Formation of contract Flashcards
What is a contract
An agreement between 2 parties which is binding in law and therefore enforceable in court
What is breach of contract
When a party fails to carry out any of their obligations under the agreement; or in carrying it out they fail to do what they are supposed to do
Offer
An offer is defined as a proposal to enter into a contract which shows an intention to enter into legal relations. Offers must be communicated to the offeree to be valid. - Taylor v Laird
Invitation to treat
More like a negotiation where one party is inviting another to make on offer. Can be seen where goods are displayed in shop windows - Fisher v Bell or where goods or services are advertised in the media - Partridge v Crittenden
Acceptance
Acceptance is when one party agrees to the terms of an offer made by another party. Acceptance must be communicated to the offerer and silence wont amount to acceptance - Felthouse v Bindley
Felthouse v Bindley
Acceptance must be communicated
Taylor v Laird
Communication of offers
T was unable to claim since he had not communicated his offer therefore no contract
Fisher v bell
Goods in shop windows are not an offer but an invitation to treat
Counter offer
Ends the original offer and starts a new offer so the counter offer can be accepted or rejected by the person making the original offer. Supersedes the original offer so original offer is no longer valid. - Hyde v Wrench
Hyde v Wrench
A counteroffer destroys the original offer, which cannot be subsequently accepted
Partridge v Crittenden
Advertisement was an ITT and so no offer had been made
Unilateral offer
A unilateral offer is a type of contract where one party (the offeror) makes a promise in exchange for a specified act by another party (the offeree) In this case, the offeree accepts the offer by performing the requested act, rather than by making a reciprocal promise and can be made to anyone by any method - Carlill v Carbolic smokeball
Carlill v Carbolic smoke ball
A unilateral offer can be accepted by performance, and clear intention to be bound can make an advertisement an offer
Request for further info
An inquiry made in response to an offer is not a counter offer and doesn’t supersede the original offer so original offer can still be accepted - Stevenson v Mclean
Stevenson v Mclean
A mere inquiry does not constitute a counteroffer or rejection
Postal rule
If the use of post is a reasonable method of acceptance then the acceptance is effective when posted (Adams v Lindsell), unless there is a notice in writing in the offer to exclude the postal rule - Howell security v Hughes
For modern methods of communication acceptance is on arrival rather then when sent - Entores v Miles Far East
Adams v Lindsell
Acceptance is valid when posted (postal rule), provided it is properly addressed and stamped
Howell security v Hughes
Postal rule does not automatically apply in every situation - excluded by giving notice in writing
Entores v Miles Far East
Acceptance via instantaneous communication is effective when received
