Formation of Contract Flashcards
For something to be an offer it contains sufficient key terms and no further negotiation is needed
Gibson v Manchester City Council 1979
In distinguishing between an offer and ITT, must consider what the party intended the statement to be using an objective test
Harvey v Facey 1893
C asked D to telegraph the lowest price for property. D said £900, C replied and said he accepted offer - but not an offer - no intention to be bound.
Offer vs Invitation to Treat:
Advertisement - ITT , Offer (unilateral and intention to be bound)
Display of Goods - TT
Auctions - ITT and Offer
No reserve price.
Tenders - ITT and Offer
Partridge v Crittenden - ITT
Carlill v Carbolic Smoke Ball - Offer
Pharmaceutical Society of GB v Boots Cash Chemists
British Car Auction Ltd v Wright - calling for bids = ITT, Each bid = Offer to be accepted by auctioneer.
Harris v Nickerson - no reserve price–> unilateral offer accepted by highest bidder
Spencer v Harding- call for tenders = ITT, submission of tenders = offer (clear terms and an intention)
Blackpool and Flyde Aero Club v Blackpool Borough Council - call for tenders = unilateral offer that all tenders would be considered.
The Mirror Image Rule - counter offers kills original offer
Hyde v Wrench
Distinguish between a counteroffer and a request for more info
Jacques & Co v McLean
Identical cross offers do not constitute a binding contract (offeree must be aware of the offer)
Tinn v Hoffman
Offeree doesn’t need to know the offer (unilateral contracts) - but here offeree became aware of the offer before info reached the offeror
Gibbons v Proctor
Contact formed upon receipt of acceptance by the offeror (instantaneous communication)
Brinkibon Ltd v Stahag Stahl
Not necessary for acceptance to have been read by offeror
The Brimnes (Note this is a case on termination but still relevant)
Exceptions to communication rule (unilateral offers) - performance of act constitutes acceptance.
Carlill v Carbolic Smoke Ball
Postal Rule
Adams v Lindsell
Postal rule only applies to letters not instantaneous communications which is effective upon receipt (important for which jurisdiction contract was made in)
Entores v Miles Far East Corporation
If acceptance by post is unreasonable, postal rule is not applied
Henthorn v Fraser (posting was reasonable here)
Methods of Acceptance:
Conduct
Prescribed method of acceptance- this must be clear and explicit otherwise an equally valid method of acceptance will be enough.
Silence does not constitute acceptance
Acceptance of unilateral offer
Brodgen v Metropolitan Rly
(performance of contract constituted acceptance)
Manchester Diocesan Council for Education v Commercial and General Investments Ltd
Felthouse v Bindley
Carlill v Carbolic Smoke Ball
Definition of consideration
Currie v Misa
Consideration must be sufficient but need not be adequate
Thomas v Thomas
Consideration must be the act (or omission) or promise requested by the promisor in return for his promise.
???? look this up in textbook
Consideration must move from the promisee
Tweddle v Atkinson
Types of Consideration:
Executed
Forbearance
Past
Existing Duty under law
Contractual duty to third party
Existing duty under same contract
Good
Cook v Wright - Good if it is a good claim/ promisee truly believes it to be
Wade v Simeon - Bad claim is not good consideration
Bad
Collins v Godfrey - Bad (no new benefit)
Shadwell v Shadwell - Good (due to duty to third party)
Bad - no new detriment or benefit (Stilk v Myrick)
Legal ambiguities of Consideration
When there are fewer crew members, could it be argued there is in fact a new detriment due to larger workload?
consideration is provided if existing contractual duty provides a practical benefit to the promisor
Part payment of a debt cannot discharge entire debt as there is no new consideration
Practical benefit may be found as consideration when there is a promise of more money for existing duties but such a benefit is not present for part payment
Practical benefit can be obtained from part payment of a debt
Stilk v Myrick
Williams v Roffey
Foaks v Beer
RE Selectmove
MWB Business Exchange v Rock
Every party must have the intention to be bound - commercial agreement not social
Baird Textile Holdings Ltd v Marks Spencer Plc
Intention is judged objectively
Edmonds v Lawson
Intention in social contacts:
Assumption due to family relationship of no contract - legal intention not explicitly stated
If a promisee relies on a promise to their detriment, a contract has been formed - obiter. Still social so no contract.
Some social agreements are binding - parties were not on good terms so court looked at their relationship and held it to be a contract
Balfour v Balfour
Jones v Padavatton
Merritt v Merritt
Intention in Commercial contracts
Assumption that there is an intention to form contract also shown by deposit in bank
Collective agreements (between trade unions and management of company) not enforceable
Letters of comfort are not legally binding documents - refusal to act as a guarantor showed no intention to be legally bound
Letters of intent - not legally binding contract but it may become one if parties reach agreement to start work
Negative intention
Carlill v Carbolic Smoke Ball
Ford Motor Co Ltd v Amalgamated Union of Engineering
Kleinwort Benson Ltd v Malaysia Mining Corpn
RST v Muller
Rose & Frank Co v J.R. Crompton
Withdrawal of a unilateral offer:
Not allowed to withdraw after parties commence performance
Withdrawal is allowed after beginning of performance
Errington v Errington
Luxor (Eastbourne) Ltd v Cooper
The Battle of the Forms and Doctrine of Last Shot - contract concluded on the terms of the last party to communicate those terms before performance starts
Butler Machine Tool Co Ltd v Ex-Cell O Corp 1979
