Contract Law Revision Notes:
CONTRACT FORMATION:......................................................................................................................................................... 1
REQUIREMENTS OF A BINDING CONTRACT:...............................................................................................................................................1
AGREEMENT OFFER AND ACCEPTANCE:.................................................................................................................................................. 1
CONSIDERATION:................................................................................................................................................................................ 3
VARIATION OF A CONTRACT:................................................................................................................................................................. 3
DURESS:............................................................................................................................................................................................ 3
UNDUE INFLUENCE:............................................................................................................................................................................. 4
TERMS OF A CONTRACT:.......................................................................................................................................................... 4
EXPRESS TERMS:................................................................................................................................................................................. 4
INCORPORATION OF EXPRESS TERMS:......................................................................................................................................................4
IMPLIED TERMS:..................................................................................................................................................................................5
BREACH OF CONTRACT CLAIMS:............................................................................................................................................................. 5
MISREPRESENTATION:............................................................................................................................................................. 6
ELEMENTS:........................................................................................................................................................................................ 6
CATEGORIES OF MISREPRESENTATION:.....................................................................................................................................................7
MISTAKE:................................................................................................................................................................................. 7
ILLEGALITY:.............................................................................................................................................................................. 8
PRIVITY OF CONTRACT:............................................................................................................................................................ 8
METHODS OF DISCHARGING A CONTRACT:.............................................................................................................................. 9
1) EXPIRY:......................................................................................................................................................................................... 9
2) PERFORMANCE:.............................................................................................................................................................................. 9
3) AGREEMENT:................................................................................................................................................................................. 9
4) BREACH:....................................................................................................................................................................................... 9
5) FRUSTRATION:..............................................................................................................................................................................10
REMEDIES:............................................................................................................................................................................. 10
DAMAGES:...................................................................................................................................................................................... 10
REMEDIES UNDER THE CONSUMER RIGHTS ACT 2015:............................................................................................................................12
ALTERNATIVE, EQUITABLE REMEDIES:....................................................................................................................................................12
OTHER REMEDIES:............................................................................................................................................................................. 13
CONTRACT FORMATION:
Requirements of a binding contract:
3 things required:
- Offer and acceptance
- Intention to create legal relations
- Consideration
Offeror = person making offer
Offeree = person to whom offer is made
Courts take an objective approach to deciding if contract exists – not intention of parties but what
reasonable person would say intent of parties was given circumstances.
Agreement Offer and acceptance:
Bilateral v unilateral contracts:
- Bilateral most common, each party assumes obligations to the other e.g. sell item for
payment
- Unilateral no mutual promise, only party making offer assumes obligation, actual
1
, performance of act constitutes acceptance
Formation of a bilateral contract:
1. Is there an offer or is it a mere invitation to treat?
a. Offer = clear and certain & intention to be legally bound: “may be prepared to sell” v “if
you sign this agreement and return it”
b. Advertisements – generally ITT unilateral offer (prescribed act + intention to be bound)
c. Display of goods – ITT
d. Invitations to tender – ITT (unless agreed to accept h/l bid OR tenders solicited from
specified parties known to requesting party, deadline for submission + absolute
conditions for submission)
e. Auctions – generally ITT accepted on fall of hammer (except auctions without reserve)
2. If it is an offer, is there any counter-offer?
a. Counter-offer extinguishes original offer
b. Request for further info doesn’t terminate original offer – remains open
3. Is acceptance in response to the offer?
a. Offer can’t be accepted in ignorance of offer + can only be accepted by the person to
whom it was made (for offers made to world, everyone with notice = offeree)
4. Is acceptance a mirror image? (unqualified)
a. Acceptance must be to the offer made – unconditional – no changes
5. Is acceptance made using a valid mode?
a. If mode not prescribed then any mode can be used
b. If mode prescribed (clearly mandatory + excludes other options) then offeree must use
mandatory mode
i. If not clear then offeree can use any mode which is no less advantageous
6. Is acceptance communicated?
a. Has to be communicated, silence is not acceptance ever (even if offeror says) - 3 rd party
with authority can effectively communicate
b. Postal acceptance rule effective upon validly posting
i. Doesn’t apply where use of post not contemplated, manifestly
inconvenient/absurd, letters revoking offers, incorrectly addressed, or where
disapplied by offeror (they say they require receipt)
c. Instantaneous means contract created when acceptance received (reaches inbox).
If not received because of offeror fault contract exists, but if offeree fault then no
contract. If nobody fault then no contract. If sent outside office hours (context
dependent) then deemed received 1st thing next working day
7. At the point of acceptance, is the offer still open?
a. Offers can end through:
i. Rejection/counter-offer
ii. Lapse - if offeror indicates it can only be accepted in a particular time period OR
after “reasonable time”/on death of offeror [if offeree knows]
iii. Revocation - An offer can be revoked any time prior to acceptance. Effective upon
reaching offeree – any means [postal rule doesn’t apply]
iv. Unilateral offers: implied obligation on offeror to not prevent offeree from
completing the required act once started & revocation effective if reasonable
steps taken to bring evocation to attention of all those who may have read offer
Intention to create legal relations:
- 2 commercial parties (incl agreement between individuals and businesses/agreements between
individuals):
o Presumed THERE IS an intention to create legal relations – possible to rebut if parties can
show no intention (onus is on party wishing to show no intention)
- Social/domestic agreement (family, friends, spouses):
o No presumption of intention – possible to rebut – look at language used, spouses
separating, “will sell” or “will buy” – strong indicators of intention
- Use of phrase “subject to contract” = strong inference of NO INTENTION until formal contract
execution
2
CONTRACT FORMATION:......................................................................................................................................................... 1
REQUIREMENTS OF A BINDING CONTRACT:...............................................................................................................................................1
AGREEMENT OFFER AND ACCEPTANCE:.................................................................................................................................................. 1
CONSIDERATION:................................................................................................................................................................................ 3
VARIATION OF A CONTRACT:................................................................................................................................................................. 3
DURESS:............................................................................................................................................................................................ 3
UNDUE INFLUENCE:............................................................................................................................................................................. 4
TERMS OF A CONTRACT:.......................................................................................................................................................... 4
EXPRESS TERMS:................................................................................................................................................................................. 4
INCORPORATION OF EXPRESS TERMS:......................................................................................................................................................4
IMPLIED TERMS:..................................................................................................................................................................................5
BREACH OF CONTRACT CLAIMS:............................................................................................................................................................. 5
MISREPRESENTATION:............................................................................................................................................................. 6
ELEMENTS:........................................................................................................................................................................................ 6
CATEGORIES OF MISREPRESENTATION:.....................................................................................................................................................7
MISTAKE:................................................................................................................................................................................. 7
ILLEGALITY:.............................................................................................................................................................................. 8
PRIVITY OF CONTRACT:............................................................................................................................................................ 8
METHODS OF DISCHARGING A CONTRACT:.............................................................................................................................. 9
1) EXPIRY:......................................................................................................................................................................................... 9
2) PERFORMANCE:.............................................................................................................................................................................. 9
3) AGREEMENT:................................................................................................................................................................................. 9
4) BREACH:....................................................................................................................................................................................... 9
5) FRUSTRATION:..............................................................................................................................................................................10
REMEDIES:............................................................................................................................................................................. 10
DAMAGES:...................................................................................................................................................................................... 10
REMEDIES UNDER THE CONSUMER RIGHTS ACT 2015:............................................................................................................................12
ALTERNATIVE, EQUITABLE REMEDIES:....................................................................................................................................................12
OTHER REMEDIES:............................................................................................................................................................................. 13
CONTRACT FORMATION:
Requirements of a binding contract:
3 things required:
- Offer and acceptance
- Intention to create legal relations
- Consideration
Offeror = person making offer
Offeree = person to whom offer is made
Courts take an objective approach to deciding if contract exists – not intention of parties but what
reasonable person would say intent of parties was given circumstances.
Agreement Offer and acceptance:
Bilateral v unilateral contracts:
- Bilateral most common, each party assumes obligations to the other e.g. sell item for
payment
- Unilateral no mutual promise, only party making offer assumes obligation, actual
1
, performance of act constitutes acceptance
Formation of a bilateral contract:
1. Is there an offer or is it a mere invitation to treat?
a. Offer = clear and certain & intention to be legally bound: “may be prepared to sell” v “if
you sign this agreement and return it”
b. Advertisements – generally ITT unilateral offer (prescribed act + intention to be bound)
c. Display of goods – ITT
d. Invitations to tender – ITT (unless agreed to accept h/l bid OR tenders solicited from
specified parties known to requesting party, deadline for submission + absolute
conditions for submission)
e. Auctions – generally ITT accepted on fall of hammer (except auctions without reserve)
2. If it is an offer, is there any counter-offer?
a. Counter-offer extinguishes original offer
b. Request for further info doesn’t terminate original offer – remains open
3. Is acceptance in response to the offer?
a. Offer can’t be accepted in ignorance of offer + can only be accepted by the person to
whom it was made (for offers made to world, everyone with notice = offeree)
4. Is acceptance a mirror image? (unqualified)
a. Acceptance must be to the offer made – unconditional – no changes
5. Is acceptance made using a valid mode?
a. If mode not prescribed then any mode can be used
b. If mode prescribed (clearly mandatory + excludes other options) then offeree must use
mandatory mode
i. If not clear then offeree can use any mode which is no less advantageous
6. Is acceptance communicated?
a. Has to be communicated, silence is not acceptance ever (even if offeror says) - 3 rd party
with authority can effectively communicate
b. Postal acceptance rule effective upon validly posting
i. Doesn’t apply where use of post not contemplated, manifestly
inconvenient/absurd, letters revoking offers, incorrectly addressed, or where
disapplied by offeror (they say they require receipt)
c. Instantaneous means contract created when acceptance received (reaches inbox).
If not received because of offeror fault contract exists, but if offeree fault then no
contract. If nobody fault then no contract. If sent outside office hours (context
dependent) then deemed received 1st thing next working day
7. At the point of acceptance, is the offer still open?
a. Offers can end through:
i. Rejection/counter-offer
ii. Lapse - if offeror indicates it can only be accepted in a particular time period OR
after “reasonable time”/on death of offeror [if offeree knows]
iii. Revocation - An offer can be revoked any time prior to acceptance. Effective upon
reaching offeree – any means [postal rule doesn’t apply]
iv. Unilateral offers: implied obligation on offeror to not prevent offeree from
completing the required act once started & revocation effective if reasonable
steps taken to bring evocation to attention of all those who may have read offer
Intention to create legal relations:
- 2 commercial parties (incl agreement between individuals and businesses/agreements between
individuals):
o Presumed THERE IS an intention to create legal relations – possible to rebut if parties can
show no intention (onus is on party wishing to show no intention)
- Social/domestic agreement (family, friends, spouses):
o No presumption of intention – possible to rebut – look at language used, spouses
separating, “will sell” or “will buy” – strong indicators of intention
- Use of phrase “subject to contract” = strong inference of NO INTENTION until formal contract
execution
2
