Lecture 3 Flashcards
What is “Subject to Contract”?
neither party can be legally bound to their word unless a formal agreement has been reached or until a formal contract has been signed
Contract Formation
(1) Offer made by one party
(2) Offer accepted by the other party
(3) The parties intended to create a legal relation
(4) The terms of the contract are sufficiently certain and capable of being enforced
(5) There is consideration on both sides
Acceptance
Assent
1) must be final, i.e. not tentative
2) must be unqualified, i.e. no conditions or variations
3) must be objectively manifested—subjective assent is neither necessary nor sufficient
4) may be expressed through conduct
Subject to contract exception?
But “subject to contract” may be waived if subsequent conduct demonstrates that the parties intended to be bound.
Consideration
Where two parties exchange something valuable that leads to a contract
Consideration
Where two parties exchange something valuable that leads to a contract
What is a domestic agreement?
A Domestic Agreement is a written, legal document that can be entered into by a couple living together
The scope of presumption
If a couple living together in “amity”, it is deemed that there is not a contract because the consideration is built off their natural love and affection.
However, if a couple is at a point of separation, it is presumed that they have legal intentions to split and cut dry.
Rebutting the presumption
Shown in the cases of a family business, the legal intention would be evident.
Secondly, it may be rebutted where the parties have acted to their detriment in reliance upon the agreement that has been concluded between the parties.
Dependent on the facts of the case
Detriment - Giving up legal right
Social agreements is there legal intentions there?
No, it is presumed that there are not any legal intentions in a social agreement context.
Take the case, (Simpkins v. Pays [1955] 1 WLR 975.)
Plaintiff, defendant, and the defendant’s grandaughter entered into a competition in the sunday newsletter.
They shared the postal fee and entry fee.
It was wrote in the defendant’s name, of the prize.
One week, they won the prize and the defendant received a cash amount of 753 pounds.
The defendant refused to share one-third of the prize on the grounds that they would not be legally binding (no contract.)
The Judge ruled in this social context, that the agreed prize would be split three ways.
There was a mutuality in the arrangement, it was not very formal but it was effective.
That every week, it would go in the name of the defendant, and that there was success, it would be shared.
Nature of a very informal syndicate so that they should all get the benefit of success.
Unilateral contacts + bilateral contracts
Unilateral contracts: The contract was formed on the act of the offeree.
Bilateral contracts: An exchange of promises from the offeror and offeree.
A collective agreement shall be conclisvely presumed not to have been intended by the parties to be a legally enforceable contract unless the agreement–
Is in writing, and Contains a provision which (however expressed) states that the parties intend that the agreement shall be a legally enforceable contract.
What is the pre-existing rule?
That the parties already does what they are obligated to do in exchange for a modification of the contract, it will be voidable.
Ie, if a builder agrees to construct a building for a specified price but later demands more money to complete the job, the owner’s promise to pay the additional amount is not enforceable because the builder is already legally obligated to complete the construction for the agreed-upon price.
What is practical benefit?
Where A and B are in and existing contract and A promises to give more to B this promise will be binding if A receives a practical benefit even though B is only doing what they promised to do under the original contract.
In short, if A receives any sort of factual benefit in return for promising to give more to B, a court will find consideration for that promise and A must give the extra to B.
The practical benefit consists only of the promisor’s hope that he or she will be put in as good a position as if the original contract had been performed.
What is the silk rule?
In order to vary a new contract, fresh consideration must be provided.
(Abandons old contract into new contract)
Stillk v. Myrick (1809) 170 ER 1168
Exceptions to past consideration?
Conclude on evidence that the consideration was not in the past, but in one overall transaction.
How can consideration be seen in debts?
Part payment of a debt is not good consideration for the discharge of the entire debt.
Past consideration definition + example
In contract law, past consideration is when an act or forbearance occurs before a promise is made, and is generally not considered valid or legally binding.
Unexpressed bargain between X and Y according to which X agreed to wash Y’s car in return for payment then the promise will be enforceable.
if X washed Y’s car and Y then separately promised to pay X €15 then X will not be entitled to sue Y for payment because the consideration that he provided for Y’s promise of payment, namely washing the car, was in the past.
Performance of a contractual duty owed to a third party
Performance of a contractual duty owed to a third party does constitute consideration for a promise given by another party.
Performance of a duty imposed by law
Traditional rule: performance of a duty imposed by law, or the promise to perform such a duty, does not, in law, amount to provision for consideration
Performance of a contractual duty owed to the promisor
Whether or not the performance of a contractual duty to owed to the promisor is good consideration for an additional payment made by the promisor has proved to be vexed in English law.
Case example: Williams v. Roffey Bros
Rule of Foakes v. Beer
Prevents parties from discharging an obligation by part performance. (Part payment on or after the date of the debt is not good consideration for the creditors promise not to claim the balance.)
Pinnel’s Rule
The promise to pay part of a debt or the payment of part cannot be considered for a discharge of the whole debt.
Economic duress
One party’s improper or illegal conduct that causes the other party’s fear of economic hardship and the fear prevents the party from engaging in commercial agreement with free will
