the first place so they had given no consideration to a change in the contract that would give them an increase in wages. They were not entitled to any more money.

83
Q

Williams v Roffey Bros & Nicholls

A

Back side:
- Roffey hired Williams for carpentry in a big project.
- Williams halfway through said, “Pay more or find someone else.”
- Roffey agreed for fear of contract penalties if they went over time.
- Later, Roffey refused to pay more, claiming no consideration.
- Court said Williams staying saved Roffey time and money.
- Williams’ help was a practical benefit and counted as consideration.
- Roffey had to pay Williams the extra money for helping out.

a practical benefit or preventing a disadvantage to one party could be considered as valid consideration.

84
Q
A

Year 1 - Business Law (17 decks)

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