This document relating to contract law will help you when it comes to your exams. Everything is split into sections and will help you master the course.
I made this for my in-person exam however you can also use it for online exams.
Nature of a contract
1. Agreement and formation of a valid contract
Contract was developed on the principle of laissez-faire economic
Contract = agreement enforceable by law
Contract needs an offer, acceptance, consideration + intention
→ BUT Lord Denning in Case Butler Machine: believes that a contract might exist
although it can’t easily be shown where the offer and corresponding acceptance lie.
2. Unilateral Contract
One-sided contracts. Come about as a result of reward + through advertisements
when an advertiser promised to pay members if they do something
Case: Carlill v Carbolic Smoke Ball - company advertised medical cure for influenza
and that £100 would be paid for anyone who contracts the epidemic. Ms Carlil
contracted influenza.
Rules derived from this case:
a) Adverts are ITT BUT if they request performance of an act (unilateral) it will be
an offer, once the act if performed - binding contract
b) For other contracts, acceptance must be communicated to the offeror but in
unilateral contracts, the offeror waives this.
3. Bilateral Contract
Requires both parties to perform an action e.g a promise to buy and sell
4. Collateral contract
Can be verbal or written and is secondary to the main contract but stands separate
Reasons for this contract: some terms need to be added, error in main contract, the
contracting parties are different
,Offer and Acceptance
An offer is a proposition put by the offeror to the offeree. An offer may be terminated before
acceptance. An ITT precedes an offer
1. Offer
Can be made orally, by conduct or in writing
To be an offer, it must be clear, precise and capable of acceptance as it stands
Offer requires an acceptance/rejection
Case Harvey v Facey: buyer asked seller for lowest price an item was - seller says
£900.
Held: sellers reply was merely a statement of price + not an offer to acceptance
2. Invitation to treat
ITT is a proposition that indicates a willingness to consider offers made by others
Case Gibson v Manchester: Mr Gibson applied for a house, council stated ‘may be
prepared to sell the house to him’, Mr Gibson completed an application form but then
council changed its policy
Held: no contract because of language used - clear no binding promises
This contrasts with Case Storer v Manchester: held theory was a binding contract due
to language ‘if you sign the agreement and return it to me I will send you the
agreement signed on behalf of the council in exchange’
Case Clifton v Palumbo: ‘I am prepared to offer you my estate for £600,000
Held: not an offer
3. Communication of offer
Important that the offeree is aware of the offer
Case Williams: defendant gave information in regards to a murder case in which there
was a reward
If the offeree isn't aware of the offer they can't accept/reject it.
Case Fitch: gave information but didn't know there was a reward until after
4. Counter Offer:
If the offeree adds new/changed terms , it becomes a counter offer - original offer
amounts to rejection
Case Hyde v Wrench: Wrench offered to sell his farm for 100, Hyde offered 950. CO
was rejected. Hyde sought back to the original price but Wrench had sold it. Hyde
claimed breach but unsuccessful.
5. Request for information
Doesnt amount to counter offer nor destroys the offer.
Case Stevenson v Maclean: offeree enquired about an iron. Offeror sold it believing it
was a CO
Held: there had been no rejection + it was merely an inquiry - offer still open to
acceptance
Lord Denning’s approach to formation of contract: ‘if the response contains changes to
prince, payment terms, delivery, liability + dispute mechanism - the response would
constitute a rejection
, 6. Termination:
Revocation: withdrawal of an offer can take place anytime before acceptance
Case Routledge: seller took house off market before he was meant to
Held: entitled to do so because at the time of revocation there was no acceptance
Rules to revocation:
a) Must be clearly communicated to the offeree that there is clear intention to
revoke
Case Bryne: defendants posted a revocation to claimants on Oct 8 but wasn't
received till the 20th
Held: revocation ineffective as offer remained till 20 when it was received.
b) Can be made by reliable 3rd party/agents whom both parties rely on
Case Dickinson: claimant was told by a mutual friend that the offer had been
withdrawn
Held: valid revocation
c) Unilateral offer cant be withdrawn while the offeree is performing
Case Errington: dad bought son a house and would transfer name into sons
once he had finished paying mortgage- dad dies and other members want
house
Held: if son kept paying mortgage house is his
d) Death of one party - offer ceases automatically - some cases fall on
deceased's executors
e) Failure of a condition precedent - where the offer is made subject to specific
conditions being met by the offeree. An offer that is subject to conditions
whether express/implied cant be accepted if the conditions fail.
i.e an offer to buy goods implies that they'll be in the same state of conduction
from offer to acceptance
7. Acceptance
Confirmation of all terms of the offer. Acceptance is important to the enforcement of
the contract because rights + obligations usually come into force at the time of the
contract.
4 essential rules to consider:
a) ‘Mirror image rule’; acceptance must correspond exactly and in every detail to
the offer made
b) Is it an acceptance or counter offer (Hyde v Wrench)
c) Is it an acceptance rather than a response or request for further information
(Stenvenson v Maclean)
d) Has it been communicated correctly - only the offeree or his authorized agent
can communicate acceptance
Case Boulton v Jones: Boulton took over business and Jones wasn't aware,
once he found out he refused to pay
Held: jones not liable to pay as no contract between Boulton + Jones
Silence is not consent - offeror cant impose liability on an offeree by stating that
silence shall be deemed to be acceptance
- Case Felthouse: ‘if i hear no more from you, I shall consider the horse mine’
Nephew had not accepted uncles offer to buy
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