Law-Formation of Contract

1. formation of contract

introduction

* A contract is a promise, agreement or a set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.

* Contract law facilitates and regulates the practice of voluntarily and mutually undertaking obligations with respect to future behaviours.

Finding agreement

* The offer and acceptance approach requires the following elements:

* Offer – a promise to be met by an acceptance

* Acceptance – another promise that must be in agreement with the offer with respect to the same thing

* Certainty & Completeness – the agreement must be sufficiently certain and complete

* Intention to Create Legal Relations – parties must have intended to be involved with the agreement

* Consideration – supported by an idea of reciprocity

I. offer

* An offer is a manifestation by the offeror (whether orally, in writing, or by conduct) of a willingness to be bound by the terms proposed to the offeree as soon as the offeree signifies acceptance to the terms.

* Proposal of the terms of the exchange

* And intimation of the willingness to be bound

* Confers power on the offeree to bind the offeror into a contract as soon as the offeree accepts

* An offer can be invalidated because it was [1] mistakenly made (mistaken offers), [2] not a legal offer (invitations to treat) and [3] no longer a valid offer at the time of the purported acceptance.

1. objectivity and mistaken offers

* Determination of an offer is subject to an objective test of the parties’ intentions and is by how an honest and reasonable person would interpret the conduct of the offeror, thus protecting honest and reasonable expectations.

1A. KNOWS OF THE OTHER PARTY’S MISTAKE

* Smith v. Hughes (1871)

* A agrees to buy oats from a farmer, believed them to be old oats after inspecting a sample. When oats turned out to be new and...