Formation of contract Flashcards
What are the exceptions to contracts that contracts do not need to be in writing?
- A guarantee
- Contract for sale of land
- Consumer credit transactions
All these need to be in writing
What is an offer?
Express an intent to be bound
Terms must be definite and certain
What are invitations to treat?
Words or conduct that invite another party to make an offer.
Eg. Adverts, goods in a shop window or on shelves, price lists (generally)
NB. if an advert promises something if the reader does something = unilateral contract offer
Can revocation be received from a source other than the Offeror?
Yes. An offer can be revoked if he offeree receives correct information from a reliable source of acts by the offeror that would indicate the offer is revoked
(eg the offeree recieved reliable info that the offeror sold the car to someone else)
When can an offer not be revoked?
If a collateral contract was made to keep the offer open (promise to keep offer open for consideration)
Unilateral contract = offeree has begun performance
The offer was bilateral contract and the offeree accepted by beginning performance
What is the postal rule and what are its exceptions?
Postal rule = acceptance by post creates a contract at the moment of posting.
Exceptions:
- the letter is not properly addressed or stamped
- it wasnt reasonable to accept by post
- the offer states that acceptance isn’t valid until received
NB. postal rule does not apply to email
What is consideration?
Act of forbearance from acting or a promise to act or fobear.
Eg. payment of money, promise to pay money, performance fo a service, promise to perform a service, refraining from doing something, promising to refrain from doing something.
Consideration must be sufficient (some value) but need not be adequate.
When can a promise to fulfill an existing duty be valid consideration?
Generall, a promise to perform a duty already owed is not valid consideration.
If anything else is offered (eg finishing earlier than promised, setting a completion date when there wasn’t one), there is valid consideration.
If the duty already owed is to a third party, then a promise to perform the same duty to someone else is valid consideration
When is past consideration valid consideration?
Act already performed (past cosideration) usually aren’t valid.
Exception = if the act was requested by the promisor and it was understood that payment would be made
When is a promise to accept part payment of a debt valid consideration?
Generally, a promise to accept part of a debt is not enforceable.
Exceptions:
1) The debt was disputed in good faith
2) The claim was unliquidated (uncertain)
3) Payment is at a different place or time, or by different means (instead of £500, you give a bracelet worth £400)
4) Agreement from a composition of creditors (insolvency)
What is promissory estoppel?
It can be a substitute for consideration, and can apply when:
There is a promise not to rely on existing legal rights, the promisee has detrimentally relied on this promise by altering their posiiton, and it would be inequitable for the promisor to go back on their promise.
Eg. a landlord promises to reduce a tenant’s rent during Covid and the tenant uses the money saved to purchase food and clothing.
