ContractsSimple contracts

ObjectivesAt the end of the class you should be able to:O Define the term contractO Accurately describe the elements of

a contract covered in classO Accurately apply the elements of a

contract covered to given cases.

Definition OA contract is an oral or written legal binding agreement between two or more parties.

Characteristics OOfferOAcceptanceOConsiderationOCapacityOLegalityO Intention to create legal

relationship

CharacteristicsO PossibilityO Genuineness of consent

Offer O This is a proposal or bid made by

one person to anotherO e.g. Stacy I am selling my car for

$5,000 do you want to buy it.

Your Turn

OOn your own create a simple scenario that shows an offer

Offer RulesOCan be: oral, written or

impliedO If it is made by post it is

effective once it reaches the offeree (NOT when it is posted)

OCan only be withdrawn before acceptance

Invitation to treatOInvitation to come and

make an offerOEg. Goods being displayed

on a shelf in a storeOAdvertisements in news

paper

CASE AO  Partridge v Crittenden [1968] a

man was arrested and charged for advertising for sale in a newspaper “protected birds”

O What do you think happened?

AnswerOCase thrown out as a

display is not seen as an offer

CASE BO The following Ad. Appeared in a

newspaper.I will offer for sale at a public auction for 2014 Honda CRV

November 3, 2016

Macy saw the advertisement and drove to the venue.

She was disappointed to hear that the

vehicle is no longer being sold

she threatened to sue as she accepted the offer that was made

ACCEPTANCEO A full and complete approval of the

terms of the offer. This must not alter the original offer in any way.

O Any change in the original offer is a counter offer.

O A counter offer REJECTS the original offer

AcceptanceO Must be made the in the way that

the offeror asked.

O If by post it is effective when it is posted. Not when it is received

O Silence does not mean consent.

Case CO Andrea has a phone selling for

$4000, Justin has shown some interest in the phone and sent Andrea this message

O “I am interested in buying the phone you have. If I do not hear back from you by Tuesday I will deem it a yes and post the money to you.”

O Andrea sold the phone to someone else and Justin is threatening to sue

ConsiderationO This refers to the item of value given up

by each party for the contract. Each party must make a sacrifice in return for the benefit of the contract

O Mart offered Allison $200 for a pen she has. She accepted his offer

O the $200 represents Mart’s consideration and the Pen which Allison gave up was her consideration

Intention to Create Legal Relations

OThis is very important to a contract as it is assumed social arrangements have no intention to create legal relationships. When consideration is involved on both sides (especially money ) then intention to create legal relations is assumed

Capacity O This speaks to the person’s legal

ability to enter into a contract this is normally in relation to

O AgeO Mental ability

Wrap up O A contract is _________________O An offer is ___________________O What is a counter offer

_____________O What effect does the counter offer

hasO Can silence mean consent

Case DOSue offered Mark her car to be sold

for $200 Mark responded by saying yes he wanted the car but he would buy it for $150. Mary comes by while they were talking and said she was willing to buy the car for 200, Sue gave up the keys and accepted the money. Mary is threatening to sue

OCreated by P. Bowen