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
- 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
- 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
- is the expression by the offeror, by word, performance or conduct, of agreement to all the terms of the offer
- 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
- BUT presumption may be rebutted by evidence that parties do intent to create legal intention
- Presumption that parties do not intend to create legal relations
- 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
- But presumption can be rebutted by evidence
- Presumption that parties do intend to create legal relations
- Domestic/ Social agreements
- For an agreement to be a legally binding contract, both parties must intent to create legal relations
- 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
- Executory consideration.
- Benefit to one party (promisor) at the price of some detriment to the other party (promise)
- Past Considerartion
- X makes promise after performance
- Promise is unenforceable
- Re McArdle
- X makes promise after performance
- Consideration need to be adequate
- Consideration need not match the (real value of the promise for which it is given
- Chappel v Nestle
- Consideration need not match the (real value of the promise for which it is given
- Consideration must be sufficient
- Benefit and detriment
- Benefit and detriment
- Performance of an existing duty
- No valid for considereration
- Ward v Byham
- No valid for considereration
- Part payment of debt
- Payment of a lesser sum.. cannot be any satisfaction for the whole
- Pinnel's Case
- Payment of a lesser sum.. cannot be any satisfaction for the whole
- for an agreement to be a legally binding contract, the agreement must be supported by consideration
- Pre- contractual negotiations/ Invitation to treat
- an expression, by word or conduct, of willingness to negotiate
- non-binding – no effect
- Fisher v Bell
- an expression, by word or conduct, of willingness to negotiate
- 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
- where 1 party seeks clarification of terms of offer;- does not vary terms of offer;
- 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
- where offeror withdraws the offer before it has been accepted
- 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
- where offeree varies the terms of the original offer
- Rejection of Offer
- where offeree rejects the offer
- terminates the offer – which cannot then be accepted
- where offeree rejects the offer
- 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
- where offeror makes offer requiring performance by offeree, offeree not bound to perform, offeror bound by offer when performance by offeree complete
- acceptance must be communicated to and received by the offeror
- Offer
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