Contract Law: Key Concepts, Offer, Acceptance, and Case Examples

What is a contract?

A set of promises that the law will enforce.

What are examples of contracts?

Purchasing an item, renting an apartment, getting a job.

What are the four requirements for a promise to become a contract?

Offer, Acceptance, Consideration, and Intention.

Who is the offeror in a contract?

The party making the offer.

Who is the offeree in a contract?

The party receiving the offer.

What distinguishes an offer from an invitation to treat (ITT)?

A promise is made by the offeror, while an ITT indicates a willingness to negotiate but cannot form a contract.

Give an example of an invitation to treat.

A 'For Sale' sign on a house or an advertisement.

What is a standard form contract?

An offer prepared by the offeror with terms that cannot be changed by the offeree, often referred to as 'take it or leave it' contracts.

What must an offeree prove to void a contract based on unusual terms?

That the bargaining power was unequal and that they had no knowledge of the unusual terms.

What happens when an offer lapses?

It can no longer be accepted, occurring when the offeree fails to accept within a specified or reasonable time, or if either party loses capacity.

Can an offer be revoked?

An offeror can revoke an offer any time prior to acceptance, and this must be communicated to the offeree.

What is a counteroffer?

A rejection of the original offer and a new offer made on different terms.

What is required for acceptance of an offer?

Certain and unconditional, positive communication, either verbally or by conduct.

Can silence be considered acceptance?

Generally no, unless it has been agreed upon in previous transactions.

What is a unilateral contract?

A contract where acceptance can be completed by conduct, and does not require communication of acceptance.

What is the significance of the case Carlill v Carbolic Smoke Ball Co.?

It established that acceptance can be completed by conduct and that offers can be made to an indefinite number of people.

What are the obligations of the offeror in a contract?

To fulfill the terms of the offer if accepted.

What are the obligations of the offeree in a contract?

To accept the offer and fulfill the terms as agreed.

What is consideration in contract law?

Something of value exchanged between the parties in a contract.

What does intention mean in the context of contracts?

It refers to the parties' intention to create a legal relationship and be bound by the contract.

What is the role of independent legal advice in contracts?

It ensures that both parties understand the terms and have had the opportunity to seek advice before agreeing.

What is the best practice for an offeror to prove they brought terms to the offeree's attention?

Providing a written document signed by the offeree or written notice specifying the terms.

What is the effect of an offer being communicated?

The offeree must be aware of the offer in order to accept it.

What is the difference between an offer and an advertisement?

An advertisement is typically an invitation to treat, not an offer capable of acceptance.

What happens if the offeree does not have knowledge of a term in a contract?

The offeror must prove they took reasonable steps to bring the term to the offeree's attention.

What is the significance of a thumbs up in a scenario involving an offer?

It can indicate acceptance if it is clear that the offeree understood the offer.