Liability in contract

Contracts
1. "A set of promises that the law will enforce"
2. Don't have to be written down
3. Can be made in writing
4. Can be made orally and partly written
5. Some contracts HAVE to be in writing e.g. sale of land, selling copyright, guarantees
6. An agreement is not a contract if it was not intended to be enforceable by law
7. An agreement is not a contract if it was not supported by consideration
Elements
1. An agreement freely made
  1. Offer
    1. indication that a person is willing to enter into a contract on particular terms
    2. Can be made to the world at large
      1. Carlill v Carbolic Smoke Ball Company
    3. Advertisements are not regarded as offers - taken to be invitations to treat
      1. Pharmaceutical Society of Great Britain v Boots Cash Chemist
        Judge ruled that display is offer to treat, basket is offer to chemist, checkout is acceptance
    4. Puffs
      1. Exaggeration made by a salesperson or found in an advertisement that concerns the quality of goods offered for sale
      2. Presents opinions rather than facts, not considered a legally binding promise
    5. Offer may be withdrawn at any time PRIOR to acceptance (once acceptance occurs the contract is made)
  2. Acceptance
    1. Accept offer
      1. Requires: Acceptance of PRECISE TERMS (otherwise its a counter offer), communication of acceptance
      2. Offer can only be accepted by the person to whom it is directed
    2. Rejection of offer
      1. Once rejected the offer cannot be later accepted
    3. Counter offer
      1. occurs when precise terms are not accepted but offeree still wants to negotiate
2. Intention that the agreement may be enforced by law
  1. If an agreement is made in a business context it will be assumed to bring with it an intention to create legal relations except where there is clear evidence of a contrary intention
  2. Balfour v Balfour
    1. Husband/Wife, domestic/social. Husband promised to send $30 a month but they grew apart, she still wanted payments. No enforceable agreement
3. Consideration
  1. The price paid by one party for the other's promise to do something
    1. Not the same as performance (of that promise)
  2. Past consideration is not valid consideration
    1. Re McArdle
      1. Promise of payment given AFTER improvements had already been made = past consideration = not valid
  3. Deeds
    1. A way to avoid the need for consideration but still create an enforceable obligation
4. Other factors that may result in the contract being unenforceable, subject to cancellation/modification
  1. Lack of genuine consent (gun to head)
  2. Lack of contractual capacity
    1. Under legal age (18)
    2. Drunk/drugged
    3. Mental disabilities
  3. Subject matter of contract is illegal
  4. misrepresentation/mistake which can affect genuine consent
    1. e.g. selling an old painting and realising its a picasso

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Liability in contract

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	Created by Meredith Jeory about 10 years ago