Formation of Contact

  • Created by: luiza sz
  • Created on: 17-04-19 17:05
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  • Formation of Contract
    • Offer
      • An expression by the offerer, by word or conduct, of willingness to be bound by the terms of the offer, as soon as the offer is accepted by the offeree
        • Binding at the moment of acceptance
      • Carlill v Carbolic Smoke Ball
    • Acceptance
      • is the expression by the offeror, by word, performance or conduct, of agreement to all the terms of the offer
        • converts the offer and acceptance to an agreement, which is legally binding
      • Carlill v Carbolic Smoke Ball
    • Legal Intentions
      • For an agreement to be a legally binding contract, both parties must intent to create legal relations
        • Domestic/ Social agreements
          • Presumption that parties do not intend to create legal relations
            • BUT presumption may be rebutted by evidence that parties do intent to create legal intention
              • Merritt v Merritt
            • Balfour v Balfour
        • Commercial agreements (for commercial purpose)
          • Presumption that parties do intend to create legal relations
            • But presumption can be rebutted by evidence
              • Rose and Frank
            • Esso
    • Consideration
      • for an agreement to be a legally binding contract, the agreement must be supported by consideration
        • Benefit to one party (promisor) at the price of some detriment to the other party (promise)
          • Executory consideration.
            • X makes promise in return for promise by Y, promises to be performed at a future time, promises binding at moment made
          • Executed consideretion
            • X makes promise in return in return for performance by y, X's promise binding only if Y performs, Y not bound to  perform
      • Past Considerartion
        • X makes promise after performance
          • Promise is unenforceable
        • Re McArdle
      • Consideration need to be adequate
        • Consideration need not match the (real value of the promise for which it is given
          • Chappel v Nestle
      • Consideration must be sufficient
        • Benefit and detriment
      • Performance of an existing duty
        • No valid for considereration
          • Ward v Byham
      • Part payment of debt
        • Payment of a lesser sum.. cannot be any satisfaction for the whole
          • Pinnel's Case
    • Pre- contractual negotiations/ Invitation to treat
      • an expression, by word or conduct, of willingness to negotiate
        • non-binding – no effect
      • Fisher v Bell
    • Request for information
      • where 1 party seeks clarification of terms of offer;- does not vary terms of offer;
        • - no effect – offer remains valid
      • Stevenson v McLean
    • Revocation of Offer
      • where offeror withdraws the offer before it has been accepted
        • terminates the offer which cannot be accepted provided offeree aware of revocation;
      • Dickenson v Dodds
    • Counter- Offer
      • where offeree varies the terms of the original offer
        • terminates and replaces the original offer – which cannot then be accepted
      • Hyde v Wrench
    • Rejection of Offer
      • where offeree rejects the offer
        • terminates the offer – which cannot then be accepted
    • Lapse of time
      • Offer will be terminated by expiry of specifies period of acceptance or expiry of reasonable time
      • Ramsgate Victoria Hotel v Montefiore
    • Communication of   Acceptance
      • acceptance must be communicated to and received by the offeror
        • Offeror may prescribe mode of acceptance, offeree may accept by any other method (provided no less advance taaeous to offeror)
      • Postal Rule
        • exception to general rule Offeror can exclude postal rule
        • Adams v Lindsell
      • offeror to make method of communication manditory,offeror must expressly state in offer
      • Where no method of acceptance prescribed, offeree must use any reasonable method
      • Acceptance of unilateral offer
        • where offeror makes offer requiring performance by offeree, offeree not bound to perform, offeror bound by offer when performance by offeree complete
          • Carlill v Carbolic Smoke Ball
          • Offeror cannot revoke offer after offeree has started to perform
            • Errington v Errington

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