Law 02 revision essays part2

Both parties must intent contract to be legally binding

Law can’t enforce contract if no ITCLR

Commercial agreements- law presumes parties intend to be bound by contract. Eg have legal rights if goods are defective (RADIO BUXTON)

Domestic agreements- law presumes parties don’t intend to be bound by contract. Eg don’t sue parents if don’t get pocket money (BALFOUR)

These presumptions can be challenged/ rebutted

Commercial agreements- challenge no ITCLR by words used in the agreement, clear express statement excluding legal intention (VERNON POOLS)

Domestic agreement- challenge was ITCLR in more formal situations. Agreement after divorce in writing = legally binding (MERRITT). Agreement before divorce spoken = not legally binding (BALFOUR)

Formal agreements based on social agreement = legally binding (SIMPKINS v PAYS)

4 ways an offer is ended

Lapse of time- offer for fixed period of time, after which it expires. Or lapses after reasonable period of time depending on circumstances (RAMSGATE HOTEL)

Revocation- can be revoked at any time before acceptance, must be communicated (ROUTLEDGE), can be done by 3rd party (DICKINSON v DODDS)

Rejection- can no longer be accepted, request for more information isn’t rejection (STEVENSON)

Counter offer- during negotiations, rejects original offer and creates new one (HYDE v WRENCH)

Has to be positive and unqualified
By words, written or by conduct
Must be communicated to person making offer
Silence is not acceptance, some positive conduct is required (FELTHOUSE v BINDLEY)
Positive conduct- using goods on approval is acceptance (CARBOLIC SMOKE BALL)

Postal rules- letters of acceptance by post

• acceptance when correctly addressed and stamped (ADAMS v LINDSELL)
• defendant must prove letter was posted

Electronic/ Instant messages- text, email, instant messages

• telephone = instant verbal communication,
  call not heard = no acceptance
  • recieved when other has access to it, not when it was
    sent (ENTORES)

Offer- statement of terms upon which person is willing to enter contract, part of
negotiations (THORNTON)
Invitation to treat- indication of willingness to start negotiations, not an offer,
preliminary to negotiations

Giving information = no offer (HARVEY v FACEY)
Uncertain terms = no offer (GIBSON)
Clear statement of price = offer (BIGGS v BOYD)

Advert- invitation to treat, customer makes the offer, seller accepts or rejects, not
guilty (PARTRIDGE)
Self serve shop- displaying goods is invitation to treat, customer makes offer at point
of sale (BOOTS)
Vending machines- offer made by owner displaying price, customer accepts when
payment given (THORNTON)

Where one party fails or states they will fail to complete their part of the contract
Claimant will want to end contract and right to compensation

Actual breach- poor performance, bad work, substandard goods (POUSSARD)

• non performance, no work done, goods not provided (BETTINI)

  Breach of condition- term goes to heart of contract, claim damages and
  and choice to end contract (POUSSARD)
  Breach of warranty- minor term of contract, claim damages for loss,
  must continue with contract (BETTINI)

Anticipatory breach- party states there will be non performance

• goods or services won’t be provided (HOCHESTER)

Consideration- each party must give something of monetary value, vaue doesn’t have
to be equal (NESTLE)

Past consideration- not valid consideration, doesn't have to be paid as was something
already done at time agreement made (MCARDLE)

Common understanding- request performance before contract exists = valid
consideration, mutual understanding payment will be made
(BRAITHWAITE)

Executory- where one person hasn’t completed their part of the contract
Executed- both parts of contract been completed

Can’t be sued under contract unless consideration was provided (TWEDDLE v ATKINSON)
Person can enforce contract if named, or gainsbenefit (CONTRACTS ACT)

Compensatory damages- put claimant in position they would be in if contract was
performed
Loss of the bargain- money awarded to claimant which was lost due to contract not
being performed
Consequential loss- losses arising from original breach, amount claimed depends if
consequence is too remote to be recovered

Remoteness test- used by courts to see if resulting losses are recoverable, can’t be
liable for unforeseeable losses (HADLEY v BAXENDALE)

Direct/ normal loss- loss of type that would usually arise, assumed in “reasonable completion” at time contract was made
Indirect/ abnormal loss- type that is out of the ordinary, recoverable if defendant knew it could happen in event of breach (VICTORIA LAUNDRY)

Claimant has to do best to keep losses to a minimum