Formation- agreement, offer and acceptance

Question 1

What Latin term determines whether a contract has been concluded?

Answer 1

Consensus in idem- the meeting of the minds

This is viewed objectively.

Question 2

When might concluded agreements not be enforceable?

Answer 2

• when the agreement is void
• when one or more of the parties has no serious intention to enter into a legally binding relationship
• when only the agreement to agree has taken place
• vague, general understandings cannot be enforced
• where parties have set conditions to be met before agreement becomes enforceable (so they have not been met yet).

Question 3

When do contracts become enforceable?

Answer 3

Upon conclusion.

Question 4

What must occur for a contract to be legitimate?

Answer 4

Parties must have reach point of engagement- agreement on the same thing (known as CONSENSUS IN IDEM).

Question 5

True or false- parties are free to suspend obligations.

Answer 5

True, they can during contract formats toon e.g. by setting conditions.

Question 6

What is the name given to the party making the offer?

Answer 6

The offeror.

Question 7

What is the name given to the party to whom the offer is being made?

Answer 7

The offeree.

Question 8

What is unqualified acceptance?

Answer 8

Unqualified acceptance is the acceptance of an offer without changes being made to the terms of the contract. It automatically converts the offer into a contract.

Question 9

What is the effect of a counter offer (or qualified acceptance) on the original offer?

Answer 9

The counter offer extinguishes the original offer.

Question 10

True or false- goods for sale in shop window or on the ship’s website are invitations to treat.

Answer 10

True- see Fisher v Bell 1961

and Chwee Kin Keong v Digilandmall.com Pte Ltd 2004

Question 11

True or false- adverts are almost always invitations to treat.

Answer 11

True- see Partridge v Crittenden 1968 and Carlill v Carbolic Smokeball Co 1893

Question 12

Why must the offer be sufficiently definite?

Answer 12

So that upon acceptance essential terms are clear.

Question 13

Can offers be revoked after acceptance?

Answer 13

Offers may not be revoked after acceptance but can be any time before it has been accepted, except where offeror has stipulated time during which the offer is to remain open for acceptance.

Question 14

What happens if there is no stipulation of time by the offeror during which the offer can be accepted?

Answer 14

The offer will lapse following a reasonable amount of time.

Question 15

Offers lapse after the passage of a reasonable amount of time. When else might they lapse?

Answer 15

Up one death, bankruptcy or incapacity of the offeror.

Question 16

Must acceptance be express?

Answer 16

Acceptance can be express but does not necessarily have to be. It can be implied by action in conformity with the terms of the offer.

Question 17

True or false- the offeror may stipulate the mode of acceptance the offeree must take.

Answer 17

True, however they cannot stipulate this be done by mode of silence.

Question 18

True or false- acceptance is effective upon receipt.

Answer 18

True.

Question 19

Acceptance is effective upon receipt. Are there any exceptions to this?

Answer 19

Where offer and acceptance is conducted by post, where acceptance is effective on posting.

Question 20

What must happen for revocation of an offer to occur?

Answer 20

The revocation of the offer must be received.

Question 21

What happens when acceptance and revocation of an offer cross in the post?

Answer 21

THE POSTAL RULE APPLIES. contract has been concluded because acceptance Is defective on posting however revocation is only effective when received.

Question 22

True or false- social agreements are contracts.

Answer 22

False- social agreements are NOT contracts.

Question 23

True or false- commercial agreements are contracts.

Answer 23

True- commercial agreements ARE contracts.

Question 24

What is an example of an enforceable social agreement?

Answer 24

Pre-nuptial agreements as per the Family (Scotland) Act 1985:
Where parties to a marriage or civil partnership have agreed for a financial provision to be made on divorce or dissolution of the partnership, the court may set aside or amend terms relating to a periodical allowance or the agreement of any term they consider to have not been reasonable and fair at the time it was entered into.

Question 25

What is a LETTER OF COMFORT?

Answer 25

answer

Question 26

What is a LETTER OF INTENT?

Answer 26

Answer

Question 27

What does the term ‘binding in honour only’ mean?

Answer 27

The party will be honourable in their dealings and fair in paying winnings but cannot be held accountable should they, for example, make a mistake.

Question 28

Are agreements to agree enforceable?

Answer 28

Agreements to agree are unenforceable- for there to be a good contract there must be a concluded bargain that settles everything that needs to be settled between the two parties.