Formation

Question 1

Formalities of consumer credit contracts

Answer 1

Must be made in writing

Question 2

Parol Evidence Rule

Answer 2

External evidence cannot add to or vary a contract that has been reduced to writing, that is, there is a strong presumption that the written contract forms the entire agreement between the parties and contains all the terms.

NB - It is possible for terms other than written terms to form part of a written contract, but only if the parties so intended.

Question 3

In what circumstances is revocation effectively communicated by third party?

Answer 3

1. Can be communicated by a reliable third party

Question 4

What happens when the offeror agrees to keep the offer open to the offeree?

Answer 4

Offeror can REVOKE the offer at ANY TIME.

IF there is consideration for keeping offer open - parties may have entered into a collatoral contract which offeree could claim damages under if breached.

HOWEVER - simple agreement to keep the offer open is not binding on the offeror.

Question 5

When is a contract void for illegality at formation?

Answer 5

Any contract that contemplates a criminal act will be illegal and automatically void. As murder is a criminal offence, this would apply in this scenario.

Cf - Illegality in performance where contract is illegal at the outset

Question 6

When does an offer lapse?

Answer 6

Unless a time for acceptance is specified, an offer will lapse after a reasonable time.

What is ‘reasonable’ will depend on the nature of the subject matter, for example, an offer to purchase perishable goods, will lapse more quickly.