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SQE Contract > Formation: Offer, Acceptance, Capacity > Flashcards

Formation: Offer, Acceptance, Capacity Flashcards

1
Q

What is an offer?

A

Expression of willingness to contract on certain terms, made with intention it will become binding as soon as it is accepted by the person to whom it is addressed

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2
Q

Willingness to be bound (offer) - test?

A

Objective (reasonable person regard as an offer?) and Subjective (must believe intended to make offer)

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3
Q

What is an invitation to treat?

A

Offer is incomplete, uncertain terms or no intention to be bound

e.g. ‘thinking’, potential asking price

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4
Q

Are window displays ITTs or offers?

A

GR: ITT
EXCEPTION: clear intention to be bound

Offer: customer at payment point
Acceptance: shop takes payment

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5
Q

Are Advertisements offers or ITTs?

A

GR: ITT
EXCEPTION: clear intention to be bound
EXAMPLES: unilateral contract or reward

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6
Q

What is a bilateral offer?

A

Promise for a promise

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7
Q

Is an auction WITH reserve an ITT or offer?

A

ITT= Auctioneers request for bids
Offer= bid (can be accepted or rejected)
Acceptance = fall of hammer
Bilateral contract between owner and bidder

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8
Q

withoUt

Is an auction WITHOUT reserve an ITT or offer?

A

Offer= request for bids
Acceptance = highest bidder
Unilateral contract to accept highest bid
Damages against Auctioneer

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9
Q

Measure of damages for failure to sell to highest bidder in auction without reserve?

A

Market Value of Goods - Bid

Amount Auctioneer sells for elsewhere irrelevant
Expectation loss

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10
Q

Is a tender an ITT or offer?

A

GR: ITT
EXCEPTION:
* promise to accept lowest tender; or
* promise to consider all conforming tenders (unilateral contract)

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11
Q

Measure of damages for breach of implied unilateral contract to consider conforming tenders

A

Loss of Opportunity

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12
Q

3 ways

How can an offer be terminated?

A
  1. Revocation
  2. Rejection
  3. Lapse of time
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13
Q

Can an offer be revoked once accepted?

A

No

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14
Q

Is a promise to keep an offer open binding?

A

GR: No
EXCEPTION:
1. offer has been accepted
2. consideration for promise to keep offer open

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15
Q

Can revocation be communicated by a 3rd party without authorisation from offeror?

A

Yes provided they are objectively perceived as reliable

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16
Q

When does acceptance of unilateral contract take place (cannot be revoked)?

A

GR: Acceptance occurs when performance is complete (no obligations until act is complete)

BUT

Partial performance is sufficient to prevent revocation
* 2 offers (express offer + implied promise not to revoke if specified act is started in a reasonable time)
* Acceptance and consideration for implied promise not to revoke is commencement of act

17
Q

What is implied rejection of an offer?

A

Counter offer which contains a definite proposal of its own (destroys original offer)

18
Q

When does lapse of time terminate an offer?

A
  1. Express condition; or
  2. reasonable time
19
Q

What is acceptance?

A

Complete and unqualified assent to all the terms of the offer

Must be communicated

20
Q

When is acceptance complete if postal rule applies?

A

On posting (not arrival)

Even if letter is lost

21
Q

3 conditions

When does the postal rule apply

A
  1. reasonable to use post (no strike, no prompt reply)
  2. letter is properly posted
  3. offeror has not excluded rule (stated must reach them / uses word ‘notice’)
22
Q

Is there a presumption of legal relations in a domestic agreement?

A

GR: No intention to create legal relations
EXCEPTION: facts show otherwise (separated / high value)

23
Q

Is there a presumption of legal relations in commercial agreements?

A

GR: strong presumption
EXCEPTION: facts show otherwise (clause states no legal relations)

24
Q

Are minors bound by contracts

A

GR: Minors are not bound but can sue other party
EXCEPTION: contract for necessaries OR beneficial service contract

Food, clothing and non-essentials (never trading contract)

25
Q

What is a contract for necessaries?

A
  1. food
  2. clothing
  3. non essentials depending on requirements at time of purchase

NEVER: trading contract

26
Q

Is a contract binding if party lacks capacity?

A

GR: a contract made whilst drunk or impaired is valid
EXCEPTION:
1. person was incapable of understanding nature of transaction; and
2. other party knew this to be the case

contract is voidable (binding unless person with incapacity recinds)

27
Q

Outcome if person if person lacks capacity and other party aware?

A

contract is voidable (binding unless person with incapacity recinds)

28
Q

Rules relating to revoking an offer?

A

GR: revocation must be communicated
EXCEPTIONS:
1. notice sent to last known address; or
2. choose not to read it; or
3. unilateral and revoked through same medium with same prominence; or
4. notice is sent electronically to business (communicated when it should have been read)

Note: Postal rule does not apply

29
Q

5 conditions

Requirements for acceptance?

A
  1. Offeree must know of offer
  2. Not been revoked rejected or lapsed
  3. corresponds exactly with terms of offer
  4. No uncertainty over agreed terms
  5. Communicated by offeree OR authorised agent
30
Q

How do the rules regarding communication of acceptance and revocation differ?

A
  1. Revocation can be given by a reliable 3rd party (acceptance must be communicated by authorised agent)
  2. The postal rule does not apply to notices of revocation.
31
Q

Exceptions to the GR acceptance must be communicated by offeree or authorised agent?

A
  1. unilateral contract (performance consistutes acceptance)
  2. offeree stipulates silence will amount to acceptance
  3. postal rule applies
32
Q

What is a unilateral offer?

A

A promise for an act

If you do X, I promise to do Y

33
Q

Battle of the forms

A
  • Counter-offer after counter-offer
  • last shot wins
  • Delivery may be regarded as acceptance by conduct of last set of T&Cs (if no delivery slip signed and returned)
34
Q

How do the court determine whether the parties have reached complete agreement?

certainty (binding contract)

A
  1. Parties in same trade (‘timber of fair specification’ ok)
  2. Trade usage (dealt with each other before?)
  3. Contract has been partly performed
  4. Objective mechanism for resolving uncertainty (arbitration clause / market price)
  5. Agreement on material terms? (agreement to buy car on HPA terms too vague)

SQE Contract (10 decks)

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