Introduction

Question 1

What is a contract?

Answer 1

A contract is a legal enforcement of agreements and promises OR an undertaking by someone (unilateral ‘promise’)

Question 2

Are all agreement contracts?

Answer 2

No

Question 3

What are the four components of a contract?

Answer 3

1. Notion of agreement
2. Notion of bargain
3. Mutuality - quid pro quo - doing something and getting something in return (like an oyster trip)
4. Creation of legal liability - when something goes wrong, you as a consumer have rights (TFL, if charged too much, you can get a refund)

Question 4

What are the four components of a VALID contract?

Answer 4

1. Offer
2. Acceptance
3. Consideration
4. Intention to create legal relations

Question 5

What is acceptance?

Answer 5

Acceptance is a ‘final unqualified expression of assent to all the terms of an offer’

Question 6

How can acceptance be communicated? (mode of acceptance)

Answer 6

Acceptance can be communicated in 3 ways
1. Words (orally) verbal contract
2. In writing (written contract)
3. Conduct
Acceptance must match the terms of the offer and must be made in response to the offer

Question 7

How must acceptance be communicated between parties?

Answer 7

Holwell Securities Ltd v Hughes [1974] - acceptance should be communicated to the offerer
Entores v Miles Far East Corp [1955] - communication should be received by the offerer

Question 8

Are there any exceptions to the rule of communication of acceptance?

Answer 8

Yes, three exceptions to the rule.
1. Silence - Felthouse v Bindley [1862] - if you accept the offer and the offerer does not hear you, the contract is void - has not been entered or completed.
2. The Postal Rule - Adams v Lindsell - post carries risk of delay or non-delivery - TPR places burden of risk on the offerer - unless they take steps to guard against it (stamped delivery)
3. Instantaneous communications - TPR does not apply. Contract via email, when does acceptance take place? When you send the email? Or when the party receives the email? Mondial Shipping v Astarte Shipping (The Parmela) [1995]

Question 9

What is a counter-offer?

Answer 9

An offer which counters the original offer

Question 10

What is a conditional acceptance?

Answer 10

When you accept a deal but wish to consult a third party or advice regarding the nature of the contract. It is an expression of future intention to enter a contract

Question 11

How does a counter-offer differ from a conditional acceptance?

Answer 11

The case of Alpenstow Ltd v Regalian Properties plc [1985] - if you do not accept the terms as they are from the beginning and propose a counter-offer, the seller can refuse the sale if you were to return and offer to pay the original offer price

Question 12

What is consideration?

Answer 12

Currie v Misa [1875] - “consideration is the price for which the promise of the other is bought. It must be ‘something of value’ which is recognised by the courts as amounting to consideration”
For there to be an enforceable agreement, each party must gain something from the agreement. This something is consideration.

Question 13

What are the three types of consideration?

Answer 13

1. Executory - the contract exists and both parties assume rights and liabilities - promises to be performed in the future
2. Executed - parties have done all that was required of them.
   Past - NOT GOOD OR VALID CONSIDERATION - Roscoria v Thomas [1842] E.g. you do something for your neighbour without discussing any deal and after completing, your neighbour said she would give you £100. She is under no obligation to do this, as you have already completed the action without discussing the deal

Question 14

Are there any exceptions to the past consideration rule?

Answer 14

Yes, Lamplight v Brathwait [1615] - the courts may be prepared to find a consideration where the past service is preceded by D’s requested performance - for the exception to apply, the parties must have assumed that the service would be paid or rewarded in some way (Re Casey’s Patents 1892)
Consideration must move from the promise - only a person who has provided consideration in return for a promise may enforce that promise as a contract - Tweddle v Atkinson [1861]

Question 15

Does consideration need to be of equal value?

Answer 15

No, the contract does not need to be of equal value, just needs to be SOME. E.g. selling a Ferrari for £1, courts will not interfere with what the parties have negotiated.
Thomas v Thomas [1842]
Chappel v Nestle [1960]

Question 16

What is a unilateral contract?

Answer 16

A contract in which there is just one party - e.g. if you lose your pen and offer a general reward to anyone who finds it, you are the only one bound, but there is still a contract.

Question 17

What is the doctrine of objectivity?

Answer 17

A fundamental principle that means that the law is NOT concerned by what is in your mind, but by what you have actually said or done

Question 18

What is revocation?

Answer 18

The concept that an offer may be revoked AT ANY TIME BEFORE it is accepted

Question 19

How can revocation be effective/accepted?

Answer 19

Revocation must be discussed and communicated to the offeree
Bryne v Van Tienhoven - revocation by post DID NOT REACH the offerer in time - the rule prevailed

Question 20

Can an offer be rejected?

Answer 20

Yes, the offeree may have responded with a counter-offer, but it may also be that they simply reject the offer, with no suggestion of an alternative deal - either possibility will terminate the offer
Lapse of time will also terminate the offer - Ramsgate Victorian Hotel Co Ltd v Montefiore [1866]
Death also terminates a contract