-Every right you have is granted by law
-Black letter law – something written down
-Is no law unless it is written by a recognized body – positivism
-Implied, verbal and written agreement
-Formal contracts must be in writing
-ex. Land contracts, some employment contracts
1. Intention to create ‘legal’ relations
2. Offer – made by offeror
3. Acceptance – must be communicated by offeree
4. Consideration – thing of value, (worth trading), benefit given,
5. Capacity – Legal, mental, physical, age
6. Legality – law will not endorse certain contracts
-Surrogate parenting, sexual
Unilateral offer – no acceptance communication necessary
• The law of contacts is concerned with expectations induced by the conduct of
• Promises are a fundamental idea in contract. A promise is an undertaking as to the
future of conduct of the party promising, the promise, with respect to the part to
whom the promise is given, the promisee. The former agrees to the act, or
refraining from an act, to the advantage or for the benefit of the latter. Offers
• An offer is an expression by one party of his assent to certain definitive terms,
provided that the other party involved in the bargaining transaction will likewise
express his assent to the identically same terms.
• An offer must be an expression of will or intention. It must be an act that leads the
offeree reasonably to believe that a power to create a contract is conferred upon
him. It is on this ground that we must exclude invitations to deal or acts of mere
preliminary negotiations, and acts evidently done in jest.
• An expression of willingness to make a contract is not operative as an offer unless
it is made in such a manner as justifies another person in thinking that it is
directed at him for his acceptance.
• In order to be legally operative and to create a power of acceptance, it is necessary
that the offer shall contain all the terms of the contract to be made. It is not
enough for one party to say what he himself will promise to do, he must also say
what he will do it for, that is, what the other party must do in exchange. If A says
B: “ I will send and convey blackacre to you,” and B replies, “I will pay you
$5000,” no contract has been made yet.
November 18 2009
Contract as a promise essay
Detrimental reliance: a term commonly used to force another to perform their
obligations under a contract, using the theory of promissory estoppel. Promissory
estoppel may apply when the following elements are proven:
A promise was made
relying on the promise was reasonable or foreseeable
there was actual and reasonable reliance on the promise
Enforcing the promise can only prevent injustice.
• Detrimental reliance must be shown to involve reliance that is reasonable, which
is a determination made on an individual case by case-basis, taking all factors into
consideration. Detrimental means that some type of harm is suffered
• Comes from tort law.
• Negligent misrepresentation
• If that were what they were all about it would be the same as tort law.
Expectation damages: are damages recoverable from a breach of contract. Expectation
damages are composed of incidental damages and consequential damages.
• The purpose of expectation damages is to put the non-breaching plaintiff in the
position he would have occupied had the contract been fulfilled. Expectation damages are to be contrasted with reliance damages and restitution damages,
which are limited to, or by, incidental damages.
• To put the plaintiff in the position they would have been if there were a contract
what were your expectations?
• Individual promise.
Offer and Acceptance
Pharmaceutical Society v. Boots Cash Chemist
• Famous English contract law decision on the nature of an offer.
• The court distinguished the display of a product in a store with a price attached is
not sufficient to be considered an offer, but rather an invitation to treat.
• Initiation to treat: an expression of willingness to negotiate. A person making an
invitation to treat does not intend to be bound as soon as the person to whom the
statement is addressed accepts it. It is distinguished from a binding offer, which
can be accepted to form a contract.
• Boots cash chemist had just implemented a new method for its customers to buy
certain medicines. They would let shoppers pick drugs off the shelves in the
chemist, and then pay for them at the till, rather than require all medicines to be
behind a counter and for an assistant to have to get what they requested
• The pharmaceutical society of Great Britain objects, and argued that under the
pharmacy and poisons act, this was an unlawful practice.
• A pharmacist needed to supervise at the point where “the sale is effected”, when
the product was one listed on the 1933 act’s schedule of poisons.
• The society argued that displays of goods were an offer and when a shopper
selected and put the drugs into their shopping basket this was an acceptance.
• Therefore because no pharmacist had supervised the transaction at this point,
Boots was in breach of the Act.
• Boots argued that the sale was still only effected at the till where a pharmacist
was present if required.
• Not suing for breach of contact, want to protect “little guy” argue Boots model
goes against Poison act.
• Bad argument: if you change your mind and put the item back on the shelf then
the consumer is breaching contract.
• Both Queen’s Bench division and court of appeals sided with boots.
• They held that the display of goods was not an offer.
• By placing goods into the basket, it was the customer that made the offer to buy
• The offer could either be accepted or rejected by the pharmacist at the cash desk. • The moment of the completion of contract was at the cash desk, in the presence of
the supervising pharmacist.
• Therefore there was no violation of this act.
Invitation to treat: display of price on shelf.
Offer: customer brings item to cashier and offers to buy
Acceptance: owner of cashier rings item in. owner has final say, therefore it is the owner
who accepts or does not accept the offer of the client.
The transaction is not complete until it is passed through the cashier.
Dickinson v. Dodds
• On Wednesday June 10, 1874 Dodds (D) sent Dickinson (P) a memorandum in
which he agreed to sell a specified piece of land for 900 pounds with the offer
held open until 9am the following Friday. Dickinson alleged that he had decided
to accept Dodds’ offer on Thursday morning but did not contact him because he
thought he had until Friday.
• On Thursday afternoon Dickinson learned that Dodds had offered or agreed to sell
the land to a third party, Allen. Dickinson wrote a note to Dodds accepting the
offer and delivered it to his home. Leaving it with his mother who forgot to give
him the note.
• On Friday morning before the original deadline to accept the offer, Dickinson and
his agent gave Dodds a written acceptance of the offer but Dodds said it was too
• Dickinson sued for specific performance.
• Can the plaintiff accept a third party has accepted an offer after it?
Side note: judges in this case = vice chancellors in the courts of equity.
• If you could prove that law was inaccurate you could summon court of chancery.
• Common law courts are comfortable with awarding damages
• Equity: acts against people makes people do certain things. Equitable
• Injunction: courts order you to do something
Back to case
• We are looking for equitable remedies
• Bill in this suit prayed that Dodds would perform original contract. He wanted
him to do what he said he was going to do.
• Or he wanted to restrain from conveying property to Allen
• Or for Allen not to do anything
• And he wanted damages.
Issue: whether a promise to hold an offer open is binding where the other party does not
accept until after he learns that the offeror has already conveyed the property. Holding no, an open offer to sell terminated when the offeree learns that the offeror has
already agreed to sell to someone else.
• Trial: when the paper was dropped off it was an acceptance.
• Appeal: no acceptance of offer on Thursday night because D did not receive it, so
it was not communicated. Did receive it at 7AM the next morning but their minds
were not together (consensus ad idem).
• P knew that the offer was being negotiardd with someone else.
• D revoked offer even if P heard from 3 party, it was a reliable source because he
acted as if it was.
• D did promise to keep offer until Friday morning and it was written, why wasn’t it
binding? No consideration, nu diem pactum.
• If he had given a dollar in the first offer it would have made it binding because of
• Revocation of offer can be made by indirect communication. Offer can be
terminated without formal notice. The plaintiff can sue for damages but not for
Consensus ad idem: meeting of the minds. A phrase in contract law used to describe
intentions of the parties forming the contract. In particular it refers to the situation where
there is a common understanding in the formation of the contract. This condition or
element is often considered a necessary requirement to the formation of a contract.
Nudum pactum: “bare of naked promise”. In common law it refers to a promise that is
not legally enforceable for want of consideration. If an offer is made without
consideration it may be revoked at any time by the offeror before acceptance by the
Consideration: is the legal concept of value in connection with contracts. It is anything of
value in the common sense, promised to another when making a contact. It can take the
form of money, physical objects, services, promised actions, or even abstinence from
future actions. If either promisee already had a legal obligation to render such payment, it
cannot be seen as consideration in the legal sense (like paying your income tax).
Reasoning: the court stated that since Dickinson knew that Dodds’ offer had been
implicitly withdrawn when he learned that he sold the property to someone else (through
a reliable source), there was no meeting of the minds art the time acceptance was made
and therefore a binding contract was not formed.
Specific performance: an order of the court, which requires a party to perform a specific
act, usually what is stated in contract. It is commonly used in the form of injunctive relief
concerning confidential information or real property. It is usually used to complete a previously established transaction, thus being the most effective remedy in protecting the
expectation interest of the innocent party to contract. - Almost never ordered in contact
for personal service because it would create a bad-working relationship. Even if u prove
that money is not enough etc… courts can still say no.
Trustee: a holder of property on behalf of a beneficiary. A trust can be set up either to
benefit particular persons, or for any charitable purposes.
Williams v. Carwardine
• Concerns how a contract comes about through the offer of a reward. It also raises
interesting questions about the necessity of reliance on an offer in the formation
of a contract.
• Must show offer, not necessarily be motivated by it.
• Walter Carwardine was murderer.
• The plaintiff, Mrs. Williams, gave evidence against two suspects, but did not say
all she knewthThe suspects were acquitted.
• On April 25 , the victim’s brother and defendant, Mr. Carwardine, said he would
give 20 pounds for information that would lead to the killer’s arrest.
• Mrs. Williams gave more information, which led to the conviction of 2 men (1
being her husband) and claimed the reward.
• Mr. Carwardine refused to pay. At the trial her motives were examined.
• It was found that she knew about the reward, but that she did not give information
specifically to get the reward. It was apparent that after the 1 trial her husband
beat her and she didn’t want to die without telling the cops the truth about what
• Did the handbill constitute an offer and was Williams entitled to the reward as she
did fulfill all the requirements stated by the handbill?
• At trial: Parke said, “The motive was the state of her own feelings. My opinion is,
the motive is not material.” He held that she was entitled to the award. Asked jury
to examine what her motives were.
• The plaintiff wanted to be a decent person, motive not money, wanted to do the
right thing. New trial ordered.
• Kings bench: held that the plaintiff was entitled to reward. The advertisement
amounted to a general promise of contract to pay the offered reward to any person
who performed the condition mentioned in it, whoever gave the information.
• Two judges stated the motives were irrelevant.
• “We cannot go into the plaintiff’s motives”
• Williams is entitled to the reward as she did know of it and she did fulfill the
• To accept a reward you must know of the offer but it is not necessary to be motivated by it.
Clarke v. R
• Proclamation of money leading to the capture of criminals
• Australia high court.
• Acceptance must be related to offer, ignorance same as not hearing it.
• The claimant wanted to compel the crown to pay a reward if had offered for
information leading to the conviction of a murderer.
• The claimant gave the information but gave it while he was under investigation
for the murder. At first he lied but when he knew he could get pardoned for giving
information he told the police.
• Told the police “exclusively to clear him himself”.
• It was uncertain whether he was thinking about the reward at the time or just
• Is Clarke entitled to the reward even though he did not have knowledge of it and
did not fully satisfy the conditions? E43
• In trial court the plaintiff succeeded on the basis of the Williams case.
• Appeal: forgot about the reward, his evidence showed no knowledge of reward so
it is therefore not the same as Williams because she knew and Clarke didn’t.
• There was no meeting of the minds.
• Clarke could have received the award but he openly admitted that he had
forgotten all about it.
• Cannot accept an offer without knowing about it. Ignorance of offer is same as
never hearing it; acceptance must be connected with offer.
• Obiter = Clarke did not strictly meet with terms of offer.
Hyde v. Wrench
• Leading English contract law case on the issue of counter offers and their relation
to initial offers.
• Lord Langdale ruled that any counter offer cancels the original offer.
• Wrench offered to sell his farm to Hyde for 1200 pounds, an offer which Hyde
• Wrench later wrote to Hyde’s agent offering to sell the farm for 1000 pounds,
stating that it was the final offer and that he would not alter from it.
• Hyde offered 950 pounds, and after examining the offer wrench refused to accept,
and informed Hyde of this. • Later Hyde agreed to buy the farm for 1000 pounds without any additional
agreement from wrench, and after wrench refused to sell the farm to him he sued
for breach of contract.
• I think there is no valid binding contract between the parties for the purchase of
• The defendant offered to sell it for 1000 pounds and if that had been at once
unconditionally accepted there would undoubtedly have been a perfect binding
• Because he counter offered he thereby rejected the offer previously made by the
• I think that it was not afterwards competent for him to revive the proposal of the
defendant, by tendering an acceptance of it.
• There is no obligation of any sort between the parties.
Brinkbon LTD v. Stahag Stahl
• Leading decision of the House of Lords on the formation of a contract using
• Brinkbon was a London company that purchased steel from Stahag, a seller based
in Austria. Brinkbon sent their acceptance to a Stahag offer by telex to Vienna.
• Brinkbon was acting for an undisclosed principle and Sthag found out. They had
never heard of the company and didn’t like liars so they didn’t want the co