Formation Of A Contract Flashcards
What’s a contract
A legally binding agreement between two parties where consideration is given and offer and acceptance takes place. There must be intention to create legal relations
The offer
Must be genuine
Suggestion or proposition from one party to another. (Courts will only recognise an offer as being valid if it was intended as an offer)
-can be implied or express
Fisher v bell
Items on a shop shelf are an invitation to treat
Partridge v crittenden
Adverts are an invitation to treat
Harvey v facey
Reply to a request for information is not an offer
Unilateral offer
- one sided offer
- promise to give someone something if they complete an act
- no obligations
Carlil v carbolic smoke ball
Unilateral offer example case
Bilateral offer
- both parties make a promise to each other
- a mutual agreement
- if one side doesn’t complete their part other party doesn’t have to either
Thornton v shoe lane parking
Offer can be made by a machine
How can an offer end
Acceptance
Revocation
Rejection
Lapse of time
Death by person who made the offer
Routladge v grant
Even if an offer was said to be open for a period of time it can still be revoked if it wasn’t accepted
Dickinson v Dodds
Revocation can be communicated by a third party. Can also be conduct
Hyde v wrench
Counter offer amounts to a rejection of the original offer
Ramsgate Victoria hotel
Long delays between offer and acceptance can amount to time lapse.
Acceptance
The offered must accept the exact terms proposed by the offer or unconditionally, also known as the mirror image rule.
The postal rule
- acceptance is complete immediately after the letter has been posted
- usual method of communication must be postal
- letter has been properly addressed and stamped
- proof of postage is required
Thomas v solicitors
Emails: acceptance is when received by offerer not when sent
Felthouse v bindley
Silence cannot be considered as acceptance
Holwell securities v Hughes’s
Acceptance must be in method stipulated. In this case it was written
Intent to create legal relations
- commercial contracts
- social and domestic contracts
Jones’s v vernon pools
Binding in honour only, not legally binding
- gentleman’s agreement
Balfour v Balfour
Agreement was made before the divorce and it was seen as a social agreement and not legally binding
Merritt v Merritt
Agreement made after the divorce, it was legally binding
Simpkins v pays
3 people payed 1 person to enter a competition, judge said it was more than a social agreement so they had to split the winnings
Wilson v Burnett
3 ladies played bingo together they always split the winnings. One of them won a really big sum and the other two kept asking if she was gonna split the money. Judge said because they kept asking it was not a legally binding agreement in the first place
Parker v Clarke
Couple made a large financial decision over a promise of another, because of how big of a decision they made relying on the promise it was seen as legally binding
Types of consideration
Executed and executory
Executed consideration
Consideration has been carried out
Executory consideration
A promise to perform acts in the future
Thomas v thomas
Consideration needs not be adequate but must be sufficient
Chappel v nestle
A chocolate wrapper seen as enough consideration
White v bluett
Sufficient consideration can’t be a promise not to do something
Re mcardle
Past consideration is not good consideration
Exception to past consideration
If there was an expectation at the time the act was carried out
Stilk v myrick
Performing an existing duty is not seen as good consideration for a new contract
Hartley v ponsonby
Performing an existing duty cannot be good consideration for a new contract
Williams v roffey bros
If claimant is avoiding a detriment it could be good consideration
Foakes v beer
Part payment of a debt is not good consideration
High trees case
Cannot go back on promise if that promise had been relied on
Introduced: promissory estoppel
