Forms of Contracts and Exceptions Quiz

Form of a Contract

• A contract can take any form, and it may be written, oral, or inferred from the conduct of the parties.
• Most contracts are simple contracts, but some contracts must be in a particular form (e.g., written) or they will be void.

Exceptions to Simple Contracts

• Bills of exchange, cheques, and the transfer of shares in a company must be in writing.
• Contracts for the sale of land must also be in writing.

Specialty Contracts

• Conveyances of land and leases for three years or more must be by deed (specialty contracts).
• Such contracts must be in writing, signed, witnessed, and delivered (intended to take effect).
• The limitation period for a contract made by deed is 12 years, and for all other contracts, it is six years.

"Subject to Contract"

• The phrase "subject to contract" means the parties are not legally bound until a contract has been executed.
• Even though the parties have agreed on terms, the matter remains in a state of negotiation.
• Either party can withdraw from the transaction without liability.

What is an Offer?

• An offer is a definite and unequivocal statement of willingness to be bound on clear specified terms without further negotiations.
• An offer can be in any form (oral, written, or by conduct), but it is not effective until it has been communicated to the offeree.
• Example: A reward offered for the return of a lost item cannot be claimed by someone who did not know of the reward before returning the item.

What is Not an Offer?

• An invitation to treat is not an offer.
• An invitation to treat means an invitation to the other party to make an offer.
• Examples of invitations to treat: most advertisements, e.g., "we may be prepared to sell".
• General rule: an advertisement is an invitation to treat, not an offer, as shown in Partridge v Crittenden (1968).
• Exception: an advertisement can be an offer if no further negotiations were intended or expected, as in Carlill v Carbolic Smoke Ball Co (1893).