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Questions and Answers
A contract that is treated as a nullity due to a serious flaw is called ______.
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.
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.
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.
In a unilateral contract, the offeror makes a promise in return for an ______ to be performed by the offeree.
The case, Carlill v Carbolic Smoke Ball Company, established that an offer could be made to the ______ at large.
The case, Carlill v Carbolic Smoke Ball Company, established that an offer could be made to the ______ at large.
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.
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.
Which of the following factors may vitiate free consent?
Which of the following factors may vitiate free consent?
What is a void contract?
What is a void contract?
What defines a voidable contract?
What defines a voidable contract?
What characterizes an unenforceable contract?
What characterizes an unenforceable contract?
What is a bilateral contract?
What is a bilateral contract?
In a unilateral contract, the offeror makes a promise in return for _____ performed by the offeree.
In a unilateral contract, the offeror makes a promise in return for _____ performed by the offeree.
An invitation to treat implies a willingness to enter into negotiations without the intention to be bound.
An invitation to treat implies a willingness to enter into negotiations without the intention to be bound.
What is the outcome of the Carlill v Carbolic Smoke Ball Company case?
What is the outcome of the Carlill v Carbolic Smoke Ball Company case?
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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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