Class Notes (1,200,000)
CA (650,000)
Western (60,000)
Law (1,000)
2101 (900)
Lecture 14

Law 2101 Lecture 14: Contract Law

Course Code
Law 2101
Mysty Sybil Clapton

This preview shows pages 1-3. to view the full 11 pages of the document.
Contract Law helps to facilitate an exchange between two people
Intuitions: Is there a legally enforceable contract?
Sam and the million-dollar house
Sam bought a million-dollar home
Donna and the gift to the University
Donna wants to donate money to Western
The, hages he id, she doest at to gie ,$, she ats to gie 
Can the university sue her?
Gaielle ad he Dads poised a
Father tells her that if she gets a B average, her dad will give her a new car
She gets a B+ average ut the sas she doest eed a ead fo doig soethig i he
own best interest
The Function of Contract Law: Contract Law has two functions:
1. Facilitates exchange: gives reasonable assurance to one party that the other party will be held
accountable to their promise
* when the exchange is complex, it is important to have a contract
* giving remedies that put the injured party in the position that he or she would have been in had the
contract been performed (called expectation damages)
2. Separates Legal from Moral: sepaates out poises that ill e efoed  la fo those that ot
be enforced by law
*differentiate between those that are legally enforceable and those that are not
Atiyah: Nood a seiousl popose that all promises should be enforceable; to abolish [the rules of
contract formation], therefore is simply to require the courts to figure out what promises are
Which of the promises we made we intend to be made legally enforceable
The Nature of Contract Law - Judge Made (not statute based, but common law)
1. Tradition cannot codify the laws of contract
2. Practicalities:
Hua odut is ifiitel ariable, and no codifier can foresee every problem that will arise,
espeiall i the aea oeig so a diffeet kids of hua iteatio. Waddas
Special Contracts (for special types of contracts)
Whereas the main area of contracts has been left to the judges, highly specialized areas of law have
had specialized rules created for them.
These are special contracts.
Consumer contracts: frequent for some companies to use their power to pressure someone into
buying an agreement
o Eaple: oolig off peiod ou a ak out ithi a etai aout of tie, ipleeted
to protect consumers from the sales tactics
1. Sale of Goods Act: specialized rules about quality of the product, must match the description, etc.
2. Consumer Protection Act
find more resources at
find more resources at

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

3. Domestic Contracts Family Law Act: special form of contract because of the nature of the relationship
between the parties entering the contract
Technical Aspects of Contract Formation
1. Offer & Acceptance: mutual agreement between the parties to the contract of sufficiently clear terms
2. Consideration: bargain for exchange of value between the parties
3. Intention to Create Legal Relations: parties entering tend to be legally bound to one another, meaning
if something goes wrong, they know they will suffer legal consequences
Bargain theory of contracts:
Bargaining through the terms of the agreement that you wish to enter into
Offer Defined: what is an offer?
A offe is a epessio  oe pat of his asset (agreement) to certain definitive (clear) terms, which
looks forward to acceptance by the othe to the eat sae tes. Corbin
Offeror: the one making the offer
Offeree: the one to whom the offer is made (the one receiving the offer)
You make an offer, it creates the power of acceptance; the ability to affect the legal rights of someone else
You make an offer and I accept it? You are legally bound to me
The offeror is under a liability, in the sense that the other party could accept, and make the offeror
legally bound to the offer he or she made
Requirements of an Offer
Inclusive Terms must include what I want and what you must do in return (must include all terms)
Outward Directed Expression
Sufficiently Certain
Time Requirements
Willingness to be Bound
Inclusive Terms: consensus ad idm (meeting of the minds)
I ill sell  house is ot a offe.
I ill gie ou $5, is ot a aeptae.
A proper offer is: I ill sell y ar for $50,000.
A proper aeptae is I ill uy your ar for $50,000.
*have to include the responsibilities of both parties
Outward Directed Expression
An offer must be a form of communication that would lead a reasonable person to conclude that it was
directed to them.
Example: Joe and Mark and my car.
Sufficiently Certain: you want to know what you are being legally bound to do therefore your terms need to
be certain
It is a fundamental principle of contract formation that the offer which states the contractual terms
must do so with sufficient definitiveness (has to be clear for it to be an eligible offer)
find more resources at
find more resources at

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Contracts to agree or to negotiate are not sufficiently certain enough to be enforced, see Scammell v.
Said there were too many details in the contract that were not clear; it was too uncertain for
the court to allow it
The dot at to ake the otat; the at to sipl efoe the otat the hae
already made
Objective Standard
Whether or not there has been Offer and Acceptance is judged objectively (not judged based on the
minds of the parties to see what they thought when they constructed the contract).
Storer v Manchester City Council:
the city council has adopted a policy of selling its community housing (low cost housing)
If they had rented for a period of time, those tenants were able to purchase that unit
Advantageous for the low income people living there
City council wrote to the plaintiff informing him that they were willing to sell the unit to him
Plaintiff filled in an application further correspondence between them, eventually, the city
council sent a letter with terms; said its done if he signed and sent it back
Said they would send the official contract after he signed the first piece of paper
There was a change in the government e oseatie leades didt at to sell the
homes to the people
Said they would still sell to anyone who had complete contracts; any outstanding offers were
Beause “toes otat ast fialized, he assumed that they did not have a binding
Did the defendant have a fully formed contract with the city, or could it be revoked?
The court said that there had been clear offer and acceptance, that may not have been what
was in the subjective thoughts of the city council, but objectively, he would be wrong
Judge said that the it ouils aguet as that ould e o otat eause the ouil
clerk did not think there was one
Lord Denning (Judge): I otats ou do ot look ito the atual itet i a as id. You look to
what he said and did. A contract is formed when there is, to all outward appearances, contract. A man
cannot get out of a contract by saying; I did ot ited to otat, if  his ods he has doe so.
Time Requirements always need the offer before the acceptance
The offer must come before the acceptance. You must be able to think of the process of contract
formation as offer, followed by acceptance.
Two identical offers sent by different parties to one another do not make a contract but rather are
cross-offers both awaiting acceptance.
You send to someone I would like to sell my car for 50,000$
At the same time, they send I would like to buy your car for 50,000$
You do not have a contract, because you have two offers, no acceptance on any parties behalf
Willingness to be Bound: I am willing to be bound to the legal consequences if I fail to make the promise I
To count as an offer, the statement must show a willingness to be bound.
Statements of itet e ited to sell idgets at $5 do ot ostitute offes.
Pie uotatios e sell idgets at $5 pe uit do ot ostitute offes.
Calls fo Ifoatio ho uh ould ou hage fo those idgets? do ot ostitute
find more resources at
find more resources at
You're Reading a Preview

Unlock to view full version