Contract Law: Formation of a Contract

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  • Formation of a Contract
    • Types of Contract
      • Unilateral Contracts
        • A promise for an act.
        • Carlill v Carbolic Smoke Ball Co
          • The court decided that Carbolic Smoke Ball Co's 'offer' to award £1,000 to anyone who uses their product but still got the flu was a unilateral offer.
        • Where only one party assumes an obligation.
      • Bilateral Contracts
        • A promise for a promise.
        • Where all parties assume an obligation.
      • If an offer is made to the public at large, it is generally a unilateral offer.
    • Counter-Offers
      • Hyde v Wrench
        • A counter-offer means that the original offer cannot be revived.
        • You cannot revive dead offers.
      • Any addition to the original offer amounts to a counter-offer.
      • A counter-offer must be an OFFER.
    • Invitation to Treat
      • Not capable of being immediately accepted.
        • It will be an invitation to treat if it was not intended to be legally binding.
      • Like a preliminary stage.
      • Pharmaceutical Society of GB v Boots Cash Chemists.
        • Price marked goods are invitations to treat.
      • Fisher v Bell
        • The display of flick-knives in a shop is an invitation to treat, NOT an offer to sell.
      • Partridge v Crittenden
        • An advertisementof birds for sale is an invitation to treat for a bilateral contract because advertisementof specific goods at specific prices indicates the need for further negotiations.
    • The Offer
      • Has to be capable of being immediately accepted.
      • It will be an offer if it is intended to be binding.
      • Cannot be vague.
    • Revocation of an Offer
      • An offer can be revoked any time before acceptance takes place.
      • Revocation of the offer MUST be communi-cated.
      • There is no postal rule like with acceptance.
    • Acceptance
      • Communi-cation must be both communi-cated AND received in order for acceptance to have taken place.
      • When does acceptance occur?
        • Entores Ltd v Miles Far East Corp
          • A contract is formed when and where acceptance is RECEIVED.
      • The Postal Rule
        • With non-instantaneousmethods (like letters), it is difficult to decide when acceptance should occur.
        • Adams v Lindsell
          • Under the postal rule - acceptance occurs when and where it is sent.

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