Topics =
Contract formation – agreement (i.e. offer and acceptance), consideration, intention to
create legal relations and agency.
Contract = You’re obliged to do something because you agreed to it.
Tort = An obligation not to commit a civil wrong.
What is needed for contract formation?
Agreement (offer and acceptance)
Intention to create legal relations:
Exchange needs to be formal (in writing)
Needs a serious subject matter
Reliance (how much reliance placed on parties by the agreement)
Terms need to be certain
Terms need to be completed
Relationship between parties (assumed no relation in domestic)
Expressed intention as to whether it was legally binding.
Consideration (exchange of value)
1) Agreement:
****** Offer = ‘an expression of willingness to contract on certain terms, made with the
intention that it shall become binding as soon as it accepted by the person to whom it was
addressed” ******
Willingness to contract = voluntarily willing to enter contract or it will be duress
Certain terms = needs to be an accurate figure
Intention it shall become binding = need to be happy they will become bound to contract.
Invitation to treat = make me an offer.
o Display of goods in a shop with a price attached is an invitation to treat:
Fisher v Bell (1961)
Price is an invitation to treat (make me an offer at the counter)
case to do with selling knives, don’t want to be selling knives to
everyone.
Termination of offer:
1) Revocation (offer cannot be revoked once accepted but can if not yet accepted)
a. Offer may be revoked by offeror at any time before acceptance.
i. Routledge v Grant (1828)
b. Unless something has been provided in return to keep that offer open. (not
binding unless supported by consideration(money))
i. Mountford v Scott (1975)
c. Revocation only takes effect when communicated to the offeree
, i. Byrne & Co v Van Tienhoven & Co
d. Communication of withdrawal of an offer by telex is effective when it could
be read, rather than when it is read.
i. ******The Brimnes (1975) ******
e. Communication of revocation foes not have to be by, or with the authority
of, the offeror.
i. ******Dickenson v Dodds (1876)******
1. Dodds promised to sell lamb for £800 and offer open till Friday
morning. Changed mind and sold lamb to someone else.
Dickenson posted letter to Dodds to accepting offer but Dodds
already sold. Confirmed offer can be revoked by a liable third
party without the offerors authority.
2) Rejection (offers terminated through rejection)
a. Implied rejection through counter-offer
i. ******Hyde v Wrench (1840)******
1. Confirms counter-offers will terminate the original offer
3) Lapse
a. Offer may lapse after a specific period or on the occurrence of a specified
condition
i. ******Ramsgate Victoria Hotel Ltd v Montefiore (1865)******
1. Offer made in June to purchase shares, shares allotted in
November, there was a lapse of time so no offer
b. If no conditions set, offer will lapse after a reasonable time.
2 Types of Contract:
1) Unilateral = a promise (offer) in return for an act (acceptance)
a. one party bound
b. promisor bound to perform
c. other party doesn’t need to perform
d. if the word ‘if’ shows up it is probably unilateral ‘if you do this… I will pay
you this…’
i. ******Carlill v Carbolic Smoke Ball Co (1893)******
1. Smoke Ball Company advertised reward of £100 for anyone
who used smoke ball and got the flu, they said they had £1000
deposited in a bank. Carlill did what they said and got the flu
but Company refused to pay.
2. They were bound as it is a unilateral offer, they have to pay.
2) Bilateral = an exchange of promises between two parties which are immediately
binding.
Contract formation – agreement (i.e. offer and acceptance), consideration, intention to
create legal relations and agency.
Contract = You’re obliged to do something because you agreed to it.
Tort = An obligation not to commit a civil wrong.
What is needed for contract formation?
Agreement (offer and acceptance)
Intention to create legal relations:
Exchange needs to be formal (in writing)
Needs a serious subject matter
Reliance (how much reliance placed on parties by the agreement)
Terms need to be certain
Terms need to be completed
Relationship between parties (assumed no relation in domestic)
Expressed intention as to whether it was legally binding.
Consideration (exchange of value)
1) Agreement:
****** Offer = ‘an expression of willingness to contract on certain terms, made with the
intention that it shall become binding as soon as it accepted by the person to whom it was
addressed” ******
Willingness to contract = voluntarily willing to enter contract or it will be duress
Certain terms = needs to be an accurate figure
Intention it shall become binding = need to be happy they will become bound to contract.
Invitation to treat = make me an offer.
o Display of goods in a shop with a price attached is an invitation to treat:
Fisher v Bell (1961)
Price is an invitation to treat (make me an offer at the counter)
case to do with selling knives, don’t want to be selling knives to
everyone.
Termination of offer:
1) Revocation (offer cannot be revoked once accepted but can if not yet accepted)
a. Offer may be revoked by offeror at any time before acceptance.
i. Routledge v Grant (1828)
b. Unless something has been provided in return to keep that offer open. (not
binding unless supported by consideration(money))
i. Mountford v Scott (1975)
c. Revocation only takes effect when communicated to the offeree
, i. Byrne & Co v Van Tienhoven & Co
d. Communication of withdrawal of an offer by telex is effective when it could
be read, rather than when it is read.
i. ******The Brimnes (1975) ******
e. Communication of revocation foes not have to be by, or with the authority
of, the offeror.
i. ******Dickenson v Dodds (1876)******
1. Dodds promised to sell lamb for £800 and offer open till Friday
morning. Changed mind and sold lamb to someone else.
Dickenson posted letter to Dodds to accepting offer but Dodds
already sold. Confirmed offer can be revoked by a liable third
party without the offerors authority.
2) Rejection (offers terminated through rejection)
a. Implied rejection through counter-offer
i. ******Hyde v Wrench (1840)******
1. Confirms counter-offers will terminate the original offer
3) Lapse
a. Offer may lapse after a specific period or on the occurrence of a specified
condition
i. ******Ramsgate Victoria Hotel Ltd v Montefiore (1865)******
1. Offer made in June to purchase shares, shares allotted in
November, there was a lapse of time so no offer
b. If no conditions set, offer will lapse after a reasonable time.
2 Types of Contract:
1) Unilateral = a promise (offer) in return for an act (acceptance)
a. one party bound
b. promisor bound to perform
c. other party doesn’t need to perform
d. if the word ‘if’ shows up it is probably unilateral ‘if you do this… I will pay
you this…’
i. ******Carlill v Carbolic Smoke Ball Co (1893)******
1. Smoke Ball Company advertised reward of £100 for anyone
who used smoke ball and got the flu, they said they had £1000
deposited in a bank. Carlill did what they said and got the flu
but Company refused to pay.
2. They were bound as it is a unilateral offer, they have to pay.
2) Bilateral = an exchange of promises between two parties which are immediately
binding.
