Formation of a contract

Question 1

Offer is…

Answer 1

Clear and unambiguous undertaking to be bound by specific terms, which becomes binning upon acceptance

Question 2

An Offer may be made to… (3)

Answer 2

A Person

A group of persons

All the world

Question 3

Responses to an offer can be… (4)

Answer 3

Accept and offer an all of its terms - accepting

Reject the offer - Not accept

Ask for further information - not accepting

make a counter offer - not accepting

Question 4

A counter offer amounts to…

Answer 4

The rejection of the original offer and the substitution of a new offer

Question 5

Termination of offer happens when(5)

Answer 5

• Revoke offer, if it has not been accepted
• Rejection
• Lapse of time
• Death of a party
• Supervening incapacity (offer cannot be performed)

Question 6

Acceptance must be an…

Answer 6

Unconditional, unqualified and final acceptance of all the terms of the offer made in the manner specified by the offeror and communicated to the offerer.

Question 7

Acceptance can be… (3)

Answer 7

Written

oral

implied

Question 8

Only the person the offer is made to can…

Answer 8

Accept unless there is a multiple offer

Question 9

Manner of acceptance (3)

Answer 9

The acceptance must come to the notice of the offer before the offer expires

The manner of acceptance may be specified in the offer

mere silence will not constitute acceptance

Question 10

Postal rule (4)

Answer 10

• Acceptance is effective where written acceptance by post or telegram in contemplated
• it becomes effective on posting (not on receipt)
• only applies to letters and telegrams
• does not apply if the letter is wrongly addressed

Question 11

Ostensible authority (2)

Answer 11

• Either express of implied by conduct; or
• By appointing a person to a position that would normally include the authority to enter into an agreement

Question 12

Intention to be bound

Answer 12

An Agreement is not forceable unless the parties intended that it be bound

Question 13

Presumptions for intention to be bound (2)

Answer 13

1. Parties to business and commercial agreements intended to be legally bound
2. Parties to a social or domestic agreement do not intend to be legally bound
   - may be rebutted
   - onus is on party seeking to rebut presumption

Question 14

Consideration

Answer 14

The price paid by the promisee for the promise by the promiser.

Question 15

Executory consideration

Answer 15

A promise to do something (or refrain from) in the future.

Question 16

Executed consideration

Answer 16

Something given or done at the moment the contract comes into existence

Question 17

Types of consideration (3)

Answer 17

1. A benefit to the promiser
2. a detriment to the promisee
3. a forbearance

Question 18

Sufficiency of consideration (Not Considered consideration)

Answer 18

• Imposed by law (Make someone pay you)
• Duty to the other parties
• part payment of debt

Question 19

Past consideration is…

Answer 19

not good consideration