Contract Law Basics
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Contract Law Basics

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Questions and Answers

A contract that is treated as a nullity due to a serious flaw is called ______.

void

A contract that one party can avoid or affirm is known as a ______ contract.

voidable

An ______ contract is valid but cannot be enforced in a court of law.

unenforceable

In a unilateral contract, the offeror makes a promise in return for an ______ to be performed by the offeree.

<p>act</p> Signup and view all the answers

The case, Carlill v Carbolic Smoke Ball Company, established that an offer could be made to the ______ at large.

<p>world</p> Signup and view all the answers

A contract is a legally binding agreement. For an agreement to be binding, it must satisfy the requirements for a valid contract: Meeting of the minds between the parties, consideration, and _____ to create legal relations.

<p>intention</p> Signup and view all the answers

Which of the following factors may vitiate free consent?

<p>All of the above</p> Signup and view all the answers

What is a void contract?

<p>A contract that is treated as nullity by law due to a serious flaw.</p> Signup and view all the answers

What defines a voidable contract?

<p>A contract that is valid when made but one party has the right to avoid it.</p> Signup and view all the answers

What characterizes an unenforceable contract?

<p>A contract that is valid and legally binding but cannot be enforced.</p> Signup and view all the answers

What is a bilateral contract?

<p>A contract where both parties make promises to each other.</p> Signup and view all the answers

In a unilateral contract, the offeror makes a promise in return for _____ performed by the offeree.

<p>An act</p> Signup and view all the answers

An invitation to treat implies a willingness to enter into negotiations without the intention to be bound.

<p>True</p> Signup and view all the answers

What is the outcome of the Carlill v Carbolic Smoke Ball Company case?

<p>The court held that an offer could be made to the world at large and constituted a unilateral offer.</p> Signup and view all the answers

Study Notes

Types of Contracts

  • Void Contracts: Treated as null due to serious flaws, leading to no legal effect.
  • Voidable Contracts: Initially valid but can be voided by one party due to induced circumstances. The affected party can choose to continue or terminate the contract.
  • Unenforceable Contracts: Valid and legally binding but cannot be enforced in court.

Types of Contractual Relationships

  • Bilateral Contracts: Involves mutual promises; one party's promise is exchanged for another's.
  • Unilateral Contracts: Involves a promise from the offeror in exchange for an act performed by the offeree; acceptance occurs upon the complete performance of the act.

Elements of an Offer

  • Offers must contain the specified terms of exchange.
  • There must be a clear indication of the offeror's willingness to be bound by the agreement.
  • The offer must grant the offeree the power to bind the offeror upon acceptance, preventing revocation of the offer.

Unilateral Offers

  • A unilateral offer consists of a promise in exchange for the performance of an act.
  • Public offers often take the form of unilateral contracts.
  • Case Law: Carlill v Carbolic Smoke Ball Company (1893) established that offers can be made to the public and still be binding. The court ruled that the company's advertisement constituted a unilateral offer when it promised payment for using their product correctly and still falling ill.

Valid Contract Requirements

  • A contract is a legally binding agreement requiring several key elements to be valid.
  • Consensus ad idem: There must be a meeting of the minds between parties, demonstrated through offer and acceptance.
  • Consideration: Parties must offer something of value and intend to create legal relations.
  • Capacity: All parties must possess the legal capacity to contract.
  • Free consent: Agreement must not be obtained under duress or undue influence.
  • Legality: The contract must not be illegal or against public policy.
  • Factors such as mistake, misrepresentation, and duress can undermine free consent.

Types of Contract Status

  • Void contracts: Treated as nullities due to serious issues or flaws.
  • Voidable contracts: Initially valid but one party has the right to annul due to misrepresentation or duress.
  • Unenforceable contracts: Legally binding but cannot be enforced in court.

Bilateral vs. Unilateral Contracts

  • Bilateral contracts involve mutual promises made by both parties.
  • Unilateral contracts consist of one party's promise in exchange for an act by the other; acceptance occurs through performance.

Offer Essentials

  • An offer is a definite proposal to contract, made with the intention of becoming binding upon acceptance.
  • Key elements of an offer include:
    • Clearly stated terms of exchange.
    • Willingness to be bound upon acceptance.
    • Granting the offeree the power to bind the offeror by accepting the offer.

Unilateral Offers

  • A unilateral offer is a promise made in exchange for an act, with acceptance occurring through complete performance of that act.
  • Such offers can be made to the general public and are usually considered unilateral.

Invitation to Treat vs. Offer

  • An invitation to treat indicates a willingness to negotiate, not a binding offer.
  • There is no intention to create a legal obligation until the offer is formally made and accepted.
  • Courts evaluate the intention behind a proposal by assessing the words and conduct of the proposing party.

Landmark Case

  • Carlill v Carbolic Smoke Ball Co (1893): Established that a unilateral offer can be made to the public, where performance of specified conditions creates a binding contract.

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Related Documents

Offer and Acceptance.pdf

Description

This quiz covers the fundamentals of contract law, focusing on the distinctions between void, voidable, and unenforceable contracts. Understand how these terms apply to contractual relationships and the rights of the parties involved. Test your knowledge on bilateral contracts and their enforceability.

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