❤️
REVISION:
FORMATION OF A CONTRACT
an expression of willingness to contract made with the intention (actual or apparent)
offer that it shall become binding on the person making it as soon as it is accepted by the
person to whom it is addressed.
what turns a specific and comprehensive offer, made with the intention to be bound,
into an agreement. Acceptance is a final and unqualified expression of assent to the
acceptance terms of an offer. It must (apart from a couple of notable exceptions) be communicated
to the offeror. The agreement must be certain, the terms of the acceptance must exactly
match the terms of the offer, and the acceptance must be communicated to the offeror.
The element of value in a contract which supports the agreement between the
parties.The most common definition can be found in the case of Currie v. Misa [1875]
consideration LR 1 App Cas 554 - "some right, interest, profit or benefit accruing to one party or
some forbearance, detriment, loss or responsibility given, suffered or undertaken by
the other." It is the 'price' paid for the promise.
where no such intention can be found to exist between the parties, there is no contract.
intention to create
The parties must have intend to enter into a legally binding and enforceable
legal relations
agreement, under which all rights and liabilities can be legally enforced.
Freedom to Contract
REVISION: 1
, Contracting parties should be free to agree to whatever agreement they
wish; and people should be free to decide to enter into contracts with
whoever they please and should not be compelled to enter contractual
relationships.
OFFER
💡 Definition of an Offer:
An offer is an expression of willingness to contract made with the intention
(actual or apparent) that it shall become binding on the person making it as
soon as it is accepted by the person to whom it is addressed.
DEFINITION:
As per Tretiel, he defines an offer as:
"an expression of willingness to contract on certain terms, made with the
intention that it shall become binding as soon as it is accepted b the
person to whom it is addressed", the "offeree".
In other words - an offer is a statement of terms of a contract to which the offeror is bound to.
MAKING AN OFFER
“[A]greement…is not a mental state but an act, and, as an act, is a matter
of inference from conduct. The parties are to be judged not by what is in
their minds, but by what they have said, written or done....In the common
law, therefore, to speak of “the outcome of consenting minds” or, even
REVISION: 2
, more mystically, of consensus ad idem is to mislead….The function of an
English judge is not to seek and satisfy some elusive mental element but to
ensure, as far as practical experience permits, that the reasonable
expectations of honest men are not disappointed.”
Michael Furmston, Cheshire, Fifoot and Furmston's Law of Contract (15th edn OUP 2007)
38
Communication
An offer must be communicated and there is no validity until the offer is
communicated to the offeree to accept or reject
Taylor v Laird [1856] 25 LJ Ex 329.
It is often the court’s role to establish the intention of the parties and Contract law principles
have evolved to govern how the court deciphers those intentions:
through analysis of some outward indications(s) of agreement such as the words or
actions used rather than what the party’s argue was in their minds at the time
CONSENSUS AD IDEM^^
In English Contract law, this method is called the objective approach or the objective test.
THE OBJECTIVE TEST/APPROACH:
When the courts adopt an objective position to look at all external factors from the position
of the reasonable person. The court does not want to look into what a person thinks
(subjective viewpoint) but rather what they said or did.
In contracts you do not look into the actual intent in a man’s mind. You
look at what he said and did. A contract is formed when there is, to all
outward appearances, a contract. A man cannot get out of a contract
by saying: ‘I did not intend to contract’, if by his words he has done so.
REVISION: 3
, Storer v Manchester City Council* [1974] 1 WLR 1403, 1408 per Lord Denning
[W]hen seeking to ascertain the parties' intention under the terms of a
contract which both accept has been made…the question is ‘what did
the parties intend by the words used in the agreement which they
made’.
Crest Nicholson Ltd v. Akaria Investments Ltd [2010] EWCA Civ 1331, 25 per Sir
John Chadwick
THE SUBJECTIVE TEST/APPROACH:
arguments by judges (notably Lord Denning) that the objective approach is not the most
desirable approach
In many cases our traditional analysis of offer, counter offer, rejection,
acceptance and so forth is out of date ... the better way to look at all the
documents passing between the parties - and glean from them or from
the conduct of the parties whether they have reached an agreement on
all material points...
Butler Machine Tool Co Ltd v Ex- Cell-o Corporation (England) Ltd* [1979] 1 WLR
401 , 404 per Denning MR
In Butler Machine Tool Co Ltd v Ex- Cell-o Corporation (England) Ltd [1979] 1 WLR 401
Denning MR said:
In many cases our traditional analysis of offer, counter offer, rejection,
acceptance and so forth is out of date ... the better way to look at all
the documents passing between the parties - and glean from them or
from the conduct of the parties whether they have reached an
agreement on all material points...
REVISION: 4
