Nature of a Contract

Question 1

What is a contract?

Answer 1

An agreement between 2 or more parties that is enforceable by law

Question 2

What does a contract need in order to be deemed valid?

Answer 2

-An offer
-Acceptance
- Contractual Capacity
-Intention to create legal relations
-Consideration

Question 3

Unilateral Contract

Answer 3

Created when one party pays another party to perform an action
Can come about:
* as a result of reward
* through advertisements, when an advertiser promises to pay members of the general public, if they take a course of action

CL: Carlill v The Carbolic Smoke Ball Co.Ltd

Question 3

Types of contracts

Answer 3

-Unilateral
-Bilateral
-Collateral

Question 4

Bilateral Contract

Answer 4

Reciprocal arrangement between 2 parties-both parties promise to perform an act in exchange for the others act.

Question 5

Collateral Contract

Answer 5

-Secondary to the main contract but stands independently and separately.
-Can be held between original parties but can be made with a third party.
-It may be because some terms need to be added to the main contract, if there are errors in the main contract, or if the contracting parties are different.
-This contract may override/supplement the main terms of the contract

Question 6

Carlill v The Carbolic Smoke Ball Co. Ltd

Answer 6

The co. advertised a medical cure for influenza and colds stating that £100 would be paid to anyone who contracted influenza/cold after having used the ball 3 times daily for 2 weeks. Mrs Carlill bought in of the balls and did as she was instructed when she contracted influenza. Judgement was in favour of Mrs. Carlill