Tutorial 3

Question 1

what is an offer?

Answer 1

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

Question 2

invitation to treat = ?

Answer 2

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

Question 3

examples of invitations to treat?

Answer 3

advertisements
company prospectus
display of goods
call for bids in an auction

Question 4

how can an offer come to an end? (revocation)

Answer 4

lapse of time
revocation
rejection
death
change of circumstances

Question 5

does consideration need to be adequate and sufficient?

Answer 5

doesn’t need to be adequate

does need to be sufficient

Question 6

sufficient consideration = ?

Answer 6

something of value that the courts see of value to make a bargain binding

Question 7

adequate consideration = ?

Answer 7

the full justifiable market value of something

consideration doesn’t need to be adequate

Question 8

is fulfilling an obligation imposed by law/contractual duty sufficient consideration?

Answer 8

no

it’s a duty that is already owed

Question 9

what are the three types of misrepresentation?

Answer 9

fraudulent misrepresentation
negligent misrepresentation
innocent misrepresentation

Question 10

fraudulent misrepresentation?

Answer 10

false statement made knowingly

affected party may rescind the contract and claim damages for tort of deceit

Question 11

negligent misrepresentation?

Answer 11

false statement made due to lack of diligence

affected party can claim damages for tort of negligence

Question 12

innocent misrepresentation?

Answer 12

false statement made believing it was correct

affected party can rescind the contract OR claim damages under misrepresentation act of 1967

Question 13

misrepresentation = ?

Answer 13

false statement of fact made by one contracting party before the contract was made to induce the other contracting party

Question 14

factors that undermine contracts?

Answer 14

misrepresentation
mistake
duress
undue influence
formalities

Question 15

mistake = ?

Answer 15

act made unintentionally which renders contract void

includes common, mutual and unilateral mistakes

Question 16

common, mutual, unilateral mistake?

Answer 16

common - both parties make the same mistake

mutual - misunderstanding between both parties

unilateral - when only one party misunderstood the contract

Question 17

duress = ?

Answer 17

threat used to coerce someone against their will

Question 18

undue influence = ?

Answer 18

contract has been entered as a result of improper pressure

Question 19

difference between duress & undue influence?

Answer 19

duress is more to do with threat, undue influence relates to exploitation of a relationship

Question 20

formalities = ?

Answer 20

certain contracts must be made by way of deeds, others must be evidenced in writing

Question 21

contract by deed = ?

Answer 21

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)

Question 22

contracts evidenced in writing = ?

Answer 22

certain types of contracts are required by statutes to be evidenced in writing

(e.g., sale/transfer of shares, guarantees)

Question 23

contractual capacity = ?

Answer 23

any person can enter into a contract

Question 24

what are the two categories of persons?

Answer 24

natural persons
artificial persons

Question 25

natural persons = ?

Answer 25

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

Question 26

how do contracts work for under 18s (minors)?

Answer 26

- 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)

Question 27

in what instances can a minor be bound by a contract?

Answer 27

- contracts where minors derive a benefit - minor buying necessities (should pay a normal price)

Question 28

artificial persons = ?

Answer 28

companies companies are bound by the memorandums they generate when incorporated

Question 29

purpose of a company memorandum?

Answer 29

states the company's commercial objectives determines the contractual capacity of the company

Question 30

when does a company contract become voidable?

Answer 30

when it enters into a contract exceeding the powers given to the company by its memorandum

Question 31

in what form should a contract be made?

Answer 31

can be made in any form e.g., written, oral, inferred via conduct) however certain contracts must follow certain formalities

Question 32

which contracts must be in the form of a deed?

Answer 32

- leases for a period of 3+ years - transfer the ownership of land - mortgage - a promise not supported by consideration

Question 33

which contracts must be in writing?

Answer 33

- transfer of shares - bills of exchange and cheques - consumer credit contracts - contracts of marine insurance