Formation of Contract - Key Cases and Principles

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Harvey v Facey
Harvey asks Facey if he can buy his property for the lowest price. Facey said that the lowest he would take is £900. Harvey asks for the deed. Was there a contract? No because Facey did not send an offer so acceptance was not possible.
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Gibson v Manchester City Council
Council's language say "may be prepared" and not "will be prepared" to sell house so there was no clear intention.
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Patridge v Crittenden
Said that birds are 25s each. This was an invitation to treat and there was no intention to be bound by their advertisement.
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Carlil v Carbolic Smokeball Co
Claimed that influenza could be prevented by the smoke ball. Offered £100 to anyone that got sick. They deposited £1000 in the bank which showed intention to be bound.
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Pharmaceutical Society v Boots
Is the display of goods an offer? No it is not an offer, it is an invitation to treat. Sale is completed at the till.
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Thornton v Shoe Lane Parking
Car park machine had terms printed on the ticket. However, the terms were invalid because the contract was formed when the money was put in. Principle: vending machines make contracts at the point of putting in money.
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Harris v Nickerson
Claimant saw an advertisement for an auction. The products he wanted were taken away from the auction. There was no contract but an invitation to treat. Principle: auctions are invitations to treat
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Spencer v Harding
There was a call for tenders. Spencer submitted within the time frame and it was 'better' than the highest bid. With tenders, there is no obligation to take the highest offer.
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Blackpool Aero Club v Blackpool City Council
D called for tenders and C submitted their tender but due to the negligence of D's employee it wasn't seen. There was a contract for every applicant within the right time to be considered but not chosen.
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Hyde v Wrench
D offered to sell C his farm for £1000. C sends a counter-offer of £950. D rejects and C says they will pay £1000. Acceptance was not valid as counter-offer cancels original offer.
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Butler Machine Tool Co v Ex-Cell Corp
Both parties had standard terms. Whose terms would apply? Whoever sent the final offer is the one whose
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Brogden v Metropolitan Railway
C had been dealing with D informally for years, they created a contract. There was no communication of contract but performance of contract constituted acceptance.
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Felthouse v Bindley
Nephew was buying horse from uncle and said "if I don't hear from you, I'll consider it mine". He didn't hear from his uncle but the contract was not valid because silence is not valid acceptance.
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Tinn v Hoffman
Both parties sent each other the same offer but it was not valid acceptance because two identical cross-offers do not constitute acceptance.
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Gibbons v Proctor
Gibbons gave information to the police unaware that there was a reward? Could he claim the reward from the unilateral offer without knowledge? Yes, he had fulfilled the requirements.
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R v Clarke (Australia)
Could not claim the reward for information in murder case as he had not acted in reliance of the offer when giving the information.
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Brinkibon Brinkibon Ltd v Stahag Stahl
B2B contract but in different countries, was the contract formed when the acceptance was sent or when it was received? Court held that postal rule does not apply to instantaneous methods
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Adams v Lindsell
Acceptance was sent by post and the court held that acceptance was at the time of postage so that's when the contract was formed
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Entores v Miles Far East Corp
Postal rule doesn't apply to Telex (instantaneous method.
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Henthorn v Fraser
Acceptance was sent and the offeree decided to revoke the acceptance but the contract was already formed when they sent the letter by post so the revocation was not valid. Postal rule does not apply to withdrawal.
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Errington v Errington
Father promised his son that if he finished paying off the mortgage of the house, the son could have the house. The father's wife tried to remove the son before he could complete the promise. The father's wife could not remove the son.
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Luxor v Cooper
Commission was payable to an agent on completion of the sale of cinemas. The agent found buyers for the cinema but was not paid. Offer could be revoked because it was unilateral.
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Thomas v Thomas
Does consideration have to be of equal value? No, it only needs to be sufficient.
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Shadwell v Shadwell
Was uncle's promise to pay 150l to his niece supported by consideration? Yes, an existing duty can be consideration so long as it is for benefit of a third party.
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Stilk v Myrick
Performing an existing duty is not good consideration
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William v Roffey Bros
If there is no economic duress or fraud involved, consideration can be provided for the promise to pay more for an existing duty if the promisor obtains a practical benefit for paying more. In this case, avoiding a penalty clause was a benefit.
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Foakes v Beer
Part-payment of a debt is not good consideration
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Balfour v Balfour
A social and domestic agreement, which this was, cannot be enforced by the courts as the parties did not intend to be legally bound
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Jones v Padavatton
The agreement was purely a domestic agreement which raises a presumption that the parties do not intend to be legally bound by the agreement. If there itnention for it to be legally binding, there must be express manifestation of this intention.
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Merritt v Merritt
This is different to the case of Balfour v Balfour because the parties were separated. Where spouses have separated, it is generally considered that they do intend to be bound by their agreements.
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Ford Motor Co ltd v Amalgamated Union of Engineering
Collective agreements are not legally binding
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Kleinwort Benson v Malaysia Mining
The comfort letter had no legal effect. The fact that MMC BHD had refused to act as guarantor demonstrated they did not intend to be legally bound. The comfort letter referred to company policy at that time.
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British Steel v Cleveland Bridge and Engineering
No contract due to uncertainty but there can be recovery of reasonable value in some circumstances for performance requested and received.
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RST v Muller
There had been performance on both sides, it was possible to conclude that the parties were proceeding with a contract on the basis of all the essential terms that they had agreed.
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Other cards in this set

Card 2

Front

Council's language say "may be prepared" and not "will be prepared" to sell house so there was no clear intention.

Back

Gibson v Manchester City Council

Card 3

Front

Said that birds are 25s each. This was an invitation to treat and there was no intention to be bound by their advertisement.

Back

Preview of the back of card 3

Card 4

Front

Claimed that influenza could be prevented by the smoke ball. Offered £100 to anyone that got sick. They deposited £1000 in the bank which showed intention to be bound.

Back

Preview of the back of card 4

Card 5

Front

Is the display of goods an offer? No it is not an offer, it is an invitation to treat. Sale is completed at the till.

Back

Preview of the back of card 5
View more cards

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