acct252 midterm

• Definition of a contract: contract is an agreement enforceable at law, made between two or more persons, parties are legally bound to perform promises contained in the contract
• Objective of the law of contracts: to provide certainty in commercial and other transactions
• Express contract


  Expressed orally or in writing
• Implied contract: Contract that is not expressed orally or in writing, but inferred from the conduct of the parties
• Bilateral contract: Each parties in the contract exchanges a promise for a promise of the other party

  Concluded by communication of acceptance
• Unilateral contract: One party makes a promise to do something in return for an act of the other party

  Concluded by performance or commencement of the act
• Valid contract: Contract that meets all the essential elements of a contract or enforceable by the courts
• Void contract: Contract that cannot be enforced. May be void at formation or subsequent to formation
• Voidable contract: Can be valid and enforceable but can be avoided or cancellable
• Unenforceable contract: Contract that is valid but Court will not enforce it
• executed contract: contract that is fully performed by both parties
• Executory contract: contract that is yet or not fully performed by the parties
• Elements of a valid contract: agreement, consideration, intention to be legally bound, capacity, genuine consent, legality
• Agreement: No contract without meeting of the minds between the parties

  Traditional and global approach
• Traditional approach (agreement): Court looks at whether there was an 'offer' made and whether there is 'acceptance' of that offer
• Offer: expression of willingness to contract on certain terms made with intention to be legally binding as soon as it is accepted by whom it is addressed
• Elements of an offer: 1. offer is sufficiently definite and certain in its essential terms

  2. offeror must intend to be legally bound by those terms

  3. offer must be communicated to whom it is intended to be made
• Invitation to treat: statement inviting the other person to make an offer
• Enquiry: mere request for more information about the terms of the offer
• Supply of information: statement only intended to supply information on which some future dealing may be negotiated
• Harvey v Facey: Appellant telegraphed "Will you sell us Bumper Hall pen? Telegraph us price" (enquiry)

  respondent replied: "Lowest price 900" (supply of information)

  appellant answered: "We agree to buy Bumper Hall Pen" (offer)

  Respondent refused to go through with the sale (no acceptance of the appellant offer)
• Examples of invitations to treat: advertisements (Partridge v Crittenden)

  shop displays (Pharmaceutical Society of GB v Boots Cash Chemists)

  auctions

  tenders
• Partridge v Crittenden: placed advertisement of protected species in newspaper

  fined for selling protected species

  did not have to pay fine because ad was invitation to treat, not an offer
• Pharmaceutical Society of GB v Boots Cash Chemists: Display of goods on shelf is invitation to treat

  offer is only made when customers comes up and places items on counter, and cashier accepts offer by initiating the sale, and contract takes place
• Objective test: 1. whether conduct of alleged offeror is such as to induce a "reasonable person" to believe they are making an offer (Leonard v PepsiCo)

  2. whether alleged offeree actually holds that belief, whether they believe the offeror is making a genuine offer (Keller v Holdman)
• Advertisements: If terms are clear, definite, leaves nothing open for negotiation = may be an offer

  (Leftkowitz v Great Minneapolis Surplus Store)
• Carlill v Carbolic Smoke Ball Co: company placed ad in newspaper offering reward if anuone used smokeballs and caught influenza

  plaintiff purchased and caught influenza

  sued successfully and company appealed

  ad was specific and definite and no further negotiation required

  also example of unilateral contract
• Offeree's options for offer: accept

  reject

  counter offer

  ask or enquire for further info
• counter-offer: offeree makes an offer to offeror relating to same matter but on different terms

  making counter offer automatically rejects counter offer
• Hyde v Wrench: making counter offer destroys original offer

  H's agreement was not valid because original offer was terminated from H's counter-offer
• Cross-offers: When two parties make the same offer to another at the same time
• Tinn v Hofffman: Cross-offer made

  No acceptance because there was none, just two offers that were made at same time
• Conditional offer: Offer made subject to a condition

  Not definite and certain, so not a valid offer unless condition is fulfilled
• Buhrer v Tweedie: No offer for T to accept as the condition of the final approval from solicitors did not get fulfilled, therefore no acceptance and no contract was concluded
• Termination of offer: revocation

  rejection

  counter-offer

  lapse of time

  change in circumstances

  failure of condition

  death of party

  supervening incapacity
• Revocation: Must be brought to attention of offeree by offeror or reliable source (Dickinson v Dodds)
• Routledge v Grant: promise to keep offer open is not binding
• Lapse of time: Acceptance must occur within a reasonable time if not stated in offer (Ramsgate Victoria Hotel)
• Change of circumstances: If exisiting set of circumstances change, then offeror may not want to continue
• Global approach: Used in prolonged or complicated negotiation

  views case wholly and objectively

  Used in Boulder Consolidated