Contract Law Basics

Study Notes

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.

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.

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.

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.

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.

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 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.

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.

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.

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.

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.