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Questions and Answers
What test do courts use to determine if parties intended to form a contract?
What test do courts use to determine if parties intended to form a contract?
In which scenario is a promise most likely not considered a legally binding contract?
In which scenario is a promise most likely not considered a legally binding contract?
What is generally presumed when businesses enter into agreements?
What is generally presumed when businesses enter into agreements?
What was the ruling in the case of Balfour v Balfour regarding domestic agreements?
What was the ruling in the case of Balfour v Balfour regarding domestic agreements?
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What can happen to a contract if one party is a minor?
What can happen to a contract if one party is a minor?
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If an individual is declared legally insane, what happens to their contracts?
If an individual is declared legally insane, what happens to their contracts?
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What can nullify a contract involving a bankrupt individual?
What can nullify a contract involving a bankrupt individual?
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During a time of war, what may happen to contracts with hostile nations?
During a time of war, what may happen to contracts with hostile nations?
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In negotiations where a car is sold for $5,000, what evidence would a court consider?
In negotiations where a car is sold for $5,000, what evidence would a court consider?
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What is a common misconception regarding the legal enforceability of domestic promises?
What is a common misconception regarding the legal enforceability of domestic promises?
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Which scenario illustrates an express offer?
Which scenario illustrates an express offer?
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What is the legal effect of a company’s constitution restricting its ability to enter contracts with third parties?
What is the legal effect of a company’s constitution restricting its ability to enter contracts with third parties?
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What constitutes an invitation to treat in a retail context?
What constitutes an invitation to treat in a retail context?
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In the case of Carlill v Carbolic Smoke Ball Co, what made the advertisement a binding offer?
In the case of Carlill v Carbolic Smoke Ball Co, what made the advertisement a binding offer?
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What does puffery refer to in advertising?
What does puffery refer to in advertising?
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How is an implied offer understood in a restaurant setting?
How is an implied offer understood in a restaurant setting?
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What is an example of revocation of an offer?
What is an example of revocation of an offer?
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What happens if a person convicted of treason attempts to enter into a contract?
What happens if a person convicted of treason attempts to enter into a contract?
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What distinguishes a bid submitted in response to an invitation to tender?
What distinguishes a bid submitted in response to an invitation to tender?
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Which of the following best describes a clear and definite offer?
Which of the following best describes a clear and definite offer?
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What does a company’s constitution potentially restrict?
What does a company’s constitution potentially restrict?
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What characterizes an express offer?
What characterizes an express offer?
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In the context of advertisements, what does puffery typically mean?
In the context of advertisements, what does puffery typically mean?
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How is an invitation to treat best described?
How is an invitation to treat best described?
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What legal action can terminate an offer?
What legal action can terminate an offer?
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What is an implied offer typically demonstrated by?
What is an implied offer typically demonstrated by?
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In the case of Carlill v Carbolic Smoke Ball Co, what was the crucial element of the advertisement?
In the case of Carlill v Carbolic Smoke Ball Co, what was the crucial element of the advertisement?
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What happens to the contract rights of persons convicted of treason?
What happens to the contract rights of persons convicted of treason?
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What differentiates a bid from an invitation to tender?
What differentiates a bid from an invitation to tender?
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Which statement best describes the nature of an offer?
Which statement best describes the nature of an offer?
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What determines if a court concludes that the parties intended to create a contract?
What determines if a court concludes that the parties intended to create a contract?
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Which scenario would most likely lead to a contract being deemed legally binding?
Which scenario would most likely lead to a contract being deemed legally binding?
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In the case of Balfour v Balfour, what was the outcome regarding the promise made?
In the case of Balfour v Balfour, what was the outcome regarding the promise made?
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What is the implication of a minor entering into a contract?
What is the implication of a minor entering into a contract?
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How does mental capacity affect contracts for individuals declared legally insane?
How does mental capacity affect contracts for individuals declared legally insane?
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What might happen to a contract made by a bankrupt individual?
What might happen to a contract made by a bankrupt individual?
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What is typically presumed regarding agreements between domestic partners?
What is typically presumed regarding agreements between domestic partners?
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What does it mean for a contract to be void due to alien status?
What does it mean for a contract to be void due to alien status?
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What is an implication of an invitation to treat in a retail environment?
What is an implication of an invitation to treat in a retail environment?
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What can nullify a contract involving a foreign business during a conflict?
What can nullify a contract involving a foreign business during a conflict?
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What determines if a contract made during a domestic relationship is legally binding?
What determines if a contract made during a domestic relationship is legally binding?
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Which statement accurately reflects the treatment of agreements between companies?
Which statement accurately reflects the treatment of agreements between companies?
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What is the likely outcome for a contract made by a minor?
What is the likely outcome for a contract made by a minor?
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In which situation can a contract with a person declared legally insane be considered valid?
In which situation can a contract with a person declared legally insane be considered valid?
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Why might a contract involving a bankrupt individual be invalidated?
Why might a contract involving a bankrupt individual be invalidated?
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What is a key factor in determining the intent to create a contract between parties?
What is a key factor in determining the intent to create a contract between parties?
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What consequence might arise from a contract made during a time of war with a hostile nation?
What consequence might arise from a contract made during a time of war with a hostile nation?
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In the case of Balfour v Balfour, why was the promise between Mr. Balfour and his wife not enforced?
In the case of Balfour v Balfour, why was the promise between Mr. Balfour and his wife not enforced?
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Which of the following statements is true regarding the legal capacity of aliens in contract law?
Which of the following statements is true regarding the legal capacity of aliens in contract law?
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What role does the objective test play in contract disputes?
What role does the objective test play in contract disputes?
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Which scenario illustrates a legally binding offer?
Which scenario illustrates a legally binding offer?
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What characterizes an invitation to treat?
What characterizes an invitation to treat?
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What does puffery in advertising imply?
What does puffery in advertising imply?
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In the case of Carlill v Carbolic Smoke Ball Co, what made the advertisement legally enforceable?
In the case of Carlill v Carbolic Smoke Ball Co, what made the advertisement legally enforceable?
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Which of the following best represents an express offer?
Which of the following best represents an express offer?
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How can a contract be terminated through revocation?
How can a contract be terminated through revocation?
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Which of the following accurately describes a valid bid in response to an invitation to tender?
Which of the following accurately describes a valid bid in response to an invitation to tender?
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What is the effect of a company's constitution on its contract capabilities?
What is the effect of a company's constitution on its contract capabilities?
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What happens to a person's legal capacity to enter contracts when convicted of treason?
What happens to a person's legal capacity to enter contracts when convicted of treason?
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What distinguishes an implied offer in a restaurant setting?
What distinguishes an implied offer in a restaurant setting?
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What legal capacity issue may prevent a person from entering into contracts today?
What legal capacity issue may prevent a person from entering into contracts today?
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In which scenario is a company's invitation to tender considered an offer?
In which scenario is a company's invitation to tender considered an offer?
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Which scenario illustrates a clear contractual offer?
Which scenario illustrates a clear contractual offer?
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What is the primary distinction between an invitation to treat and a contract offer?
What is the primary distinction between an invitation to treat and a contract offer?
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What was necessary for Mrs. Carlill to establish a binding contract in her case?
What was necessary for Mrs. Carlill to establish a binding contract in her case?
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Which statement about puffery is correct?
Which statement about puffery is correct?
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How is a revocation of an offer typically communicated?
How is a revocation of an offer typically communicated?
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What legal consequence arises from a person's conviction of treason regarding their contracts?
What legal consequence arises from a person's conviction of treason regarding their contracts?
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Which example best illustrates an implied offer?
Which example best illustrates an implied offer?
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What distinguishes Carlill's case involving the smoke ball from general advertising practices?
What distinguishes Carlill's case involving the smoke ball from general advertising practices?
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What is most likely the reason a domestic promise, such as one made between family members, lacks legal enforceability?
What is most likely the reason a domestic promise, such as one made between family members, lacks legal enforceability?
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How might a court view a contract made by a minor for a purchase, such as a car?
How might a court view a contract made by a minor for a purchase, such as a car?
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What is the legal implication for a contract entered into by someone declared legally insane?
What is the legal implication for a contract entered into by someone declared legally insane?
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In what scenario can a contract involving aliens be considered valid during wartime?
In what scenario can a contract involving aliens be considered valid during wartime?
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Which factor is least likely to determine the validity of a contract with a bankrupt individual?
Which factor is least likely to determine the validity of a contract with a bankrupt individual?
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What underlying principle governs the objective test in contract disputes?
What underlying principle governs the objective test in contract disputes?
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What outcome would likely arise from a contract made during a time of peace with a previously hostile nation?
What outcome would likely arise from a contract made during a time of peace with a previously hostile nation?
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Why might a contract for supplying goods between two businesses be presumed binding?
Why might a contract for supplying goods between two businesses be presumed binding?
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What might render a contract between a father and daughter unenforceable when a promise is made based on academic achievement?
What might render a contract between a father and daughter unenforceable when a promise is made based on academic achievement?
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Study Notes
Intention
- Objective Test: Courts assess if a reasonable person would see an intent to form a contract based on evidence and context, rather than the subjective intentions of the parties.
- Domestic or Social Relationships: Promises made within familial or domestic contexts, such as a father offering $100 for an A grade, generally lack legal binding unless clear intent is established.
- Business or Commercial Relationships: Agreements between companies, like supply contracts, are presumed to have legal intent unless explicitly stated otherwise.
- Balfour v Balfour Case: Court ruled no legal binding in a domestic agreement when Mr. Balfour's promise to pay his wife was deemed non-legally binding.
Capacity
- Minors: Contracts with minors, such as a 17-year-old purchasing a car, can be voided due to lack of full contractual capacity.
- Lacking Full Mental Capacity: Contracts entered by legally insane individuals are void as they cannot comprehend the agreement.
- Aliens: Contracts involving companies from hostile nations may be void during war due to the alien status of the parties.
- Bankrupts: Individuals declared bankrupt face limitations on contracting, potentially invalidating loans not disclosed during the bankruptcy.
- Convicts: Historically, those convicted of treason lost the capacity to enforce contracts; this may apply to life sentences under current laws.
- Corporations: A company's constitutional restrictions may affect its ability to contract, but such restrictions do not invalidate contracts with third parties under current laws.
Offer and Acceptance
- Offer: A clear proposition to sell something, such as a seller stating a price for a bike, constitutes a definite offer.
- Express Offer: Direct communication of an offer, like offering $50 for lawn mowing, is an express offer.
- Implied Offer: Actions imply offers, such as ordering food at a restaurant, indicating intent to pay upon receipt.
- Invitation to Treat: A display of goods, like a laptop with a price tag, is an invitation for customers to make an offer, not an offer itself.
- Carlill v Carbolic Smoke Ball Co: The court determined an advertisement promising £100 for using a smoke ball was a binding offer due to its clarity.
Puffery
- Puffery refers to exaggerated claims in advertisements that cannot be considered binding, e.g., claiming a drink will make someone fly.
Tenders
- Tenders involve bids submitted in response to invitations to treat, like a construction company bidding for a bridge; the invitation itself does not constitute an offer.
Termination of Offers
- Revocation: An offer can be terminated by the offeror prior to acceptance, as seen when a company withdraws a product offer via public notice before orders are placed.
Intention
- Objective Test: Courts assess if a reasonable person would see an intent to form a contract based on evidence and context, rather than the subjective intentions of the parties.
- Domestic or Social Relationships: Promises made within familial or domestic contexts, such as a father offering $100 for an A grade, generally lack legal binding unless clear intent is established.
- Business or Commercial Relationships: Agreements between companies, like supply contracts, are presumed to have legal intent unless explicitly stated otherwise.
- Balfour v Balfour Case: Court ruled no legal binding in a domestic agreement when Mr. Balfour's promise to pay his wife was deemed non-legally binding.
Capacity
- Minors: Contracts with minors, such as a 17-year-old purchasing a car, can be voided due to lack of full contractual capacity.
- Lacking Full Mental Capacity: Contracts entered by legally insane individuals are void as they cannot comprehend the agreement.
- Aliens: Contracts involving companies from hostile nations may be void during war due to the alien status of the parties.
- Bankrupts: Individuals declared bankrupt face limitations on contracting, potentially invalidating loans not disclosed during the bankruptcy.
- Convicts: Historically, those convicted of treason lost the capacity to enforce contracts; this may apply to life sentences under current laws.
- Corporations: A company's constitutional restrictions may affect its ability to contract, but such restrictions do not invalidate contracts with third parties under current laws.
Offer and Acceptance
- Offer: A clear proposition to sell something, such as a seller stating a price for a bike, constitutes a definite offer.
- Express Offer: Direct communication of an offer, like offering $50 for lawn mowing, is an express offer.
- Implied Offer: Actions imply offers, such as ordering food at a restaurant, indicating intent to pay upon receipt.
- Invitation to Treat: A display of goods, like a laptop with a price tag, is an invitation for customers to make an offer, not an offer itself.
- Carlill v Carbolic Smoke Ball Co: The court determined an advertisement promising £100 for using a smoke ball was a binding offer due to its clarity.
Puffery
- Puffery refers to exaggerated claims in advertisements that cannot be considered binding, e.g., claiming a drink will make someone fly.
Tenders
- Tenders involve bids submitted in response to invitations to treat, like a construction company bidding for a bridge; the invitation itself does not constitute an offer.
Termination of Offers
- Revocation: An offer can be terminated by the offeror prior to acceptance, as seen when a company withdraws a product offer via public notice before orders are placed.
Intention
- Objective Test: Courts assess if a reasonable person would believe both parties intended to form a contract, focusing on evidence and context rather than subjective intentions.
- Domestic or Social Relationships: Agreements, such as a father's promise to pay his daughter $100 for an A grade, are typically not legally binding due to the presumed absence of legal intention in personal relationships.
- Business or Commercial Relationships: Contracts between companies are presumed legally binding unless explicitly stated otherwise, emphasizing a clear intent to create legal relations.
- Balfour v Balfour: The court ruled there was no intention to create legal relations in a domestic setup when Mr. Balfour promised his wife a monthly allowance abroad.
Capacity
- Minors: Contracts entered by minors, like a 17-year-old purchasing a car, can be voided due to their limited capacity to contract.
- Lacking Full Mental Capacity: Contracts made by individuals declared legally insane are void as they cannot understand the transaction.
- Aliens: Contracts with companies from hostile nations may be void during war periods due to the alien status of one party.
- Bankrupts: Contracts may be invalidated if a bankrupt individual fails to disclose their status when obtaining loans, reflecting legal restrictions on their capacity.
- Convicts: Individuals serving life imprisonment without parole may also lack legal capacity to enter into contracts.
- Corporations: Company constitutions may restrict certain contracts, but under current laws, restrictions do not invalidate contracts with third parties.
Offer and Acceptance
- Offer: A definitive statement from a seller, like "I will sell you this bike for $200," constitutes a clear offer.
- Express Offer: Verbal proposals, such as offering $50 for mowing a lawn, represent express offers.
- Implied Offer: Ordering food at a restaurant implicitly offers to pay for it upon service completion.
- Invitation to Treat: A price-tag display in a store serves as an invitation to treat, not a binding offer.
- Carlill v Carbolic Smoke Ball Co: An advertisement promising £100 for using a product and still getting sick was deemed a binding offer due to its specificity.
Puffery
- Puffery: Exaggerated claims in advertisements, such as "This drink will make you fly!" are not seen as binding promises, as reasonable individuals would not take them literally.
Tenders
- Tenders: A bid to build infrastructure in response to a government invitation is an offer, while the invitation itself is merely an invitation to treat.
Termination of Offers
- Revocation: An offer, such as selling discounted products, can be revoked before any orders are made, effectively terminating the offer through public notice.
Intention
- Objective Test: Courts assess if a reasonable person would believe both parties intended to form a contract, focusing on evidence and context rather than subjective intentions.
- Domestic or Social Relationships: Agreements, such as a father's promise to pay his daughter $100 for an A grade, are typically not legally binding due to the presumed absence of legal intention in personal relationships.
- Business or Commercial Relationships: Contracts between companies are presumed legally binding unless explicitly stated otherwise, emphasizing a clear intent to create legal relations.
- Balfour v Balfour: The court ruled there was no intention to create legal relations in a domestic setup when Mr. Balfour promised his wife a monthly allowance abroad.
Capacity
- Minors: Contracts entered by minors, like a 17-year-old purchasing a car, can be voided due to their limited capacity to contract.
- Lacking Full Mental Capacity: Contracts made by individuals declared legally insane are void as they cannot understand the transaction.
- Aliens: Contracts with companies from hostile nations may be void during war periods due to the alien status of one party.
- Bankrupts: Contracts may be invalidated if a bankrupt individual fails to disclose their status when obtaining loans, reflecting legal restrictions on their capacity.
- Convicts: Individuals serving life imprisonment without parole may also lack legal capacity to enter into contracts.
- Corporations: Company constitutions may restrict certain contracts, but under current laws, restrictions do not invalidate contracts with third parties.
Offer and Acceptance
- Offer: A definitive statement from a seller, like "I will sell you this bike for $200," constitutes a clear offer.
- Express Offer: Verbal proposals, such as offering $50 for mowing a lawn, represent express offers.
- Implied Offer: Ordering food at a restaurant implicitly offers to pay for it upon service completion.
- Invitation to Treat: A price-tag display in a store serves as an invitation to treat, not a binding offer.
- Carlill v Carbolic Smoke Ball Co: An advertisement promising £100 for using a product and still getting sick was deemed a binding offer due to its specificity.
Puffery
- Puffery: Exaggerated claims in advertisements, such as "This drink will make you fly!" are not seen as binding promises, as reasonable individuals would not take them literally.
Tenders
- Tenders: A bid to build infrastructure in response to a government invitation is an offer, while the invitation itself is merely an invitation to treat.
Termination of Offers
- Revocation: An offer, such as selling discounted products, can be revoked before any orders are made, effectively terminating the offer through public notice.
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Description
This quiz covers key concepts in contract law, including the intention to form a contract, the capacity of parties to enter into contracts, and significant cases such as Balfour v Balfour. You will explore the distinctions between domestic and commercial agreements, as well as implications for minors and those lacking full mental capacity.
