Formation of a contract Flashcards
What is a bilateral contract?
A contract for a promise in exchange for a promise
What is a unilateral contract
One party makes a promise for reward.
What is an offer?
Willingness to treat on certain terms (Binding as soon as accepted).
What is acceptance?
Is an ‘expression of assent’ which is ‘unqualified’.
Under the postal rule in what circumstances is the letter effective when posted even if lost?
1) It was reasonable to post
2) Letter was properly addressed
3) Postal rule has not been excluded by offeror.
What is revocation and when can it be done?
Withdrawal from a contract. It can be done anytime before acceptance (no postal rule)
What are the two elements to certainty?
vagueness and incompleteness
What can be used to resolve uncertainty?
Customs, trade and previous dealings. Use objective standard such as market practices and factual background (Matrix of facts).
What is the general rule under incompleteness?
Law strives to uphold contracts unless it is unworkable without a term.
Under incompleteness when will terms be implied by customs?
If it is notorious, certain, reasonable and regarded as binding.
In what situation is intention to create legal relations presumed?
In commercial dealings there is a strong presumption, under domestic dealings no presumption.
What are considerations?
Value given for promise. Can be a promise (executory consideration or an act (Executed consideration). Must be sufficient but not adequate.
What is the rule with past considerations?
In general they are not good considerations unless:
- past act was done at promisee request
- mutual understanding of compensation
intention to create legal relations
What does contract variation require ?
Agreement, considerations and intention to create legal relations.
What is an agent?
Someone with power to change legal relationship of another.
