CONTRACTS Exam Notes Essay

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PRINCIPLES OF CONTRACTUAL LIABILITY LAWS11-212 NOTES

DEFINITIONS:
Estoppel: Prevents promissors reneging in their promises where it would be unconscionable for them to do so,
Waiver: Strict performance, can still be technically demanded, but won’t be insisted on.
Privity: Only a party original to contract may sue.
Unilateral contract: reward type contracts – obligation one sided
Collateral contract: statements that are intended to have some contractual significance but are not included as terms. Without it contract would not have come into effect. Can be enforceable as a contract in its own right.
Merger clause: statements that say ‘this is the complete contract and no oral statements count.’

CONTRACT FORMATION
Background/Context
Contract law comes from principles extracted from cases. Though increasing influence of statutes. Part of civil law (private law). Though no clear lines, e.g. quasi-contractual or restitution.
What is contract?
Essential elements: FORMATION OF CONTRACT
(1) two or more parties with legal capacity
(2) objective agreement between the two parties (offer and acceptance)
(3) sufficient certainty
(4) consideration OR deed OR estoppel
(5) comply with formalities if required
(6) no vitiating factors, such as fraud and duress.
The Offer
A manifestation or expression by one party (offeror) to the other (offeree)
Offeror willingness to be bound by certain terms.
If the Offeree is prepared to accept those terms.
Offeror can dictate terms – offeree can (1) reject offer (2) make a counter offer (3) ask for clarification (4) do nothing until offer terminates.
Hyde v Wrench (1840) 49 ER 132 counter offer terminates the original offer
W offers to sell his farm for 1000 pounds, H replied to offer 950 pounds. H then said he would pay 1000 pounds. W did not reply and H sued. Held no contract.
Butler v Ex-Cell-O Corp acceptance on different terms amounts to a rejection of offer and a counter action – no agreement yet
B (seller) quotes for machine with terms on back of quote (terms say price to be settled at time of delivery). E places an order on terms below – for fixed price and has tear-off slip for acknowledgement of receipt.
B fills it in and sends it to E with covering note saying ‘in accordance with our revised quotation.’
On appeal, court held E wins (1) revised quotation only affected price/delivery for fixed not floating price.
Smith v Hughes (1871) 6 QG 597 “If, whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party…then he is bound.”
Carlill v Carbolic Smoke Ball Co: CSB advertised it’s smoke ball by saying there was 100 pound reward if ‘you get flu or cold after using our product as per instructions for 2 weeks’
Went to say 1000 pounds deposited with bank to show genuine offer.
C sued for the reward. CSB argued that (1) cannot have an offer to the whole world (2) no notification of acceptance (3) no intention to be bound (4) too uncertain.
Effect of offer and acceptance – artificial model – does 4 things
(1) Settles the fact of agreement – is there a legally binding agreement
(2) Settles the content of the agreement – the express terms
(3) Settles time of agreement – no further unilateral change
(4) Settles place of agreement – where acceptance is notified to offeror
Domestic contracts/international contracts
Domestic contracts have common law supplemented by statute. International contracts have rules of private international law. Multilateral treaty such as United Nations Convention on the International Sale of Goods
Invitations to treat/negotiate – advertisements, marked prices on shelves and shop windows.
Pharmaceutical Society of Great Britain v Boots Cash Chemist [1953] 1 QB 401 – sale to be effected under supervision of registered pharmacist. Periodicals and catalogues covered in Partridge v Crittendon [1968] 2 All ER 421 where P was charged with offering for sale a rare bird against the…