Unit 1 Agreement and Contractual Intention PDF

**[Agreement and Contractual Intention]** [Agreement (offer and acceptance) & Invitation to treat ] +-----------------------+-----------------------+-----------------------+ | **Main Topic** | **Definition and | **Relevant Case Law** | | | Explanation** |...

**[Agreement and Contractual Intention]** [Agreement (offer and acceptance) & Invitation to treat ] +-----------------------+-----------------------+-----------------------+ | **Main Topic** | **Definition and | **Relevant Case Law** | | | Explanation** | | +=======================+=======================+=======================+ | ------------------- | A binding contract | | | ---------------- -- | requires an | | | **Binding Contract | agreement, | | | Requirements** | consideration, and an | | | ------------------- | intention for legal | | | ---------------- -- | consequences. | | | | Agreement is based on | | | | offer and acceptance. | | +-----------------------+-----------------------+-----------------------+ | **Offer and | An offer is a promise | *Smith v. Hughes* | | Acceptance** | to be bound by | | | | specific terms, | | | | communicated via | | | | letters, emails, or | | | | conduct. Intention is | | | | determined by the | | | | parties or courts. | | +-----------------------+-----------------------+-----------------------+ | **Invitation to Treat | An invitation to | *Pharmaceutical | | vs. Offer** | treat invites | Societies of Great | | | negotiations and is | Britain v. Boots Cash | | | not a binding offer, | Chemist* (1953) | | | unlike an offer which | | | | binds if accepted. | | +-----------------------+-----------------------+-----------------------+ | **Case Examples | Displayed items in | *Fisher v. Bell* | | (Invitation to | stores are | (1961), | | Treat)** | invitations to treat | | | | until payment is | *Partridge v. | | | made. Advertisements | Crittenden* (1968) | | | are generally | | | | invitations to treat. | | +-----------------------+-----------------------+-----------------------+ | **Advertisements as | Advertisements | *Williams v. | | Offers (Exception)** | offering rewards are | Carwardine* (1833) | | | considered offers in | | | | specific cases, | | | | especially with | | | | unilateral contracts. | | +-----------------------+-----------------------+-----------------------+ | ------------------- | A unilateral contract | *Carlyle v. Carbolic | | ------- | is where only one | Smokeball Company* | | **Unilateral Contra | party makes a promise | (1893) | | cts** | (e.g., rewards). A | | | ------------------- | famous case involved | | | ------- | a reward for using a | | | | product under set | | | | conditions. | | +-----------------------+-----------------------+-----------------------+ | **Authority of | The *Carlyle* case | *Carlyle v. Carbolic | | Carlyle Case** | established that an | Smokeball Company* | | | advertisement could | (1893) | | | constitute an offer | | | | to the public, | | | | creating a binding | | | | contract upon | | | | completion of the | | | | action. | | +-----------------------+-----------------------+-----------------------+ [Auction & Tenders ] +-----------------------+-----------------------+-----------------------+ | **Main Topic** | **Definition and | **Relevant Case Law/ | | | Explanation** | Statute** | +=======================+=======================+=======================+ | **Auctions** | Auctions follow a | *Barry v. Davies* | | | special rule for | (2000) | | | offer and acceptance. | | | | Per Section 57.2 of | Section 57.2 of the | | | the Sale of Goods Act | Sale of Goods Act | | | 1979, a sale by | 1979 | | | auction is complete | | | | when the hammer | | | | falls; all bids | | | | before that are | | | | offers that can be | | | | withdrawn. The | | | | auctioneer acts as an | | | | agent for the owner. | | +-----------------------+-----------------------+-----------------------+ | ------------------- | Section 57(3) of the | Section 57(3) | | ------------ -- -- | Sale of Goods Act | | | **Reserve Price in | refers to a reserve | | | Auctions** | price, the minimum | | | ------------------- | price the auctioneer | | | ------------ -- -- | may accept. It | | | | applies in auctions | | | | with reserve | | +-----------------------+-----------------------+-----------------------+ | **Auctions without | In auctions without | *Barry v. Davies* | | Reserve** | reserve, the highest | (2000) | | | bid generally leads | | | | to a binding | | | | contract. If an | | | | auctioneer refuses to | | | | accept the highest | | | | bid, they may breach | | | | a unilateral | | | | contract. | | +-----------------------+-----------------------+-----------------------+ | **Tenders** | Tenders involve | N/A | | | third-party | | | | contractors hired by | | | | a business. | | | | Businesses request | | | | tenders as an | | | | invitation to treat, | | | | with submitted | | | | tenders as offers. | | | | They can be accepted | | | | or rejected by the | | | | business. | | +-----------------------+-----------------------+-----------------------+ | **Tender Acceptance | Acceptance of a | *Harvela Investments | | and Contract | tender by the | Ltd v. Royal Trust | | Formation** | business forms a | Company of Canada* | | | contract with the | | | | contractor. | | | | Exceptions may apply | | | | when an invitation to | | | | tender does not | | | | constitute an offer. | | +-----------------------+-----------------------+-----------------------+ | ------------------- | In certain cases, | *Harvela Investments | | ------------------ -- | such as *Harvela | Ltd v. Royal Trust | | **Unilateral Contra | Investments Ltd v. | Company of Canada* | | cts in Tenders** | Royal Trust Company | | | ------------------- | of Canada*, | | | ------------------ -- | invitations to tender | | | | were deemed | | | | unilateral contracts, | | | | followed by a | | | | bilateral contract | | | | upon acceptance. | | +-----------------------+-----------------------+-----------------------+ | **Implied Promise in | In *Blackpool v. | *Blackpool v. Flight | | Tender Process** | Flight Aero Club, | Aero Club, LTD* | | | LTD* (1990), there | (1990) | | | was an implied | | | | promise to consider | | | | all timely tenders. | | | | Failing to empty the | | | | mailbox resulted in | | | | liability for damages | | | | due to lost | | | | opportunity. | | +-----------------------+-----------------------+-----------------------+ [Termination of Offer ] +-----------------------+-----------------------+-----------------------+ | **Main Topic** | **Definition and | **Relevant Case Law** | | | Explanation** | | +=======================+=======================+=======================+ | **Termination of | Offers can be | | | Offer** | terminated in three | | | | ways: **Revocation**, | | | | **Rejection by the | | | | offeree**, and | | | | **Lapse of time**. | | +-----------------------+-----------------------+-----------------------+ | **Revocation** | An offer can be | *Routledge v. Grant* | | | withdrawn any time | (1828) | | | before acceptance. | | | | Once accepted, it is | | | | irrevocable. | | +-----------------------+-----------------------+-----------------------+ | **Exception to | If consideration is | *Mountford v. Scott* | | Revocation** | provided for an | (1975) | | | option (e.g., payment | | | | to keep the offer | | | | open), the offer | | | | becomes irrevocable. | | +-----------------------+-----------------------+-----------------------+ | **Communication of | Revocation must be | *Bryne & Co. v Van | | Revocation** | effectively | Tienhoven & Co.* | | | communicated to the | (1880) | | | offeree. | | +-----------------------+-----------------------+-----------------------+ | **Advertisement | Revocation of an | *Shuey v United | | Revocation** | advertised offer must | States* | | | be publicized | | | | similarly to the | | | | initial offer. | | +-----------------------+-----------------------+-----------------------+ | **Email and | Revocation via email | *The Brimnes Case* | | Revocation** | is effective upon | (1975) | | | arrival during normal | | | | office hours. | | +-----------------------+-----------------------+-----------------------+ | **Third-Party | Revocation can be | *Dickinson v. Dodds* | | Communication** | communicated by a | (1876) | | | reliable third party. | | +-----------------------+-----------------------+-----------------------+ | **Unilateral | No obligation until | | | Contracts** | the specified act is | | | | completed; acceptance | | | | occurs when | | | | performance is | | | | completed. | | +-----------------------+-----------------------+-----------------------+ | **Revocation of | Partial performance | *Errington v. | | Unilateral | can prevent | Errington and Woods* | | Contracts** | revocation; promise | | | | may become | | | | irrevocable if the | | | | performance is | | | | underway. | | +-----------------------+-----------------------+-----------------------+ | **Rejection by | The offeree can | *Hyde v. Wrench* | | Offeree** | reject an offer | (1840) | | | explicitly or | | | | implicitly. A | | | | counteroffer is | | | | considered a | | | | rejection. | | +-----------------------+-----------------------+-----------------------+ | **Request for more | Mere request for more | *Stevenson v Mclean | | information** | information, does not | 1880* | | | affect the offer, it | | | | still stands and can | | | | be accepted (not a | | | | rejection) | | +-----------------------+-----------------------+-----------------------+ | **Lapse of Time** | An offer lapses after | | | | the stated time or | | | | after a reasonable | | | | time, based on the | | | | circumstances. | | +-----------------------+-----------------------+-----------------------+ | **Acceptance of | Acceptance must be | *Williams v | | Offer** | complete, | Carwardine*, *R. v. | | | unqualified, and | Clarke* | | | communicated. The | | | | offeree must be aware | | | | of the offer. | | +-----------------------+-----------------------+-----------------------+ | **Battle of the | Occurs when | *Butler Machine Tool | | Forms** | businesses exchange | v. Ex-Cell-O Corp* | | | terms; the final | (1979) | | | terms provided | | | | usually prevail. | | +-----------------------+-----------------------+-----------------------+ | **Contract Acceptance | When terms conflict, | *TRW Ltd v. Panasonic | | and Counteroffers** | the last set of terms | Industries Europe* | | | submitted and | (2021) | | | accepted by conduct | | | | typically governs the | | | | contract. | | +-----------------------+-----------------------+-----------------------+ | **Jurisdiction and | When conflicting | *TRW Ltd v. Panasonic | | Terms** | terms arise, | Industries Europe* | | | previously | (2021) | | | acknowledged terms | | | | may prevail. | | +-----------------------+-----------------------+-----------------------+ | **Communication of | Acceptance must be | *Entores Ltd. v. | | Acceptance** | communicated by the | Miles Far East Corp.* | | | offeree or an | (1955), *Carlill v. | | | authorized agent, | Carbolic Smokeball | | | except in unilateral | Co.* | | | contracts. | | +-----------------------+-----------------------+-----------------------+ | **Certainty and | Even though parties | *Scammell v Ouston | | Completeness** | may appear to have | (1941) -- too vague | | | made an agreement, | to be a contract* | | | courts may refuse to | | | | enforce it if there | *Hillas v Arcos -- | | | appears to be | previous dealings* | | | uncertainty about | | | | what has been agreed | *l* | | | -- judged objectively | | | | on facts judged in | | | | context | | | | | | | | - Whether parties | | | | are in the same | | | | trade | | | | | | | | - Trade usage | | | | | | | | - Whether the | | | | agreement has | | | | been acted on for | | | | any length of | | | | time | | | | | | | | Whether there is an | | | | objective mechanism | | | | for resolving any | | | | uncertainty (eg. | | | | arbitration clause) | | +-----------------------+-----------------------+-----------------------+ | **Silence and | - Silence does not | -- ---------------- | | Acceptance** | constitute | --------------- | | | acceptance; | *Felthouse v. Bi | | | offerees are | ndley* (1862) | | | protected from | -- ---------------- | | | contracts imposed | --------------- | | | by silence. | | +-----------------------+-----------------------+-----------------------+ | **Postal Rule** | Acceptance is | *Adams v. Lindsell* | | | considered complete | (1818), | | | upon posting, given | | | | specific conditions | | | | (e.g., properly | | | | stamped and addressed | | | | letter). | | +-----------------------+-----------------------+-----------------------+ | **Postal Rule -- | The postal rule may | *Household Fire and | | exceptions** | apply even if the | Carriage Accident | | | letter of acceptance | Insurance Co. v. | | | is lost or delayed in | Grant* (1879) | | | the post | | +-----------------------+-----------------------+-----------------------+ | **Postal Rule -- | The postal rule can | *Holwell Securities v | | exceptions** | be excluded either | Hughes* | | | expressly or by | | | | implication -- if the | | | | circumstances make it | | | | clear that the | | | | parties only intended | | | | acceptance to be | | | | effective when | | | | communicated | | +-----------------------+-----------------------+-----------------------+ | **Knowledge of | You must know about | *R v Clarke* | | offer** | the offer when you | | | | accept it | | +-----------------------+-----------------------+-----------------------+ | **Electronic | Electronic | *Brinkibon Ltd. v. | | Communication** | communications (e.g., | Stahag Stahl* (1983) | | | email) are often | | | | considered received | | | | during normal office | | | | hours; acceptance | | | | timing may vary based | | | | on what is | | | | reasonable. | | +-----------------------+-----------------------+-----------------------+ [Intention to create legal relations ] +-----------------------+-----------------------+-----------------------+ | ---------------- -- | **Definition and | **Relevant Case Law** | | **Main Topic** | Explanation** | | | ---------------- -- | | | +=======================+=======================+=======================+ | **Intention to Create | Courts require | | | Legal Relations** | intention for | | | | agreements to be | | | | legally enforceable. | | | | Formal requirement: | | | | agreements are often | | | | written, but oral | | | | agreements are also | | | | enforceable. Courts | | | | use rebuttable | | | | presumptions for | | | | intention, with | | | | distinctions between | | | | domestic and | | | | commercial contexts. | | +-----------------------+-----------------------+-----------------------+ | **Domestic | Presumption of no | *Belfour v. Belfour* | | Agreements** | intention to create | (1919), *Merit v. | | | legal relations in | Merit* (1970) | | | domestic (family or | | | | personal) agreements | | | | unless proven | | | | otherwise. | | +-----------------------+-----------------------+-----------------------+ | **Commercial | Strong presumption | *Edwards v. Skyways* | | Agreements** | that commercial | (1964), *Rose and | | | agreements are | Frank Co. v. Crompton | | | intended to create | Bros.* (1924) | | | legal relations. | | | | Rebuttable only with | | | | clear evidence to the | | | | contrary. | | +-----------------------+-----------------------+-----------------------+ | **Case: Belfour v. | Domestic agreement | *Belfour v. Belfour* | | Belfour** | between a husband and | (1919) | | | wife. The court | | | | presumed no intention | | | | to create legal | | | | relations. | | +-----------------------+-----------------------+-----------------------+ | **Case: Merit v. | Formal agreement | *Merit v. Merit* | | Merit** | between a husband and | (1970) | | | wife about mortgage | | | | repayment, which was | | | | intended to be | | | | legally binding. | | +-----------------------+-----------------------+-----------------------+ | **Case: Edwards v. | A commercial | *Edwards v. Skyways* | | Skyways** | agreement where an | (1964) | | | airline's ex gratia | | | | redundancy payment to | | | | a pilot was held | | | | enforceable, as the | | | | employer could not | | | | rebut the | | | | presumption. | | +-----------------------+-----------------------+-----------------------+ | **Case: Rose and | Commercial agreement | *Rose and Frank Co. | | Frank Co. v. Crompton | containing an | v. Crompton Bros.* | | Bros.** | honorable pledge | (1924) | | | clause that stated it | | | | was not legally | | | | binding, rebutting | | | | the presumption of | | | | legal intention. | | +-----------------------+-----------------------+-----------------------+