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Contract Law > Formation > Flashcards

Formation Flashcards

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1
Q

What is a contract?

A

A legally binding agreement between type of more people, it has four elements; offer, acceptance, consideration and intention

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2
Q

What are the two types of contract?

A

Unilateral and Bilateral

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3
Q

What is a unilateral contract?

A

Only one party has an obligation, the contract can be made to the whole world (e.g lost cat poster)

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4
Q

What is a bilateral contract?

A

Both parties have an obligation to fulfil, most common type of contract

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5
Q

What is an offer?

A

A set of terms in which you intend to be bound by, must be willing

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6
Q

What must an offer be? name the key case

A

Must be certain and fully communicated (Gibson v MCC)

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7
Q

What is the rule on information in an offer?

A

A request for information and a reply is not an offer (Harvey v Facey)

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8
Q

What is an ITT? name the three types

A

a willingness to begin negotiations;
-Advert
-Auctions
-Something on display

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9
Q

What is the rule on something on display in a shop? name the key case (ITT)

A

Fisher v Bell - held it is not an offer, instead the customer makes and offer which the shopkeeper can accept/reject

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10
Q

What is the rule on auctions? name the key case (ITT)

A

BCA v Wright - held the bidders make offers which the auctioneer can accept/reject

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11
Q

What is the rule on adverts? name the key case (ITT)

A

Partridge v Crittenden - held not an offer unless it is made to a specific group of people, or if it is a unilateral contract (Carlill v Carbolic Smokeball)

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12
Q

What are the six ways an offer can come to an end? name the key cases

A

-Revocation (Dickinson v Dodds)
-Rejection (Stevenson v McClean)
-Counter offer (Hyde v Wrench)
-Lapse of time (Ramsgate Victoria Hotel)
-Acceptance
-Death

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13
Q

What is the rule on revocation of an offer? name the key case

A

offer can be withdrawn at any time before it has been accepted, but this must be communicated to the oferee, can also be revoked by a reliable third party (Dickinson v Dodds)

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14
Q

What is the rule on rejection of an offer? name the key case

A

must be clear and not a request for more information - if the offeree attempts to make an offer after rejection they are making a new offer (Stevenson v McClean)

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15
Q

What is the rule on counter offers? name the key case

A

It ends the original offer and creates a new one, any counter must be communicated to be effective (Hyde v Wrench)

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16
Q

What is the rule on lapse of time of an offer? name the key case

A

Must be a reasonable amount of time if no limit is specified (Ramsgate Victoria Hotel)

17
Q

What is the rule on death for an offer?

A

If the offeror dies, acceptance can still take place until they learn of the death - if an offeree dies then it automatically ends

18
Q

What is the second element of a contract?

A

Acceptance - an agreement to all the terms of the offer and becomes valid as soon as it is communicated through a positive act

19
Q

What rule did Felthouse v Bindley set on acceptance?

A

Can be in any form except silence, and Carlill v Carbolic Smokeball held a unilateral contract are accepted by positive conduct

20
Q

What was held in the postal rule? name the key case (acceptance)

A

Adams v Lindsell - will take effect as soon as it has been posted; must be expected method of communication, stamped and correctly addressed, with proof of postage

21
Q

What was held with the electronic rule? name the key case (acceptance)

A

Entores v Miles Far East - takes effect when received, phone is instant but must be heard, out of hours communication will take place the next day

22
Q

What is the third element of a contract?

A

Consideration - the price for which the promise has been bought, the ‘value’ in the contract, what both parties agree to give (benefit and detriment of both)

23
Q

What are the two types of consideration?

A

Executory - a promise to the future
Executed - already carried out

24
Q

What are the key rules on consideration?

A

It must be sufficient/real, so that it has value (White v Bluett), however it does not need to be adequate (good deal) (Chappell v Nestle)

25
Q

What are the four side rules under consideration?

A

-Performance of an existing duty
-Past consideration
-Part payment of a debt
-Privity of a contract

26
Q

What was held in performance of an existing duty?

A

Not valid consideration as they were performing the exact same job (Stilk v Myrick)

27
Q

What are the two exceptions to performance of an existing contract duty?

A

Extra - good consideration (Hartley v Ponsonby)
Extra Benefit/Avoids Detriment - good consideration (Williams v Roffey)

28
Q

What is the rule on past consideration?

A

Not good consideration as something was already done before the agreement was made (Re McArdle)

29
Q

What is the exception of past consideration?

A

Good consideration if there was an implied promise to pay at the time (Lampleigh v Braithwaite)

30
Q

What is the rule on part payment of a debt?

A

The full amount can still be requested, not good consideration (Pinnels case)

31
Q

What is the exception of part payment of a debt?

A

Accepting something other than money for the debt/repaying the debt at an earlier date or place/promissory estoppel

32
Q

What is the rule on privity of a contract?

A

Only those who give consideration have rights under the contract (Tweddle v Atkinson)

33
Q

What is the exception for privity of a contract?

A

Contracts (Rights of Third Parties) Act 1999 - a person who is not a party in the contract can still enforce the contract if he is named in it or if he gains benefit from it

34
Q

What is the fourth element of a contract?

A

Intention to create legal relations

35
Q

What are the two types in ITCLR? (formation)

A

Business Agreements - parties intend to be legally bound unless proven otherwise
Social Agreements - parties dont intend to be legally bound unless proven otherwise

36
Q

What is the case for rebuttal (proven otherwise) for business agreements in ITCLR?

A

Jones v Vernon’s Pools - clause prevented legal relationship, binding in honour only

37
Q

What are the cases for rebuttal (proven otherwise) for social agreements in ITCLR?

A

Balfour v Balfour - agreement between couple not legally binding
Merritt v Merritt - broken up couple agreeing over splitting assets, held legally binding

38
Q

What are the two side rules in ITCLR?

A

Money changing hands - more likely to be legally binding (Simpkins v Pays)
Putting financial security at risk - more likely (Parker v Clarke)

Contract Law (4 decks)

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