Chapter 1

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Questions and Answers

According to Blackburn J in Smith v Hughes (1871) LR 6 QB 597, when is a man equally bound as if he had intended to agree to the other party’s terms?

When he had no intention of agreeing to the other party’s terms

When the courts decide that he was assenting to the terms proposed by the other party

When a reasonable man would believe that he was assenting to the terms proposed by the other party (correct)

When the other party believes he was assenting to the terms proposed

In RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co (UK Production) UKSC 14; 1 WLR 753, what did Lord Clarke emphasize in deciding whether a contract has been concluded?

The conduct of the parties and the belief of a reasonable man (correct)

The decision of the courts

The explicit intention of the parties

The formal written agreement

Who decides whether or not the parties have reached agreement, according to the text?

A reasonable man

The legal advisors

The courts

The parties themselves (correct)

What is the crucial factor in deciding whether a contract has been concluded?

The conduct of the parties and the belief of a reasonable man Signup and view all the answers

In the context of deciding whether a contract has been concluded, what did Lord Clarke emphasize?

The conduct of the parties and the belief of a reasonable man Signup and view all the answers

According to the text, who is equally bound as if he had intended to agree to the other party’s terms?

A man who conducts himself in a way that a reasonable man would believe he was assenting to the terms proposed by the other party Signup and view all the answers

What does the objective test for the existence and scope of an agreement focus on?

What the parties said and did Signup and view all the answers

In the Centrovincial case, what did the Court of Appeal do?

Granted unconditional leave to defend the action Signup and view all the answers

What does estoppel prevent a representor from doing?

Going back on their representation Signup and view all the answers

What did Professor Atiyah argue regarding the offeree's acceptance of an offer?

The offeree can create legal rights without reliance on the offer Signup and view all the answers

In the case of The Hannah Blumenthal, what did the sellers seek to do?

Abandon the contract to arbitrate Signup and view all the answers

What is the foundation of the objective test of intention?

Principle of estoppel Signup and view all the answers

In the Hannah Blumenthal case, what was the role of reliance?

To provide evidence of the sellers' acceptance of the buyers' offer Signup and view all the answers

What did the Centrovincial case demonstrate regarding reliance and contract conclusion?

Reliance was not necessary for contract formation Signup and view all the answers

In which scenario is the objective test displaced or modified?

When the offeree knows the offeror is suffering from a mistake as to the terms of the offer Signup and view all the answers

What was the decision in Longley v PPB Entertainment Ltd regarding setting aside a contract on the ground of unilateral mistake?

Actual knowledge of the mistake was necessary Signup and view all the answers

What type of mistake must be made for a contract to be set aside?

Mistake related to the terms of the contract Signup and view all the answers

When is there no contract between the parties according to the text?

When the offeror's mistake relates to the terms of the offer or contract Signup and view all the answers

In the context of contract law, which statement best reflects the Hartog case?

The case required actual knowledge of mistake to set aside a contract. Signup and view all the answers

Which scenario aligns with the Scriven Bros v Hindley case?

Defendants bid for hemp instead of tow due to claimants' carelessness. Signup and view all the answers

In the context of subjective intentions in contract law, which view does Spencer advocate?

Spencer argues for the relevance of subjective intentions in cases of variance with objective test. Signup and view all the answers

When do subjective understandings of parties generally not prevail over objectively ascertained intention?

When both parties intend to contract to sell a cow. Signup and view all the answers

What is the key factor in setting aside a contract according to the Hartog case?

Claimant's knowledge of mistake in the case. Signup and view all the answers

When can the objective approach prevail in contract law?

When both parties intend to contract to sell a cow. Signup and view all the answers

What are the three different interpretations of the objective test in contract law?

Detached objectivity, promisee objectivity, and promisor objectivity Signup and view all the answers

Which approach considers the perspective of a detached observer or a 'fly on the wall'?

Detached objectivity Signup and view all the answers

Which interpretation of the objective test finds support in case law and interprets the words as reasonably understood by the promisee?

Promisee objectivity Signup and view all the answers

Which party in a bilateral contract is considered both a promisor and a promisee?

Both parties are considered both promisors and promisees Signup and view all the answers

In which case was the emphasis of the court on the defendants' understanding of the offer made by the auctioneer?

Scriven Bros v Hindley Signup and view all the answers

Which case provides an instructive example of the approach the courts adopt in deciding whether the parties have reached agreement?

Butler v Ex-Cell-O Corp (England) Ltd Signup and view all the answers

Study Notes

Interpreting Contracts and Objective Test in Contract Law

Lord Normand stated that when parties present a concluded contract to the court, the court can find that there was no contract.
The existence or non-existence of a contract is a question for the court and is generally decided by an objective test.
There are three different interpretations of the objective test: detached objectivity, promisee objectivity, and promisor objectivity.
The detached objectivity approach considers the perspective of a detached observer or a "fly on the wall."
Promisee objectivity interprets the words as reasonably understood by the promisee and finds support in case law.
Promisor objectivity considers the standard of the reasonable person in the shoes of the person making the offer.
The distinction between promisor and promisee objectivity has been criticized, as each party in a bilateral contract is both a promisor and a promisee.
The court could apply the perspective of one or the other contracting party, restyling the classification as "claimant" and "defendant" objectivity.
The emphasis of the court in the case of Scriven Bros v Hindley was on the defendants' understanding of the offer made by the auctioneer.
The infrequency of counterclaims by defendants means that "defendant" objectivity is most commonly considered by the courts.
The case of Butler v Ex-Cell-O Corp (England) Ltd provides an instructive example of the approach the courts adopt in deciding whether the parties have reached agreement.
In Butler v Ex-Cell-O Corp, the sellers offered to sell a machine tool on their standard terms, while the buyers sent an order on their own standard terms, leading to a dispute over the terms of the agreement.

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Test your understanding of interpreting contracts and the objective test in contract law with this quiz. Explore the different interpretations of the objective test, such as detached objectivity, promisee objectivity, and promisor objectivity, and learn about key cases that illustrate how courts decide on the existence of a contract.