Contract Law (PGDL) Exam With Complete Solutions 2024

What are the two main types of contract? - correct answer-Bilateral - A promise for a promise Unilateral - A promise in return for an act What are the main invitation to treat situations? - correct answer-- Advertisement - Self-service and shop windows - Auctions (with reserve) - Invitations to tender - Mere statements of price What is the postal rule? - correct answer-- Acceptance occurs when the letter is posted not when it is received - Also applies if the letter is never received (proof of postage) - Postal rule can be ousted in the offer - Only applies to acceptance not revocation Can the offeror stipulate the method of acceptance? - correct answer-- Yes, but they must CLEARLY STATE that only the stipulated method will be accepted. - Remember an equally expeditious method to that stipulated should be sufficient (Timm v Hoffman) The general rule is that acceptance has no effect until communicated. However, what are the other considerations? - correct answer-- Silence cannot amount to acceptance - Acceptance in unilateral contracts (no need to communicate. Performance) - Acceptance by conduct (may be inferred by conduct without being expressly communicated) Counter offer v Request for information - correct answer-Counter offer (Hyde v Wrench) - Destroys previous offer, rendering it incapable of acceptance - role of offeror and offeree swaps Request for information (Stevenson, Jacques and Co v McLean) - Does not attempt to vary the terms of offer - The previous offer remains open for acceptance Types of Termination - correct answer-- Rejection - Revocation (think about communication in bilateral and unilateral) - Lapse in time - Failure to comply with condition - Death of one of the parties (think about offeror v offeree) Acceptance must be... - correct answer-- In response to the offer - Unqualified - Communicated (think about third party communication) When is intention to create legal relations presumed? - correct answer-- In commercial agreement it is presumed that there is an intention - In a social/domestic agreement it is not presumed that there is an intention How can the presumption that the parties have an ICLR be rebutted? - correct answer-Wording that the parties do not intend to create legal relations that is clear and unambiguous What is consideration? - correct answer-The value given in return for a promise. Look out for the exchange. Issues with consideration when varying existing contract - correct answer-- Variation to pay more for an obligation in an existing contract between the parties (Promise to pay more). Standard rule is no consideration. - Variation to accept part payment of a debt under an existing contract (Promise to accept less). Standard rule is no consideration. Exceptions to the rule (promise to pay more) - correct answer-Hartley v Ponsonby - Is there extra? Is there something of value to enforce the extra payment? Then... Williams v Roffey - Must first identify no fresh consideration. - Is there a practical benefit? Exceptions to the rule (promise to accept less) - correct answer-Promissory estoppel - Equitable remedy (discretionary) - Can make a promise binding even without consideration Rules governing consideration - correct answer-- Must not be past - Must move from the promisee - Need not be adequate - Must be sufficient (real, tangible, valuable) Types of Consideration - correct answer-- Executed (promise to perform act in future) - Executory (usually a reward - performs an act to fulfil a promise) - Past (not enforceable Y) Those who do not have capacity to enter a contract? - correct answer-- Minors (remember there are 2 exceptions) - Due to lack of mental capacity