Law Of Contract

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  • Created by: Amy
  • Created on: 12-03-14 13:19


  • Suggestion put by one person/s to another person/s
  • Seen as valid if it is intended as an offer
  • Person making the offer - Offeror
  • Person recieving the offer - Offeree
  • Invitation to treat is only inviting you to make an offer not an offer
  • 3 situations where this always is the case: Shop window or shelf, Advert, Auction
  • Terms of offer must be certain and defined
  • Can be communicated by any methof eg writting & must be communicated before its effective
  • Made to one person, a group or the world
  • May have a time limit - if not its open for a reasonable time
  • Postal Rule - communicated when it arrvies
  • Offeror can withdraw the offer before it is accepted - revocation
  • Ceases when it is rejected, or if there is a counteroffer
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  • Agreement to an offer
  • Must agree to all the terms of the offer - otherwise its a counteroffer and not an acceptance
  • Asking for more information is not an acceptance
  • Acceptance must be from the person who the offer was intended to or their adgent (offer can be made to a person, a group or the world)
  • Offeror may set out a specific way of acceptance and only that acceptance will do
  • Normal rule is that acceptance must be communicated to the offeror
  • Silence is not communication
  • Postal acceptances are assumed to have been made at moment it is posted so if it gets lost in the mail it is still counted as an acceptance
  • Modern methods eg email, fax or texting - acceptance communicated when it arrives
  • If communicated to a business and the acceptance is sent out of office hours, communicated at the start of the next working day
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Intention to Create Legal Relations

  • Not all acreements are enforceable unless there is an intention to create legal relations
  • Courts have different rules for social/ domestic agreements and for business/ commerical agreements

Business Agreements

  • Courts start with the presumption that the agreement is legally binding, unless evidence to the contrary
  • If 1 party can show there was no means to be the situation, courts may decide its not binding
  • Also held that using the words 'binding in honor only' means the agreement is not intended to be legally binding

Social Agreements

  • between family memebers the courts start with asumption no intention to be legally binding
  • if 1 party can show that is was meant to be leaglly binding then the courts will accpet that and there will be a valid contract
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  • What the parties put into the contract - contribution to the bargain, must contribute something
  • Money, good,s performing service and stopping doing something
  • Nature of consideration - has to be real and have some value however it need not match the value put  in by the other person - if they are agreed on the matter its a contract
  • Consideration must be real and tangible not just to stop moaning
  • Past consideration - the thing you are offering to put into the contract has alread occured then it cannot be good consideration - only exception is if one party has asked the other to act and later promises to pay this may be good consideration 
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