Contract law

• Contract


  A legally binding agreement between two or more parties
• Bilateral contract


  Both parties take on an obligation
• Unilateral contract


  One party assumes an obligation, can be made to the whole world
• Differences between Offer and ITT

  - Offer is part of the negotiations

  
  

  - ITT is merely an indication of a willingness to start negotiations

  
  

  - Offer can form a contract when accepted, an ITT cannot
• ITT


  1) Ad in a newspaper (Partridge)

  
  

  2) Shop window (Fisher v Bell)

  
  

  3) Self-service shop (Pharmaceutical society of GB)

  
  

  4) Auctions (Harris)

  
  

  5) Requests for information
• Offer


  1) Vending machine - makes the offer

  
  

  2) Giving of information (Harvey v Facey)
• Ending an offer


  1) Lapse of time

  
  

  2) Revocation

  
  

  3) Rejection

  
  

  4) Counter-offer

  
  

  5) Death of offeror

  
  

  6) Death of offeree
• Acceptance has to be positive and unqualified

  - Response of 'yes' not 'yes, but'

  
  

  - If the offeree attempts to vary the terms this is then a counter-offer (Hyde v Wrench)
• Request for information


  Not a counter-offer, do not terminate the offer and it is still open to acceptance (Stevenson v Mclean)
• Forms of acceptance


  - Words: can be said or written

  
  

  - Conduct: general silence or inaction is not acceptance, a positive act is needed

  
  

  - Any acceptance other than what is specified is unlikely to be valid (Yates v Pulleyn)
• Specified methods of acceptance

  Only acceptance by specified methods will be binding (Tin v Hoffman)
• Methods of communication of acceptance

  1) Conduct

  
  

  2) Postal rule

  
  

  3) Electronic
• Executed consideration


  Completed consideration
• Executory consideration


  Consideration which has not yet been completed
• Need not be adequate but it must be sufficient

  Must be real, tangible and have some actual value (Chappell)
• Past consideration is not good consideration

  Something already done at the time the agreement was made
• Must move from the promisee

  A person cannot sue or be sued under a contract unless they have provided consideration for it
• Performing an existing duty

  Merely doing something you are already bound to do is insufficient consideration for a new contract
• Privity of contract


  A person not party to a contract cannot sue or be sued under it
• Intention to create legal relations

  Parties must intend the agreement to be legally binding
• Commercial agreements (McGowan)


  ITCLR is presumed to exist
• Social agreements

  ITCLR is presumed not to exist
• Condition


  - A major term that goes to the root of the contract

  
  

  - A breach has serious consequences
• Warranties


  Minor terms within a contract
• Innominate terms


  - Looks to the effect of the breach and whether the party was deprived of the whole benefit of the contract
• Discharge of contract


  Deals with the end of the contract
• Complete performance


  Must be 'complete and exact
• Frustrating event


  Before the contract can be completed, an event occurs which makes completion impossible (Paradine)
• Doctrine of frustration


  - If it is impossible for the contract to be completed as the subject matter has been destroyed (Taylor)

  
  

  - Radical change in circumstances (Krell v henry)
• When frustration may not apply

  - Self-induced (Maritime)

  
  

  - Contract becomes less profitable/ difficult to perform (Davis)

  
  

  - 'Event' was a foreseeable risk
• Fixed damages


  Parties may fix the sum needed to be paid if there is a breach into the contract (Cavendish)
• Equitable damages


  Awarded where damages would be inadequate
• s9


  Implies a term in every contract that goods will be of satisfactory quality
• s9 (2)

  What a reasonable person would consider satisfactory given the price, description etc
• s9 (3)


  Fitness for all common purposes
• s9 (4)


  Does not apply if:

  
  

  - Defect drawn to consumers attention

  
  

  - Consumer makes an examination before purchasing

  
  

  - Defect would have been revealed by a reasonable examination
• s10


  If a consumer makes it known to a trader a particular purpose, the goods must be fit for that purpose (Baldry)
• s11


  Goods as described; match description (Beale)
• s20


  Short term right to reject
• s23


  Right to a repair/ replacement