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1 Nature of contract 2 Elements of contract formation 3 Offer 4 Acceptance 5 Consideration 6 Intention to create legal relations 7 Capacity to contract 8 Legality of object 9 Requirement of writing 10 Contract interpretation . 1 Nature of contract. 1.1 Contract
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2 Elements of contract formation
6 Intention to create legal relations
7 Capacity to contract
8 Legality of object
9 Requirement of writing
10 Contract interpretation
(4) Intention to create legal relations
(5) Capacity to contract
(6) Legality of object
(7) Requirement of writing
(1) A tentative promise made by offeror subject to conditions or containing a request to the offeree
(2) Invitation to treat, invitation to offer
(1)Orally, or in writing, or by gesture
(2)Offer is communicated upon receipt.
(1) “See back”, “see the reverse side”, or “notices”
(2) Document provider: adequate notice to offeree. Else, invalid.
Revocation is valid.
(4) Counter offer
4.1 Positive nature
(1) Words or conduct
(1) Same or advantageous method of communication
(2) By stipulated method as per offeror’s advice
(3) Post rule (telegram)
(4) Unilateral contract: no communication
(5) Other situations
(1) Contract is formed in the place where the acceptance takes effect.
(2) Instantaneous communication: place where offeror receives acceptance
(1) Anything having market value
(1) No requirement: exchange of equal value
(2) $ 1 is adequate consideration
Adams, creditor of Brown, threatened to sue Brown for the debt of $ 1000. Cox, friend of Brown, then promised to pay Adams the debt if Adams would refrain from suing, and Adams agreed. If Cox failed to pay Adams as agreed, and Adams sued him for breach of contract, Adams would succeed.
(1) Gift promise is gratuitous, not amount to contract for lack of consideration.
(2) Promisor isn’t bound by gratuitous promise, once he undertakes the performance of it, he should do it without negligence. He is liable, if he injure the promisee.
5.5 Motive contrasted with consideration: past consideration, N
(1) Motive is irrelevant. It does not affect the question of consideration.
(1) Statutory duty: N
Police, teacher, etc.
A promise to members of crew to increase their pay if they don’t desert the ship, is unenforceable.
(1) Consideration makes debt reduction difficult.
(2) Way out
★ B agreed to reduce it to $800, in return A would repay him before March1.
★ B agreed to abandon the debt, in return A gave him something of value, e.g., a watch
★ A’s friend, C agreed to pay B $800, in return B would refrain from suing A.
★ A and B made the debt reduction agreement in writing and under seal.
6.1 Business agreement
(1) Rule: such intention is presumed present.
(2) Exception: hard evidence to prove that they are not serious.
6.2 Family, domestic arrangement
(1) Rule: such intention is presumed not present.
(2) Exception: hard evidence to prove that they are serious.
(3) Reliance cost, pre-contract fault liability
(1) Necessaries: enforceable
(3) Contract indirectly affecting minor
A minor hires a riding horse promising to handle with care. In his exuberance he injures the horse by riding too hard.
The owner can’t sue A for breach of contract for riding horse is non-necessary. He may not A for tort of negligence either. He can only sue A something outside of the contract.
(1) Unsound mind
(2) Incapacitated through drink or drugs
(3) Protection: similar to minors.
(1) It can make any contract that natural person does. Most company laws adopt this.
(2) Ultra vires: abandoned
7.4 Bankrupt debtors
(1) Under certain contractual disabilities, until he receives a discharge from the court.
8.1 Void v Illegal contract
(1) Void: restore to position before contract was attempted.
(2) Illegal contract: no remedy for plaintiff. If property has been transferred, no recovery will be allowed.
8.2 Illegal by statute
(1) smuggling, drug traffic, sex dealing etc.
(1) Contract contemplating the commission of tort, is illegal.
(2) Promise to pay witness for appearing or not appearing to give evidence in criminal procedure is illegal.
8.4 Void by statute
(1) Any provision in employment contract depriving employee’s protection of Worker’s Compensation Act.
(2) Bankruptcy Act: transfer of property by gift or at inadequate price 12 months before bankruptcy is void.
(1) Contract concerning interests in land
(2) Not to be performed by either party with 1 year
(3) Ratifying minor’s contract
(5) Arrangement made in consideration of marriage
(6) Executor’s promise to answer damages out of his own estate
10.1 Express terms
(1) Plain-meaning (strict) approach, liberal approach
10.2 Parol Evidence rule: oral evidence
10.3 Implied terms as a method of interpretation