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Unit 3.1 Formation of a Valid contract - Coggle Diagram
Unit 3.1 Formation of a Valid contract
Chapter 23 - Nature of a Contract
Bilateral contracts
Bilateral contracts require both parties to preform an action. It is known as a reciprocal agreement.
An example of one is that one party offers to sell a product and the other agrees to buy it.
Collateral Contracts
These are contract made verbally or can be written down which are secondary to the main contract but stans independently to them.
They are made to make adjustments to the main contract for example adding new terms or correcting errors in the main contract. It can also be used to add a third party into the contract.
An example could be making a contract with a car dealer that after you have brough the car they will valet it once a month for £30 for six months but it is all set out in a separate contract.
Unilateral contracts
These are one sided contract which are often given out as rewards and used in advertisements.
The case Carlill v Carbolic smoke ball co ltd is a case example of a unilateral contract.
An offer of a unilateral contract is often given through an advertisement which requires an action. In this case the advertisement is the offer and the action is the acceptance.
It is difficult to revoke unilateral contracts once the offeree has began to preform the action.
Agreement and Formation of a valid contract.
A contract is an agreement made between two or more parties which is enforceable through law.
For contract to be viable it requires an offer, acceptance, consideration, intention and contractual capacity.
There are three different types of contracts which are unilateral, bilateral and collateral.
Chapter 24 - Offer and acceptance
Application of the rules
Acceptance
Overview
This is the positive and unqualified confirmation of all the terms of the offer.
Without acceptance of the contract it isn't and valid contract.
It is key to ensure it doesn't get confused with counter offers, requests for further information and whether it has been sufficiently communicated.
There must be communication of the offer
Principles and evidence
Certainty
Offers made must be certain. There should be no element of doubt in the offer.
If the offeree is unsure about what they are accepting then that is unfair on them.
Clifton v Palumbo 1944 is the key case for this.
Counter offers
If a counter is made then the original offer has been rejected.
A counter offer will change the terms of the existing offer.
A key case for this is Hyde v Wrench 1840
Communication of offers
Offers must be clearly communicated to the offeree.
Anyone that has had the offer communicated to them and is actually aware of it can accept it.
In cases of unilateral contracts this is seen regularly.
Requests for information
Any requests made for extra information by the offeree doesn't amount to a counter offer.
It is often dependent on how the statement is phrased.
Stevenson v McLean 1880 is the key case for this.
Offer vs Invitations to treat
Invitations to treat are all around us. An example is items on shelves in shops and more.
Offers are made when people take items to the checkout counter.
Typically advertisements are invitations to treat.
The case Partridge v Crittenden 1968 is a case relating to that.
Fisher v Bell shows us that goods on shop shelves are invitation to treat.
They can also be confused for statement of price.
Termination of an offer
This can occur anytime before the acceptance of the offer.
Periods of time set for acceptance aren't nescerccarily binding.
Revocation must be clearly communicated to offeree clearly or by a reliable third party.
Unilateral contracts can't be withdrawn in the middle of the action being preformed.
Offers
They can be made orally, in writing or by conduct and they can be made to specific indivduals, groups or to the world at large.
Offers must be Clear, precise ad capable of acceptance.
How the offer is set out is important for offers as set out in the case Harvey v Facey 1893.
They can be confused with invitation to treat.
Chapter 26 - Consideration
Chapter 25 - Intention to create legal relations
Presumption and rebuttal in different agreements
Reason for recruitment
Chapter 27 - Capacity (Minors)
Categories of contracts
Remedies against minors
Reasons for limitation and possible reform