Week 2 Contract formation

Question 1

Requirements for a contract to be validity concluded

Answer 1

• Agreement of the parties
• An intention to create legal relations
• Legal capacity of the parties

Question 2

Formation of a valid contract

Answer 2

• Offer by the offeror

- Acceptance by the offeree

Question 3

When does an proposal amount to an offer?

Answer 3

Art. 2:201 (1) PECL

Question 4

How is it called when there is no offer?

Answer 4

invitation to treat (England)
invitio ad offerendum (Germany)
offre de pourparlers (France)
uitnodiging om in onderhandeling te treden (NL)

Question 5

England: could reasonable person in the position of the offeree think an offer was made?

Answer 5

Gibson v Manchester City Council (1979)

Question 6

Offer must accept sufficiently definite terms

Answer 6

• The good to be sold
• The price
  Art. 1583 CC
  Art. 6:227 BW

Question 7

Intuitu personae contracts

Answer 7

Rent/sell/buy a house/apartment/land, employment contracts credit agreements

Question 8

Receipt theory

Answer 8

The moment the message is received by the offeror

Question 9

Non-instaneous-communication

Answer 9

Postel theory: the acceptance becomes effective at the moment of posting

Question 10

Instanteneous

Answer 10

Parties sit opposite to each other/speak over the phone to each other

Question 11

Gratuitos transaction

Answer 11

Assumption that a party does not intend to be legally
bound unless the good is given on the spot (‘immediate
donation)

Therefore:
Civil law: notarial deed
Common law: deed

Question 12

Who concludes contracts?

Answer 12

• Business-to-business (B2B)
• Business-to-consumer (B2C)
• Contract between two individuals (C2C)

Question 13

Bilateral contract

Answer 13

a promise by one party in exchange for a
promise by another party

Example: sale of goods
• The buyer promises to pay the price
• The seller promises to deliver the goods

Question 14

Unilateral contract

Answer 14

a party is not promised anything in return for
its performance

Example: donation

Question 15

Commercial agreement

Answer 15

is legally binding —> Other party has to prove that it did not intend to be bound Stearns Bank v Forum Global Equity Ltd (2007)

Exception: honour clause —> say that they do not intend to be bound

Question 16

Social agreements

Answer 16

Even stronger assumption against being legally

bound: ‘freedom from contract e.g BBQ

Question 17

(Family) Domestic agreements

Answer 17

Mostly not enforceable

Exception: Prenups Balvour v Balovour

Question 18

Consideration English law

Answer 18

Each party to the contract must
give, do or promise something in return for
the promise

Rules of consideration:

1. Consideration need not be ‘adequate’ (Parties decide what they regard as something of value)
2. Past consideration is not good consideration
3. An existing duty does not amount to valid consideration
4. The promise to accept less payment of a
   debt and not to sue for the balance is no
   good consideration for discharge of the
   entire debt

Question 19

Promissory Estoppel

Answer 19

legal principle which can stop a person from going back on a promise an make it enforceable even if it is not supported by consideration
Central London Property Trust Ltd v High Trees House Ltd [1947]