Tutorial 3 Flashcards
what is an offer?
a proposal made by an offerer (on certain terms) with a promise to by bound if unconditionally accepted by offeree
if accepted, an offer can be converted into an agreement
invitation to treat = ?
one party is willing to invite an offer
can be viewed as an invitation to negotiate
NOT an offer as there’s no intention overtly expressed
examples of invitations to treat?
advertisements
company prospectus
display of goods
call for bids in an auction
how can an offer come to an end? (revocation)
lapse of time
revocation
rejection
death
change of circumstances
does consideration need to be adequate and sufficient?
doesn’t need to be adequate
does need to be sufficient
sufficient consideration = ?
something of value that the courts see of value to make a bargain binding
adequate consideration = ?
the full justifiable market value of something
consideration doesn’t need to be adequate
is fulfilling an obligation imposed by law/contractual duty sufficient consideration?
no
it’s a duty that is already owed
what are the three types of misrepresentation?
fraudulent misrepresentation
negligent misrepresentation
innocent misrepresentation
fraudulent misrepresentation?
false statement made knowingly
affected party may rescind the contract and claim damages for tort of deceit
negligent misrepresentation?
false statement made due to lack of diligence
affected party can claim damages for tort of negligence
innocent misrepresentation?
false statement made believing it was correct
affected party can rescind the contract OR claim damages under misrepresentation act of 1967
misrepresentation = ?
false statement of fact made by one contracting party before the contract was made to induce the other contracting party
factors that undermine contracts?
misrepresentation
mistake
duress
undue influence
formalities
mistake = ?
act made unintentionally which renders contract void
includes common, mutual and unilateral mistakes
common, mutual, unilateral mistake?
common - both parties make the same mistake
mutual - misunderstanding between both parties
unilateral - when only one party misunderstood the contract
duress = ?
threat used to coerce someone against their will
undue influence = ?
contract has been entered as a result of improper pressure
difference between duress & undue influence?
duress is more to do with threat, undue influence relates to exploitation of a relationship
formalities = ?
certain contracts must be made by way of deeds, others must be evidenced in writing
contract by deed = ?
a deed of formal legal evidence that is signed, witnessed and delivered to create a legal obligation
(e.g., gift of tangible goods, transfer of land)
contracts evidenced in writing = ?
certain types of contracts are required by statutes to be evidenced in writing
(e.g., sale/transfer of shares, guarantees)
contractual capacity = ?
any person can enter into a contract
what are the two categories of persons?
natural persons
artificial persons
natural persons = ?
human beings
the following factors destroy the capacity of human beings:
- persons under 18 (minors)
- persons under the influence of liquor
- persons of unsound mind
how do contracts work for under 18s (minors)?
- persons under 18 cannot enter binding contracts
- contracts entered into by a minor are voidable at the option of the minor
- the contract is binding on the major, though (adult)
in what instances can a minor be bound by a contract?
- contracts where minors derive a benefit
- minor buying necessities (should pay a normal price)
artificial persons = ?
companies
companies are bound by the memorandums they generate when incorporated
purpose of a company memorandum?
states the company’s commercial objectives
determines the contractual capacity of the company
when does a company contract become voidable?
when it enters into a contract exceeding the powers given to the company by its memorandum
in what form should a contract be made?
can be made in any form
e.g., written, oral, inferred via conduct)
however certain contracts must follow certain formalities
which contracts must be in the form of a deed?
- leases for a period of 3+ years
- transfer the ownership of land
- mortgage
- a promise not supported by consideration
which contracts must be in writing?
- transfer of shares
- bills of exchange and cheques
- consumer credit contracts
- contracts of marine insurance