week one & two Flashcards
how does peel define a contract
A contract is an agreement giving rise to obligations which are enforces or recognised by law
contracts involve ____ promises and exchange
mutual
what is the informality feature of contract law
whether contracts have to be in a particular form - in nz they din’t and a written and oral contract are just as enforceable in court
what is the ubiquity feature of contract law
contracts are ubiquitous - they are everywhere and all around. you cannot get away from them
what is the variety feature of contract law
many different types of contracts and varieties that most contracts fall into
what is the importance feature of contracts
exchanging/purchasing is fundamental to our lives and contracts are the legal form of those exchanges
how many features of contract are there
4
what are the 4 features of contract
informality, ubiquity, variety, importance
what was a contract related problem in the english civil war
fraudulent oral contracts
what did fraudulent oral contracts in the english civil war lead to
the Statute of Frauds
what were the problems with the statute of frauds
parties acting in compliance to a contract and then a court refusing to enforce it because it wasn’t in writing
a different type of fraud where people entered into oral agreements and later pulled out saying there was no agreement because it needed to be in writing
what is left of the statute of frauds in nz today
property law act s24, 25, 27 - selling land has to be in writing and so does any situation where a person is a guarantee to an owing of money
are there statutes where ad hoc provisions require contracts to be in writing
yes - employment relations act 2000, individual agreement must be in writing
a contract usually involves a mutual making of promises/exchange. can there be a one sided contract?
yes
what is a simple contract
traditional term for an exchange contract
what was required for a contract under seal
signed, sealed, delivered - written, signed and sealed by the party giving the thing, delivered to the other party
what was required for a contract by deed
written, properly executed (signed and the signature witnessed) and delivered
how many requirements are there for contracts
4
what is an offer
the expression of the willingness to contract immediately upon acceptance
define an offeror
person who makes an offer
define an offeree
person to whom an offer is made
who are the parties in Smith v Hughes
Mr Smith (farmer) and Mr Hughes (racehorse trainer)
what did the farmer want to sell to the racehorse trainer in smith v hughes
some oats, he left a sample
did the racehorse trainer buy oats from the farmer in smith v hughes
yes, he sent a letter offering to buy some oats for 34 shillings
what happened when the oats arrived to the trainer in smith v hughes
trainer found out they were new oats, he wanted old oats which are easier for horses to digest. he refused the delivery and so the farmer sued him for the price
what was the trainers vs the farmers argument in smith v hughes
trainer: he only ever wanted old oats and the price was steep for new oats
farmer: sample was new oats and the letter of offer never mentioned that the offer was for old oats
what was the question for the court in smith v hughes
what was the offer made: was the offer for old oats or new oats matching the sample
what did blackburn j’s comment in smith v hughes mean
it doesnt matter what the actual intention of the offer is, it matters what a reasonable oferee would think the offer is
what was the result of smith v hughes
there was a binding contract for the sale of the oats, and the farmer was entitled to that contract being enforce
what happened in OT African Lines v Vickers (intially)
vickers had a contractual dispute and as a result OTAL had claimed $700,000 from Vickers. At a settlement conference, Vickers was willing to pay $150,000 USD but OTAL wanted $210,000 USD. There was no agreement. Vickers solicitor sent an offer of 150,000 pounds, which was around $210,000. OTAL accepted. The solicitor said it was a mistake.
what was the question in OTAL v Vickers
was the offer for 150,000 pounds as it appeared, or $150,000 as intended
what was the result of OTAL v Vickers
Vickers had to pay the 150,000 pounds because there was an agreement to settle at that amount. if Vickers could show OTAL knew or ought to know that there had been a mistake then Vickers would not be bound
what were the facts towards it being a mistake in OTAL v Vickers
previously dealing in USD, offer was higher
what were the facts towards it not being a mistake in OTAL v Vickers
the offer was about $210,000 which is what OTAL wanted and OTAL may have thought they changed their mind and agreed with the offer
what was the result of OTAL v Vickers
OTAL weren’t to reasonably have known that it was a mistake and Vickers were bound by the contract
where it is CLEAR there has been a mistake ____
the offer is not binding
what does subjective mean
actual intention
what does objective mean
the appearance of a persons conduct, as it would appear to a reasonable person
what was the telegraph conversation in Harvey v Facey
“Will you sell us Bumper Hall Pen? Telegraph lowest cash price”
“Lowest price for Bumper Hall Pen 900 pounds”
“We agree to buy Bumper Hall Pen for the sum of 900 pounds asked by you”
did the PC decide “lowest price for Bumper Hall Pen 900 pounds” was an offer
they decided it wasn’t
a statement like ‘lowest price for Bumper Hall Pen 900 pounds” is also known as?
an invitation to treat (negotiate)
what does to treat me
to negotiate
what was the business model in Grainger v Gough
grainger showed customers a wine price list at his store in london and customers placed orders with him which he sent to a french wine merchant. the french merchant decided whether to accept the order and then dealt directly with the english client
what was the question in grainger v gough
was the french merchant carrying out business in england and therefore liable to pay tax
what did the House of Lords decide in grainger v gough
the showing of the price list was not the offer, the offer was made when the order was passed onto the merchant
generally, advertisements are not offers. what are they?
intentions to treat
what was the pharmaceutical companies issue with boots in pharmaceutical society of great britain v boots cash chemists 1952
boots had a self-serviced system and they weren’t convinced that certain drugs were being sold by a registered pharmacists as they were required to be
what was the question for the court in pharmaceutical society of great britain v boots cash chemists 1952
when does the sale actually take place in a self service shop
when did the pharmaceutical company claim the sale took place in a self service shop in pharmaceutical society of great britain v boots cash chemists 1952
when the person put the item in their basket (this was acceptance of the offer which was the item on the shelf with the price)
what did the court hold in pharmaceutical society of great britain v boots cash chemists 1952
because items can be put back and sales can be refused, items on the shelf are an invitation to treat
in payne v cave, mr cave bid 40 pounds for mr paynes thing. what did he do when the auctioneer paused to encourage further bids
he got annoyed and said he would no longer pay 40 pounds, withdrawing his offer
my payne sued mr cave in payne v cave. what was his argument
that making a bid at an auction is an acceptance of an offer, this acceptance is conditional on there being no higher bids but a contract is formed
what did the court hold in payne v cave
a bid is an offer, accepted at the fall of the hammer
what is the general rule made in payne v cave
you can revoke an offer any time prior to acceptance
in sommerville v rice, sommerville had sent an offer to rice. what did he do next
he changed his mind and sent a letter of revocation
what did rice do with the offer sommerville sent him in sommerville v rice
he attempted to accept it, only to receive the letter of revocation sent by sommerville later
what was the issue in sommerville v rice
whether the letter was an effective revocation since the letter had been sent but had not arrived
what did the court hold in sommerville v rice
revocation must be communicated to the other party to be effective, therefore the revocation was not effective and a contract was formed
how and when can a contract be terminated for a lapse of time
if the offer specifies when it will be terminated that will be effective. otherwise the offer will expire after a reasonable time
mr dunfoy owned land that mr keane wanted to purchase in kean v dunfoy. the land was 160 pounds and kean paid a 10 pound deposit. a written agreement signed by mr dunfoy was sent to mr kean requesting a further 50 pounds deposit. what was the issue with this?
mr kean gave the 50 pounds and the signed agreement to his solicitor who lost it, and only found it 12 months later
did mr kean still try to form the sale in kean v dunfoy after the 12 months
yes
what was the issue in kean v dunfoy
whether the offer was still valid after 12 months when the agreement was made
what did the court decide in kean v dunfoy
where the offer does not stipulate the time for acceptance, the offer will lapse after a ‘reasonable time.’ In this case, the offer had already lapsed
what was the question in dysart v nielson
has the offer terminated because of whats happened after the offer - the granting of leave to appeal to the SC
what did tipping j say about change of circumstances regarding offers in dysart v nielson
if the change in circumstances has fundamentally undermined the basis of the offer, then even if that is not in the contract explicitly the court can apply it
what was the result of dysart v nielson
the majority held there hadn’t been a fundamental change because both parties knew of the application for leave to appeal and knew it could be declined or approved at any moment
what is the general view about how the offer changes given death of the offeror
upon the death of an offeror, the offer will terminate when the offeree becomes aware of the offerors death. The estate of the offeror may be bound by the contract is the offeree accepts the offer before they know of the death
what is the general view about how the offer changes given death of the offeree
the offer will probably terminate immediately upon the death
what did Mr Hemechandra do that was sketchy in Robinson v Hemechandra
he signed the agreement for the sale of his land but the agreement was post-dated a few weeks ahead in 3 places
what was the question for the court in Robinson v Hemechandra
was Mr Hemechandra’s signing a valid acceptance of the offer
what did the court hold in Robinson v Hemechandra
that Mr Hemechandra’s signing was an acceptance. a reasonable person in the shoes of the offeror Robinson would consider that that was an acceptance of the offer.
how can there be an acceptance of an offer
the offer has to have content/terms/statements of what the offeror is willing to agree to and there has to be communication between the parties of what is being offered.
In agreement, they only have to indicate agreement because there are already terms so it is common to find acceptance by conduct e.g. handshakes
if an offeror makes an offer and the offeree starts performing the contract, can this be acceptance?
yes
what happened in Borgden v Metropolitan railway
Brogden supplied coal to Metropolitan railway. Their prices went up and so they filled out a form setting out the new terms which would need to be written up into a contractual document in those times and signed by both parties, which did not happen.
MR kept ordering coal and paid the new price. Later there were issues and one of the parties claimed there was no contract
what was the result of brogden v metropolitan railway
a contract had been formed and acceptance by metropolitan railway was to be found in their ordering and paying for of coal under the new agreement
what happened initially to cause argument in airways corp v geyserland
airways provided air traffic control and increased the price for its services. geyserland protested the new terms and prices and refused to pay the new price because it was excessive, but they continued to use airways services.
airways sued geyserland for the amount it has invoiced that geyserland had refused to pay.
what was the question for the court in airways corp v geyersland
did geyserland continuing to use airways services amount to acceptance of the higher price offer
what approaches did the judge in airways corp v geyserland consider, and what was the result
objective approach and whether the offeror knew or ought to have known
the court held there had been no acceptance because airways knew geyserland was not intending to accept because they have very strenously objected to the new prices. therefore airways knew, that geyserland, by using their services, was not accepting their terms
what strengthened the courts decision in airways corp v geyserland
airways was a monopoly, geyserland had to use their services. if there were more companies and they could have gone elsewhere but stayed with airways, airways would’ve just thought they changed their mind. here it was clear they were still disputing
what happened in lee v sayers
sayers sent a letter to lee, offering to grant a timber cutting license on particular terms.
lee entered into a partnership with another person and sent a letter to accept the offer with both names on it
what did the court decide in lee v sayers
it was not a valid acceptance because the offer was to mr lee not both of them
what can we take out of lee v sayers
an offer must be accepted by the person to whom it was addressed
what do we mean by unqualified assent
the essence of acceptance is unqualified assent to the terms of the offer
what happened in hyde v wrench
wrench offered to sell his farm to hyde for 1000 pounds and hyde offered to purchase the farm for 950 pounds.
wrench refused to sell for 950 so hyde attempted to accept the offer to sell for 1000 pounds.
wrench refused to go ahead with the agreement
was a counter offer made in hyde v wrench by hyde offering to purchase the farm for 950 pounds instead of 1000
yes and it was rejected
what was the question for the court in hyde v wrench
whether the original offer is still capable of being accepted after a counter offer
what did the court decide about counter offers in hyde v wrench
a counter offer is a final rejection of the offer
what does reporoa stores v treloar concern
there was a lease from treloar to reporoa from 21 sep 1951 - 21 sep 1954. there was a clause stating an option to purchase.
what were the terms of the option to purchase in reporoa stores v treloar
the lessee had to give 3 months notice in writing of its desire to purchase before sep 21 1953 and after these 3 months they shall pay the 1855 pounds and all rent accruing and they will get the property
what did reporoa do wrong in trying to exercise the option to purchase in reporoa stores v treloar
the settlement was listed to be on the wrong date - sep 21 1954 (not 3 months after the notice) and that they asked for further correspondence but the exercise is acceptance and forms a contract.
what was the result of reporoa stores v treloar
it was found to be a counter offer, because of the new settlement date
what are enquiries
one possible response to an offer is to make an enquiry or request further information regarding the terms of the offer
what was the result of stevenson v mclean
the middle communication (asking for a longer delivery time) was a mere enquiry to remake the offer on new terms, not a counter offer
what happened in powierza v daley
the purchaser made a written offer to the vendor, who changed some terms including increasing the deposit required.
the purchaser looked at the changes and asked whether they would accept the original deposit, but said they would probably pay 10k more.
what was the question for the court in powierza v daley
what was the effect of the purchaser asking if they’d take $20,000 - a counter-offer or an enquiry
what was the result of powierza v daley
on both cases (inc on appeal) it was found to be a enquiry rather than a rejection and new offer (counter-offer)
in Dysart Timbers Ltd v Nielson, Blanchard J says “it is open to someone who makes an offer to stipulate the circumstances __ __ __ ___ ____. If the offeror does not do so expressly, it may none the less be ___ ___ __ __ ___ ___ ____ ____ ___ ___ ___ ___ ___ ___ ___ ___”
in which it will lapse, apparent to an objective observer that the offer was made on the basis of the existence of certain circumstances
Blanchard J, in Dysart Timbers Ltd v Nielson, said “an offeree cannot reasonable expect to accept an offer if the __ __ __ __ __ __ has fundamentally changed”
basis on which it was made
what are 5 major factors for the existence of a contract
making an offer, acceptance, communication of acceptance, requirement of certainty, is it conditional on some event?
the more formal and structured the process for submitting and evaluating a tender, the more likely it is that?
a process contract will be found
when can an offer be revoked
any time before acceptance
revocation is ineffective if it isn’t?
communicated
a letter received on a normal working day should be treated as
communication, even if unopened
if an offer states it is open till a certain day, a later acceptance will be?
ineffective
can an offeree accept after notice of an offeror death?
no
death, until notified, does not prevent acceptance because the offer can be satisfied how?
out of the offeror’s estate
an offeree must ____ assent to the exact terms proposed by the offeror
unreservedly
if, while purporting to accept the offer as a whole, he introduces a new term which the offeror has not had the chance of examining, he is in fact doing what?
making a counter-offer
