Chapter 6 (LR 5)

Question 1

Contract (how is it created):

Answer 1

Set of promises (regarding rights and obligations) made; enforced by the law. Created by offer and acceptance of said offer.

Question 2

Consensus:

Answer 2

Says both parties in a contract must agree and should meet their common intention.

Question 3

Offeror:

Answer 3

Person making offer

Question 4

Offeree:

Answer 4

Person accepting or rejecting the offer.

Question 5

Offer:

Answer 5

Tentative promise including the terms

Question 6

Invitation to treat:

Answer 6

Inviting a person to make an offer to contract e.g. advertisements to offer a quote for some service that can be provided.

Question 7

Does a contract have to be written?

Answer 7

No; it can be oral as well. As long as it is communicated effectively.

Question 8

Is a person entitled to an offer if they are unaware of it prior to it being “completed” e.g. lost dog example

Answer 8

No.

Question 9

Standard-form contracts

Answer 9

Take-it-or-leave-it contract used. Used to efficiently expedite contracts. Offeree has no bargaining power

Question 10

Compare standard-form contracts for businesses vs other individuals

Answer 10

For most individuals, unusual or harm terms must be brought to their attention. In a business contract, both parties are responsible for reviewing the contract.

Question 11

What presumption can be made with a signature on a contract?

Answer 11

You have agreed to all terms and conditions.

Question 12

Lapse:

Answer 12

Termination of an offer when not excepted in a reasonable time, or if either party dies or become insane before acceptance.

Question 13

Notice of revocation

Answer 13

An offeror may revoke an offer at any time before acceptance and must provide notice.

Question 14

Option (exercising an option):

Answer 14

exception that prohibits revocation; contract to keep offer open for specified time for a sum of money.

Question 15

Rejection and counter-offer:

Answer 15

A party makes a new offer of their own, making the original offer invalid.

Question 16

What are the limitations of an offer’s acceptance, and how must acceptance be communicated.

Answer 16

Unconditional; must be communication with (positive) words or actions

Question 17

What is an exception to using positive words or actions to agree to an offer.

Answer 17

If the offeror asks you to complete a task and you do so, that is equivalent to agreeing to the offer (a unilateral contract; cannot be revoked once performance has begun).

Question 18

The four questions to analyse when a contract was made:

Answer 18

• who made contract
• when contract was comm.
• when and whom accepted offer
• when acceptance was comm.

Question 19

When a transaction is made at a distance, at what time is acceptance confirmed (snail mail vs some other method)

Answer 19

Snail mail: when dropped in the mail (unless different terms are made in the contract)
Other method: when mail is accepted (arrives in inbox)

Question 20

Revocation by post is effective only when ___.

Answer 20

Received by offeree.

Question 21

How is the jurisdiction whose laws apply to a contract decided (snail mail vs other method)?

Answer 21

Where contracted is accepted.
Snail mail: Place where acceptance is dropped in the postbox
Other method: Where the offerer receives the acceptance.

Question 22

Bilateral contract:

Answer 22

Promises are made and both parties are bound to perform later.

Question 23

Promisor:

Answer 23

Person who is under obligation to fulfull a promise.

Question 24

Promisee

Answer 24

Person with right to performance in a contract.

Question 25

How are online contracts form (name an exception):

Answer 25

Once the terms of the contract are communication, the offeree is bound once they click ‘I accept’ on their computer. The exception is if the site is designed so that the website will send a confirmation to the offeree to finalize the contract.

Question 26

Terms of a contract are enforceable only when they do not lack ___

Answer 26

certainty, clarity, etc.

Question 27

Consideration:

Answer 27

price someone pays for promise of another.

Question 28

Promise of forbearance

Answer 28

Postponing a promise but promising to make up for it.

Question 29

Gratuitous promise

Answer 29

Promise without consideration; one made without getting anything in return (not legal contracts)

Question 30

Three requirements of valid consideration:

Answer 30

• specific but not necessarily adequate
• with reference to present and future promises
• not related to past consideration

Question 31

Are courts required to assess the adequacy of consideration?

Answer 31

No.

Question 32

Past consideration:

Answer 32

A gratuitous benefit previous bestowed upon a promisor.

Question 33

When A has a contractual duty to B, any extra promise made by B to A to perform that obligation is ___ because A was contractually___

Answer 33

non-binding; bound to perform.