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Chapter 10-15

COMLAW 101 Chapter Notes - Chapter 10-15: Click Wrap, Garage Sale, Ribena

Commercial Law
Course Code

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[ Tuesday 16th January ] - Workshop 2
Review: stare decisis, ratio decidendum, obiter dictum, distinguishing, persuasive
What if: you lose a case and six months later the court of appeal decides another case that, if the
ratio where applied to your case, means you would win? That is, the law has now changed. Can you
retry case?
No res judicata - a matter which has been finally adjudicated upon.
[Wednesday 17th January ] - Liability in contract
Law of contract - 3 lectures
Reading: Watson et al chapter 12, Eagles et al chapter 19
Contract: deciding what your obligations are going to be
“The factor which most uniquely distinguishes the law of contract from other bodies of law
concerned with civil obligations, is that it is based upon agreement between two or more people
who assume mutual rights and duties. While in tort [and] equity … obligations arise through the
process of law, irrespective of the individual’s wishes, contractual obligations are in essence
voluntarily assumed.” (p. 350 of Set Text)
A contract is an agreement between two or more persons who are called the parties to the
However, not all agreements are contracts
An agreement will not be a contract if it was not intended to be enforceable by law
An agreement will not be a contract if it was not supported by consideration a concept
peculiar to common law legal systems which will be explained only in very broad terms in this
section of the course.
Week 3
Monday, 29 January 2018
12:01 PM
COMLAW 101 Page 1

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Intention to create legal relations
The schematic approach:
(extra: genuine consent, capacity, legality)
Accept offer
Reject offer
Counter offer
Request further information
Offeree's options upon receiving an offer:
In addition to these three basic factors, the law of contract recognises that other factors may also be
in existence which result in the contract, though technically created, being unenforceable, subject to
cancellation or otherwise subject to modification by the court.
These other factors include:
a lack of genuine consent (subjective) to the agreement (eg, threats brought to bear upon one party
to the contract)
a lack of contractual capacity (eg, one party to the contract is a minor). Drunk, criminally insane
the subject matter of the contract is illegal (eg, a contract to commit a crime)
a misrepresentation or a mistake which can affect genuine consent
In this course, these so-called vitiating factors are not covered.
(The process of agreement)
An Agreement freely made
Offer and acceptance might be described as the tools for determining the existence of an
agreement. (See ¶19-01 of Set Text.)
An offer and analysis of the facts to identify whether or not there is an agreement can be used in
almost all cases
Offer - An offer is an indication that a person is willing to enter into a contract on particular terms.
Offeror: person making the offer, Offeree: person to whom the offer is made
An offer will usually be identified by specific terms which are capable of acceptance by the other
An offer to buy a car from X
An offer to sell a car to Y
An offer can even be made to the world at large:
Carlill v Carbolic Smoke Ball Company
COMLAW 101 Page 2

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Swiss army knife case, can use for almost anything, About offer and acceptance. Used every possible
argument, offer to the world.
You cannot make an offer to the world company argued no, eg reward a cat is found in another
country you can still return and win
But usually advertisements are not regarded as offers. They are normally taken to be invitations to
treat or invitations to the public to make individual offers which may then be accepted on a case by
case basis by the advertiser.
Offer or invitation to treat?
Advertisement selling there is limited stock, there is negotiation. Whereas burgers saying you can
get 3 + 1 this is an offer where the company must keep their promise, Similarlily must give burgers to
first 200 customers for free. This is an offer that must be kept
Sending order in offer of invitation. Retail can freely reject or accept.
Pharmaceutical Society of Great Britain v Boots Cash Chemist invitation to treat
Saw that big medicine company in supermarket which is bad as not under pharmacist. Killing smaller
pharmacy. Display of goods is an offer, display of goods is an invitation to treat.
‘no trade discount’ they can refuse to sell to you, also the customer can theoretically get a
discount. Even in a supermarket.
Cash chemist won
Fisher v Bell similar case
argued was invitation to treat, because you don’t expect to negotiate
Puffs An expression or exaggeration made by a salesperson or found in an advertisement that
concerns the quality of goods offered for sale.
Smoke ball – argued that this is a puff, said it was a joke.‘the reasonable person’ you can’t get a 23
million aircraft for sending in 70,000 pepsi caps ad advertised on tv.
COMLAW 101 Page 3
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