Topic 7 - Contract Law Flashcards
What is a contract?
a voluntary exchange of promises, creating obligations that, if defaulted on, can be enforced or remedied by the Courts
Does a contract have to be a written document?
No, a contract does not have to be a written document (there are some exceptions), although a written document may be evidence that a contract exists
Can the Court re-write a contract/agreement so that it is fair?
No, the courts must enforce the agreement as it stands
What are the 5 elements of a contract? (CCCLI)
- CONSENSUS: A meeting of the minds, identified by an offer and an acceptance.
- CONSIDERATION: The price that each party is willing to pay for a promise of the other party (does not have to be $).
- CAPACITY: The parties must be legally competent.
- LEGALITY: The purpose of the contract and consideration must be legal and not against public policy.
- INTENT: The parties must have an intention to be legally bound.
To reach consensus what 2 things must be fulfilled?
- there must be an offer
- an unconditional acceptance
if there is no __________ there is no contract
consensus
What is an offer?
An offer is a tentative promise, subject to a condition or containing a request, made by the offeror to the offeree. (ie. The offeror promises to do something or give something to the offeree IF……… the offeree does something or gives something in return).
Is an invitation to do business an offer?
No
What are the 3 essential things of an offer (3 C’s)
- Certain: terms of the contract must be clear otherwise contract is VOID
- Complete: all significant terms must be covered (at least 3 P’s: parties, property and price)
- Communicated: orally, in writing or by conduct (offeree cannot accept an offer made to someone else)
When can an offer be terminated?
An offer can be terminated any time prior to being accepted
What are the 4 main ways an offer can be terminated?
- Lapse: specified time expires, reasonable time expires or the offeror dies or loses mental capacity
- Revocation: withdrawal (must be communicated to the offeree)
- Rejection: terminates the offer
- Counter-offer: implies a rejection (an inquiry to whether the terms are the best possible is not a counter-offer)
The contract is formed when…
the offer is accepted (when received by the offeror)
Where is the contract formed?
General rule is that a contract is formed at the place where the acceptance is received by the offeror
What are the 3 essential requirements for acceptance? (PUC)
- Positive Form
- Unconditional & unequivocal
- Communicated to the offeror, unless conduct signifies acceptance
The General Rule:
Contract is formed when and where the acceptance is __________
Received
What is an exception to the General Rule?
the Post Box rule
What is the Post Box rule?
If Post Box rule applies, the contract is formed when and where acceptance is mailed
If offer is mailed, acceptance by mail is suggested. (Courts have extended the post box rule to include acceptance sent by courier.)
**The post box rule has not been extended to acceptances made using instantaneous forms of communication, such as fax, email, and text
The post box rule does not apply to what?
Revocations
If the offeror is silent as to the mode of acceptance, how is the mode of acceptance determined to be appropriate?
Using a reasonable person test
If you take the benefit of an offer are you deemed to have accepted it?
Yes
The approach taken by the courts when asked to enforce a contract, is that:
- The courts will re-write the contract so that it is fair.
- The courts will interpret the contract in the plaintiff’s favor
- The courts will refuse to enforce a contract if one party no longer wishes to be bound by it.
- The courts will enforce what the parties agreed to
- The courts will enforce what the parties agreed to
Which of the following does NOT terminate an offer?
- Rejection
- Lapse
- Withdrawal or revocation
- Consideration
- Consideration
What happens if the Post Box rule applies?
- The contract is not made until the offeror receives the acceptance.
- The contract is formed when the offeror receives the acceptance, but the contract is made where the offeree mails the acceptance.
- The contract is formed when and where the acceptance is mailed.
- The contract is made when the offeree receives the offer by mail.
- The contract is formed when and where the acceptance is mailed.
What are the 2 stages of contract law?
- Contract formation
- Performance of the contract
