Week 2 - Contracts
Make a contract
- to know that if someone breaks a promise we can take them to court as a victim of breach of con-
- meeting of the minds (consensual agreement)
- Consensus to subject and object of the contract
- Intention is a presumption at law
Top Five List
1) Is an oral agreement legally enforceable in court?
Yes (unless it falls under the Statute of FraudsAct).
2) Does an offer terminate if one party dies?
3) Can one be forced to pay up after making a pledge to a charity?
Typically no, unless the pledge was for a specific undertaking, and the charity relied on
4) Which element of a contract does a sealrelate to?
5) Do I have to pay the plumber if we never agreed on a price?
Yes, under quantum Meruit, unless the plumber is family or a friend.
Promisor - person who makes promis
Promisee - person who receives promis
Offeror - person who makes offers
Offeree - person who receives offer
Elements of a Valid Contract
If any one of these are missing - the contract is void 2.2
There must be an intention of promisor to be bound by promise made
- Intention presumed at law when promise made unless
- (a) parties not at arms length (e.g. Relatives, friends);
- Can you go to court and sue family? - no family doesnt intend to be in a contract
- (b) advertisement (merely invitation to do business)
- E.g. Future shop advertises at one price but changes it during that week
- Havent entered into a contract so no breach of contract
- BUT are there any exceptions to the exceptions?
When you enter into a store and see an item on the shelf, is this an offer, or just an invitation to do
- Invitation to do business
When you bring the item to the check-out counter, have you accepted the offer, or are you just
making an offer?
- Just an offer
Is the offer accepted only when the cashier takes your money?
- accepted when money is taken and accepted
When is Contract Entered Into? (e.g. Meeting of the minds)
- Offer- goods on display/advertisement
- Acceptance - pick up goods/walk into store with advertisement
Situation B THIS ONE
- Offer - payment at counter
- Acceptance - cashier takes money
- Invitation To Receive Offer
- Advertisement/invitation to tender
- To create a legal relationship
- Offer 2.3
- Unambiguous offer must be communicated before acceptance takes place
- only a promise is made with the intention of creating a legal relationship may be enforced
A) Communicated: only person to whom offer is made may accept offer
B) Timing: if acceptance before offer is made, offeror not bound by promise (acceptance must
come after offer is made)
- cannot accept an offer we do not know of
- e.g. Lose puppy, put sign that says for reward but someone brings dog back and then
sees the sign, they are not obligated to pay
C) Unambiguous: terms of offer (e.g. Price) must be sufficiently clea
- e.g. give friend fare share of profits - not official because it is not clear what the
- Acceptance of offer must be communicated by offeror in form/manner requested or implied by
offeror in offer (if I request a specific form of acceptance, it must be accepted in that form)
B - Responses
C - Lapses
D - Revocation
A) Forms/Modes ofAcceptance
i) verbal (e.g. In-person/telephone like I agree; Ill pay it)
ii) Written (e.g. Document/letter/fax/e-mail)
- Rule (Timing): if by letter, acceptance at time placed in mailbox (if faster method pre-
ferred then acceptance when letter received) 2.4
- Rule (timing) - if by fax/courier/e-mail, acceptance at time received (not actually read)
iii) actions (e.g. Nod head, handshake, complete their part of contract)
- e.g.At auction, auctioneer makes an invitation, person who wants to buy makes of-
fer, auctioneer says sold mean that the offer was accepted
- Negotiate contract, sign it,
- acceptance by performing an act
- E.g. Putting money in Coke machine - accepting offer
- If offer is made a certain way, we have to accept it in the way that they tell us
- or else whatever is reasonable
If making an offer to someone but they dont communicate offer of acceptance and we still send
the person something
- SILENCE is NOT considered acceptance
Pre existing contract - someone will periodically send us DVDs and we have a week so they
keep sending them
- SILENCE now is considered acceptance
Negative option billing
- if Rogers were to give you a channel for free then just start billing you