Week 2&3: Formation Of Contract Flashcards
What is a contract?
An agreement between two parties having the capacity to make it. Performance can’t be impossible or illegal.
What is the objective interpretation?
Commercial contracts are made according to what people say
As per Muirhead & Turnbull v Dickson
What is Mathieson Gee v Quigley?
Mathiesons statement was not an offer and therefore Q could not accept. About silt
What are the five essential terms of contract?
- Subject matter
- Price
- Nature
- Quality
- Identity
Why must a contract have the five essentials?
Otherwise unenforceable for lack of certainty.
Contradicted in Avintair v Ryder
Does there need to be intention to create legal relations?
Yes, as per
W S Karoulias v Drambuie
What’s the difference between offers and pre-contractual statements?
Invitations to treat are requests for offers and therefore cannot be accepted.
As per Fisher v Bell, held not guilty
What are adverts usually viewed as?
Invitations to treat even though they have price confirmed
As per Partridge v Crittenden
What about tenders?
Language used very important, case by case situation
What is special about Carlill v Carbolic Smokeball company?
Given offer, no need for communicated acceptance. Reward went beyond price and subject matter.
When can an offer be withdrawn
Up to the point where the offeree makes an unqualified acceptance.
See postal rule
When does an offer create legal obligations.
Once it has been accepted, by conduct or unqualified acceptance from an offeree back to the offeror.
What is an unqualified acceptance?
Acceptance that adds no extra terms
What is a qualified acceptance?
An acceptance where stipulations are stated. Not really an acceptance at all but a counter offer
As per wolf v wolf, only one offer can stand at a time, so counter offer makes first offer fall
What other ways can an offer be terminated?
After effluxion of time
Death of either party
What are cross-offers?
Where parties are at cross purposes and therefore no acceptance is made.
As per Tinn v Hoffmann
Can silence count for acceptance?
Can’t say if u don’t respond in a day I’ll take it as acceptance. Can have need for express acceptance waived as in Carlill.
Acceptance effective
What is needed for a contract and how is it tested?
Consensus in idem.
Tested objectively, what facts and actions suggest
What is the postal rule?
The mere act of posting concludes the contract, without communication to the offeror.
Doesn’t apply to faxes, notice of intention and it’s soon to be repealed
Thomas v James?
J offers
T posts acceptance
J post revocation
First division held concluded contract
Are unilateral promises common?
No many system don’t view gratuitous things as contract. Scotland do but very hard to prove
What are the three types of obligation?
Completely non-obligatory
Potentially Obligatory
Obligatory without more
Can a promise be revoked?
No, but offer can
What else about promise
Promise binds promise even if promisee ignorant
Presumption in favour of contract
Effect of firm offer?
Offer can not be withdrawn in stated time
Does a promise have to be written?
Not in the course or business as per RBS v Carlyle
What obligations must be in formal writing?
Contracts of transfer of land
Gratuitous obligations, not under the course or business
What is formal validity?
Granter’s subscription
Traditional signature
Electronic signature attached to electronic document
What is probativity?
Tries to stop fraud by adding witness
What is personal bar?
Writing not needed if
1) Obligee has acted in reliance of contract and acquiescence of obligor with material extent affect
And
2) interests would be adversely affected to material extent if other party allowed to withdraw
Example?
Smith v Oliver goes against but pre 1995 Act ROWSA
What does the Contract Act 1997 state?
Where a contract is completed in written form it will be presumed to have all the terms contained.
Parties can prove that there were other additional terms.
