Introduction to Contract Law and Offer

Question 1

What is a Contract?

Answer 1

Agreement or set of promises that the law will enforce

Question 2

What makes up a Domestic Contract?

Answer 2

• Predominately case law
• ACL

Question 3

What makes up the International Contract?

Answer 3

• UNIDROIT Principles of International Commercial Contracts (2016) = non-binding
• UN Convention on Contracts for the International Sale of Goods = binding for contracts for international sale of goods

Question 4

What are the 4 hints that it is a contract?

Answer 4

• Agreement b/w parties –> offer made by offeror and accepted by offeree
• Must be complete and certain
• Consideration = each party must give sth in return for the other’s promise
• Intention to create legal relations

Question 5

What is a Bilateral Contract?

Answer 5

• 2 parties in a contract
• Both parties exchange a promise or set of promises e.g. A promises to transfer ownership to B. B promises to pay $1000 in return.
• A and B’s promises are executory = performed at some point after the contract is formed

Question 6

What is a Unilateral Contract?

Answer 6

• Typically REWARD scenarios
• Only 1 promise is made e.g. A promises to reward B if B finds the dog
• B accepts A’s offer. Contract is FORMED when B performs obligations… No need to give notice of acceptance prior to performance

Question 7

What is an Offer?

Answer 7

• Indication by one person to another of a willingness to contract on certain disclosed terms

Question 8

How is a contract formed?

Answer 8

ACCF
Agreement (offer and acceptance)
Consideration
Certainty
Formalities

Question 9

What is ‘Mere Puff?’

Answer 9

• Exaggerated sales talk is NOT considered an offer

Question 10

What are the 5 different ways to Terminate an offer?

Answer 10

• Revocation
• Rejection and Counter Offer
• Lapse of time
• Failure of a condition and Changed Circumstances
• Death of Offeror/Offeree

Question 11

What are the features of ‘Revocating an Offer?’

Answer 11

• Occur at ANY time before acceptance
• By words or action inconsistent with the continuance of offer
• Effective when it reaches the offeree
• Offers to the public at large can be revoked in the same way the offer was made

Question 12

What are 2 exceptions to revocating an offer?

Answer 12

1. If consideration has been paid to KEEP the offer open
2. If a unilateral contract, performance has commenced and there is an implied contract not to revoke or an estoppel

Question 13

What are the features of ‘lapse of time?’

Answer 13

• Offer may be open for a specific time
• If no period specified, the time given will be ‘reasonable’ given the circumstance

Question 14

What are the features of ‘Death of an offeree/offeror?’

Answer 14

• Offer will lapse on death of offeror (where offeree knows the death)

Question 15

What are the features of ‘Failure of a condition and changed circumstances?’

Answer 15

• Express condition - offeror may stipulate circumstances in which an offer will stay open or lapse, or which must be satisfied before an offer can be accepted
• Implied condition: If the offeror does not do so expressly, it may still be obvious to an objective observer that the offer was made on a CERTAIN circumstance

Question 16

What are the features of ‘Rejection and counter offer?’

Answer 16

• Once an offer is rejected it can no longer be accepted
• Counter offer is treated as rejection
• ‘Mere inquiry’ is distinguished from a counter offer and not a rejection

Question 17

What is an Invitation to Treat?

Answer 17

• Invite for others to MAKE an offer or enter into negotiations / Not an offer b/c lacks sufficient indication of willingness to bound

Question 18

What are the 5 different categories of Invitation to Treat?

Answer 18

AASOT

Question 19

Shops for Invitation to Treat

Answer 19

Just b/c goods are displayed does NOT mean its an offer. Customer MUST take it to cashier to create an offer.
- Goods displayed are an ‘invitation to treat’

Question 20

Online for Invitation to Treat

Answer 20

• Forming a contract is that:
  a) Is not addressed to one or specific parties; and
  b) generally accessible to parties making use of information systems

Question 21

Auctions for Invitation to Treat

Answer 21

• Auction is ITT
• Bid is offer
• ‘Offer’ is accepted by fall of hammer

–>
Means that offeror can:
- Withdraw from offer before acceptance
- Seller can refuse to accept a bid and;
- Buyer can withdraw a bid from acceptance

Question 22

Tenders for Invitation to Treat

Answer 22

Prospective purchaser of goods + services will often assess potential suppliers through a tender process. Suppliers effectively bid for the work through submitting a tender