Contract Law

Front 1

What is an offer?

Back 1

A proposition or suggestion made by one person or persons to another person or persons.

Front 2

The court will only recognise an offer as valid if what?

Back 2

It was clearly intended as an offer.

Front 3

What 3 things must an offer be?

Back 3

• Clear.

• Certain.

• Communicated.

Front 4

What is an invitation to treat?

Back 4

Inviting offers to be made.

Front 5

Give an example of situations that are always ITTs?

Back 5

• Articles displayed in shop windows - Fisher v Bell.

• Magazine adverts - Partridge v Crittenden.

• Auctions - Payne v Cave.

• Response to request for further information - Harvey v Facey.

• Uncertain words - Gibson v Manchester City Council.

Front 6

What are unilateral offers?

Back 6

Offers open to everyone.

Front 7

How are unilateral offers accepted?

Back 7

By performing the task - Carlill v Carbolic Smoke Ball.

Front 8

Outline the 5 ways in which an offer can come to an end?

Back 8

• Lapse of time - Ramsgate Victoria Hotel v Montefiore.

• Revocation (effective upon actual notice) - Byrne v Van Tienhover.

• Rejection - Stevenson v McClean.

• Counter offer - Hyde v Wrench.

• Death.

Front 9

After offer has emerged from negotiations, who does the decision lie with to accept the offer?

Back 9

The offeree.

Front 10

How can acceptance be signified?

Back 10

By writing, orally or by conduct.

Front 11

What 3 things does the acceptance have to be?

Back 11

• Final.

• Unqualified.

• Unconditional.

Front 12

What rule states that the acceptance must precisely match the terms of the offer?

Back 12

The Mirror Image Rule - Jones v Daniel.

Front 13

What case demonstrates that method of acceptance is no relevance unless explicitly stated?

Back 13

Eliason v Henshaw.

Front 14

What did the case of Felthouse v Bindley demonstrate?

Back 14

That silence is not a valid method of acceptance.

Front 15

What is the postal rule?

Back 15

Acceptance is deemed communicated as soon as it is posted - Adams v Lindsell.

Front 16

How can the postal rule be void?

Back 16

By the offeror stating he must receive actual notice.

Front 17

The postal rule does not apply to what forms of communication?

Back 17

Instantaneous - eg. Telephone, fax and email.

Front 18

What case demonstrates that communication by telex takes place when acceptance is clearly received?

Back 18

Entores v Miles Far East Corporation.

Front 19

When will acceptance to business be communicated if it arrives outside office hours?

Back 19

At the start of the next working day.

Front 20

For a contract to be legally binding what needs to be present?

Back 20

Intention to create legal relations.

Front 21

What is the presumption regarding ICLR in commercial agreements?

Back 21

• ICLR is present unless evidence to the contrary - McGowan v Radio Buxton.

Front 22

What does subject to contract mean?

Back 22

If you want to make an arrangement but don't want to be legally bound by it. - Chillingworth v Eshe.

Front 23

What is an honour clause?

Back 23

An express statement in a contract that is intended to be "binding in honour only" - Rose

and Frank Co. v Compton.

Front 24

What are subject to contact and honour clauses?

Back 24

They are rebuttals to the presumption for commercial agreements.

Front 25

What is the presumption for social/domestic agreements?

Back 25

ICLR is not present - Balfour v Balfour.

Front 26

What is the case that provides a rebuttal against the presumption for social agreements?

Back 26

Merritt v Merritt and Simpkins v Pays.

Front 27

What is consideration?

Back 27

What the parties put into the contract - there must be mutual benefit and loss.

Front 28

What 3 things must consideration be?

Back 28

• Certain.

• Tangible.

• Value.

Front 29

What case shows that the value of consideration can be minimal?

Back 29

Chappell and Co. v Nestle.

Front 30

What does White v Bluett show?

Back 30

A promise not to do something is not good consideration.

Front 31

What does Ward v Bytham show?

Back 31

A promise to do something can be good consideration.

Front 32

Consideration must be present or future and not in the past.

Back 32

ReMcArdle.

Front 33

Case demonstrating exception to past consideration rule?

Back 33

Lampleigh v Braithwaite - court can enforce promise that has just been done.

Front 34

Consideration must move from the promisee?

Back 34

Tweddle v Atkinson.

Front 35

What was this rule altered by?

Back 35

The Contracts (Rights of Third Parties) Act 1999.

Front 36

What does this act state?

Back 36

A person who is named or benefits can enforce the contract.

Front 37

What two ways can a breach of contract occur?

Back 37

Actual and anticipatory breach.

Front 38

What is actual breach?

Back 38

When breach has actually occurred.

Front 39

What 2 things can actual breach be?

Back 39

• Non performance - failed to perform obligations - Pilbrow v Pearless de Rougemont.

• Improper performance - failed to perform to required standard - Bunge v Tradax.

Front 40

Actual breach can be a breach of condition. What is this?

Back 40

If breach of condition occurs, renders contract meaningless - wronged party can repudiate and seek damages.

• Pousard v Spiers and Pond.

Front 41

Actual breach can also be a breach of warranty. What is this?

Back 41

A breach of warranty only minor point of contract and entitles wronged party to seek damages.

• Bettini v Gye.

Front 42

What is anticipatory breach?

Back 42

When party notified breach is going to occur. Wronged party can take legal action straight away or wait for actual breach.

• Hochester v De La Tour.

Front 43

Alternative dispute resolution (ADR) has the aim of what?

Back 43

To resolve disputes without going to court which is costly in time and money.

Front 44

What are the 4 methods of ADR?

Back 44

• Negotiation - parties deal directly with each other.

• Mediation - neutral 3rd party acts as messenger and consults to seek common ground.

• Concilliation - neutral 3rd party plays active role in suggesting solution.

• Arbitration - voluntary submission by disputing parties to judgment of person other than judge - third party makes binding award.

Front 45

If ADR fails they turn to the courts. The choice of court depends on what?

Back 45

The amount being claimed and the complexity of the case.

Front 46

If claiming up to £5000 what court do they use?

Back 46

The County Court.

Front 47

If they are claiming between £5000 and £25000 what court do they choose?

Back 47

The County Court.

Front 48

If they are claiming £25000+ what court do they go to?

Back 48

The High Court.

Front 49

Once you have decided on an appropriate court, what 3 stages do you have to complete to start a court case?

Back 49

• Complete 3 N1 claim forms; one for you, the defendant and the court.

• Take the form to the court office.

• Pay court fee - how much depends on size of claim.

Front 50

What 3 options do you have when defending a claim?

Back 50

• Admit liability and pay full amount.

• Dispute claim - acknowledgement of service (N9 form).

• Do nothing.

Front 51

How long do you have to respond to the acknowledgement of service?

Back 51

14 days for AoS (N9) and defence OR 14 days for AoS (N9) and a further 14 days for defence.

Front 52

What are the three tracks when starting a court case?

Back 52

• Small claims - private, judge is flexible, self representation encouraged.

• Fast track - strict timetable, heard in 30 weeks, max. 1 day.

• Multi track - cases £25000 or complex - circuit judge/high court judge.

Front 53

What is the aim of damages?

Back 53

To put the claimant in the position he would have been if the contract hadn't been performed properly.

Front 54

What loss can you claim for?

Back 54

• Cost of doing preparation work - Anglia TV v Reed.

• Loss of profits - Victoria Laundry v Newman Industries.

Front 55

What does the case of Stansbie v Troman demonstrate?

Back 55

It has to be established as a question of fact that the breach of contract was the main cause of loss?

Front 56

What will the law not allow in regard to claiming damages?

Back 56

The law will not allow a claim for loss which is considered too remote a consequence of the breach.

Front 57

What is reasonable contemplation?

Back 57

Courts must be satisfied that both parties aware that loss would result in event of breach - Victoria Laundry v Newman Industries.

Front 58

When is loss deemed as indirect?

Back 58

• If loss is too remote from the breach of contract.

• If defendant not in knowledge of loss occurring as a result of breach, loss is indirect.

Front 59

Where there has been breach of contract, what must wronged party do?

Back 59

Mitigate his loss.

Front 60

How can the defendant mitigate his loss?

Back 60

By finding an alternative source - loss is then extra expenses together with loss of profit whilst searching.

Front 61

What does the case of British Westinghouse v Underground Electric Railways demonstrate?

Back 61

If better alternative found, the money saved paid for the difference - the claimant was in a better position.