Fundementals

Question 1

What is a deed?

Answer 1

A type of contract - must be signed in front of a witness, sealed and delivered in order for it to be valid.

No consideration when it comes to deeds

Question 2

How can contracts be made?

Answer 2

Orally, written or by conduct.

Question 3

What is a bilateral contract?

Answer 3

When both parties have things to do to fulfill the contract - they both agreem to do something. For example, one person will wash X’s car and X says he will give him money for it. Often this is where executory (future) considerations occur.

Question 4

What is a unilateral contract?

Answer 4

There is only performance from one party and the other repays in some way - acceptance happens when the one party does the act. Only the party that promises a reward is bound. Here you will find executory consideration

Question 5

If it it not a deed, it is a normal type of contract and therefore there is an importance C word that is used

Answer 5

Consideration

Question 6

What 2 things are needed for a contract?

Answer 6

Offer and acceptance

Question 7

What is an offer?

Answer 7

When offeror proposes something and intends to be bound.
It must be clear and certain: aka I will offer you etc, not ‘I might offer you’

Question 8

What is an acceptance?

Answer 8

When offeree agrees to the offerors proposal without any changes. Clear and uneqivocal acceptance.

Question 9

How do we test if the offeror had an intention to be bound by their offer?

Answer 9

Using the reasonable man test objective - would a reasonable man consider that there was an intention to be bound?

Question 10

What is an invitation to treat?

Answer 10

This is the first step to negotiation. It is basically asking people to make an offer for X thing at that price presented - IT IS NOT AN OFFER.
It is more like a suggestion.

Question 11

What are example of an ‘invitation to treat’?

Answer 11

Adverts
Auctions (unless it is for the highest bidder)
Display of goods for sale
Invitation to tender (unless it is a tender for the highest price or a unilateral offer)
Statements of price

Question 12

When is an advert NOT an invitation to treat but actually an offer??

Answer 12

When it is a unilateral offer - when the advertiser is promising payment for accepting and completing the offer.
The advert has made it clear in wording etc and money has been set aside for the performance of whatever the advertiser is offering.
Such as the Carlill v Carbolic Smoke

Question 13

Why are some auctions not an invitation to treat but actually an offer?

Answer 13

Because some auctions work like this ‘sold to the highest bidder!’

The bidder offers a price and the auctioner either accepts the offer or not etc. This is a unilateral contracts.

Whereas an invitation to treat auction would be that there is a vase for X money. Person buying either accepts or rejects offer.

Question 14

When are tenders NOT an invitation to treat?

Answer 14

1. When the tender is on a ‘to the highest bidder’ way of tendering. This would then be a unilateral contract.
2. When the tender is made to specific parties and there are certain conditions on when and how the bid should be submitted etc. These conditions etc are unilateral offers to consider the bid. The tender must then consider these applications as they are submitted.

Question 15

How can an offer be terminated? 5 ways

Answer 15

1. Acceptance
2. Rejection
3. Lapse
4. Revocation
5. Counter-offer

Question 16

What is the postal rule?

Answer 16

The postal rule is that when an offer is accepted by post, the parties to the agreement are legally bound as soon as the letter accepting the offer is posted, regardless of whether the letter is later received by the offeror or not.

Must be properly posted.

However, postal rule does not apply where it is unreasonable to send acceptance by post - whent they could have emailed instead.

Question 17

When can a bilateral offer be revoked?

Answer 17

When the revocation is reaches the offeree. That is when it is revoked.
Revocation is not active on posting - it must be received by the offeree. For example the postal rule: if offeree posts their acceptance before the revocation reaches them (though offeror posted the revocation before the acceptance was posted), the contract will be active.

Question 18

How can a unilateral offer be revoked?

Answer 18

MUST also notify the persons that the offer has been revoked.

If performance has already begun, then the offer cannot be revoked.

If offer was made via advertisement - it is important that the revocation is made in the same way it was when it was advertised.

Question 19

When an acceptance has been emailed, when is it considered that the contract has been made?

Answer 19

When the acceptance email reaches offerors serveror.

Question 20

When does acceptance not have to be communicated?

Answer 20

In unilateral contracts - performance of contract acceptance is enough.

Acceptance by conduct - if performance has begun. Even ofc when the offer was oral ..

When the acceptance has been posted - the postal rule.

Question 21

When is the ‘intention to create legal relations’ presumed?

Answer 21

In commercial agreements.

It is not presumed in domestic agreements.

Question 22

In a commercial setting, how can it be indicated that there is no intention to create legal relations, which is the default?

Answer 22

Parties can make it clear.
Especially by inserting a clause to this effect.
Stating that the agreement is ‘subject to contract’

Question 23

How can you rebutt the presumption that there is no intention to create legal relations in a domestic agreement?

Answer 23

By making it clear that this is a contract.
Exchange of money.
Solicitors are involved.
The agreement is formally written down.

Question 24

Can a contract with a mentally incapable person or a drunk person be valid?

Answer 24

Yes. But generally voidable.

To be valid: necessaries exception will apply or the offeror must be unaware of the offeree’s state.

Question 25

What is the necessaries exception?

Answer 25

When a minor mentally incapable person or a drunk person needs whatever it is for their benefit and they are not being overcharged for it. This is where a valid contract can be made with them.

Question 26

What is certainty?

Answer 26

When the contract is clear and complete - so is easily enforceable.

However, courts can read in some terms if it is reasonable to do so to make the contract enforceable.

Question 27

What must one party do if they want to be paid more under a contract?

Answer 27

Will need fresh consideration. Party will need to do more to get more money. Extra services or more effort. Need to ask the opposing party what they think before doing the extra work.

Question 28

If one party to a contract does soemthing that is of practical benefit to the other party…

Answer 28

For example,

By completing a pre-existing obligation in time, at the other party’s promise to pay more resulting in themselves avoiding a penality or gaining a benefit, this practical benefit = consideration and they should pay the party more, in addition to whatever has been agreed in the contract, for following through.

This is fresh consideration …

Practical benefit = either a benefit or avoiding a penalty.

Question 29

Can the middleman have 2 contracts?

Answer 29

Yes.

For example, the middleman is a delivery driver.
He has a contract with A to deliver stock to B. He can also have a contract with B to ensure that stock is delivered to B.

This allows B to sue the middleman if he doesn’t do his job.