WEEK 3

Question 1

What is a contract?

Answer 1

• Agreement between two or more persons that is legally binding

Question 2

Elements of a contract

Answer 2

1 – Agreement
2 – An intention to create legal relations
3 – Compliance with required formalities where applicable
4 - Consideration
5 – Capacity to contract

Question 3

Form of contract

Answer 3

• Simple contracts – contracts that can be made in any form
• Speciality contracts – contracts that have to be in a particular form to be legally enforceable by the courts
• Bilateral contract
• Unilateral contract

Question 4

Bilateral contract

Answer 4

• where one party promises a certain action in response to the other party’s action
• E.g. buying goods in a store, fixing someone’s car for an agreed price

Question 5

Unilateral contract

Answer 5

• one party makes a promise of an action if another party (or parties) executes an action, but no obligation to execute said action
• E.g. a reward for lost property, an insurance policy

Question 6

Termination by revocation

Answer 6

• The offer is withdrawn by the person making the offer
• An offer can be revoked at any time up until the offer is accepted, even if the offeror informs the offeree they will keep the offer open for a period of time

Question 7

Termination by rejection and counter offer

Answer 7

If a counter offer is made, this is regarded as a rejection of the original offer

Question 8

Termination by lapse of time

Answer 8

• If the offer has a time limit, it will expire at the end of that limit
• If no specified time limit, it will still expire after a reasonable time (could be weeks, months, years depending on nature of offer)

Question 9

Termination by death

Answer 9

• The deceased offeree is unable to accept an offer because they are dead
• If the offeror dies, then the offer terminates once the offeree knows of the death
• If the offeror dies and the offeree does not know of the death, could be legally uncertain, particularly if there is an element of part performance

Question 10

Acceptance

Answer 10

Acceptance of an offer is the unconditional acceptance to all the terms of an offer

Question 11

How can acceptance be made

Answer 11

-Acceptance can be made:
- Orally
- In writing
- Hammer fall at an auction
- Indicated by the conduct of the offeree

Question 12

Acceptance is Unconditional