pptweek 4 1contractintro_4 2agreement_W

1、es Text Chapter 131Creation of a simple contract6Elements of a simple contract5The law of contractsContract definedA contract can be defined as:“An agreement concerning promises made between two or more parties with the intention of creating certain legal rights and obligations upon the parties to t

2、hat agreement which shall be enforceable in a court of law.”4Contract v.AgreementContract & Agreement distinguishedTerms contract and agreement are often used to mean the same thing.Traditional definition of contract is:a legally enforceable agreementAn agreement is NOT necessarily a contract.3Contr

3、acts - Introduction”Contracts are a fundamental part of peoples daily lives and form the basis of commercial law.”Some basic examples: sales contracts buying, eg, food employment contracts going to work rental contracts leasing a flat2TASMANIAN SCHOOL OF BUSINESS AND ECONOMICSBFA141 CommercialTransa

4、ctionsWeek 4 Law of Contracts:4.1 Introduction Text Chapter 124.2 Agreement between the Partid as void.2Classification of contractsContracts void unless in writingFor certain types of simple contracts to be valid and enforceable they are required by statute to be wholly in writing.If not, they are v

5、oid, such as: bills of exchange and promissory notes; cheques and payment orders; hire purchase contracts; and real estate contracts.12Classification of contractsFormal or simple contract?11Classification of contractsContracts classified by formation: Express Contracts - wholly in writing, wholly or

6、al or combination ofthe two; all the terms are agreed upon. Implied Contracts - look at the circumstances surrounding the acts or conduct of the parties. Quasi-contracts - an obligation imposed by law on a person, usually to pay money to another on equitable grounds.10Classification of contractsCont

7、racts classified by performance: Executed contracts - where both parties have completed their respective obligations at the time of making the contract. Executory contracts - relating to an agreement where at least one of the parties promises to do, or refrain from doing, something in the future.9Cl

8、assification of contractsContracts classified by enforceability: Unenforceable - valid on its face but no legal action can be brought on thecontract, often because of a procedural defect. Illegal - the purpose of the contract contravenes a statute or the common law, and generally treate8Classificati

9、on of contractsContracts classified by enforceability: Valid - a contract which the law will enforce. Voidable - the contract remains valid and binding unless and until it is repudiated by the injured party. Void - no legal rights or obligations from the outset (void ab initio).73Agreement18Introduc

10、tion Unless the parties are in agreement, a contract cannot come into existence. Many reasons why it is important to establish if parties have reached agreement. Traditional approach - Agreement needs: Minimum of two parties (can be more) Offer to be bound (made by offerer) + Unqualified acceptance

11、communciated by offeree to offeror O and A match = Meeting of minds (consensus ad idem). Alternative means of reaching an agreement conduct, Fig. 13.1:17Week 2.2 Law of Contracts: Agreement between the Parties Ch 13On completion of this topic, you should be able to: explain why it is important to es

12、tablish whether the parties have reached an agreement explain what an agreement is in a traditional sense explain what other techniques the courts use to discover whether the parties have reached an agreement where the traditional approach cannot be applied list and explain the rules relating to off

13、erdistinguish between an offer and an invitation to treat explain the ways in which an offer may be terminated list and explain the rules relating to acceptance explain the operation of the postal rule explain what amounts to instantaneous communication16and describe what rules applyContracts and e-

14、commerceFeatures of the Electronic Transactions legislation include: A transaction is not invalid because it took place wholly or partly electronically; A requirement to give information in writing can be satisfied electronically; Electronic signature is acceptable if certain requirements are satisf

15、ied; Electronic form is equivalent to hard copy; Recoding of information in electronic form is equivalent to hard copy; Establishing time and place of dispatch.15Contracts and e-commerceThe Electronic Transactions Acts provide a legal framework to encourage businesses and consumers to use electronic

16、 commerce by providing that the law shall treat electronic and paper- based commerce equally.14Classification of contractsContracts which must be in writingThere are some contracts which are unenforceable unless evidenced in writing.The absence of writing does not affect their validity, but it makes

17、 them unenforceable in a court.This is a requirement of proof which dates back to the Statute of Frauds 1677 (Imp).See eg Mercantile Law Act 1935 (Tas) s 6Sale of Goods Act 1896 (Tas) s 9 re goods $20134The conventional approach: rules relating to offer Tenders and their advertisement Requests for i

18、nformation Statements of intention Advertising puffs Goods placed on shop shelves and in shop windows Goods/Services advertised in catalogues or newspapers, or on radio, television or the Internet Price lists, circulars and catalogues. Consider the impact of the ACL on the making of offers.24The con

19、ventional approach: rules relating to offer In determining if there is a valid offer, there must be: Intention or willingness to be bound Firm promise Communication of offer (writing, orally, conduct) May be made to one or more persons May be kept open (if consideration)/options All terms must be br

20、ought to notice of offeree and followed May be terminated.Statements or actions that are not offers include: Invitations to treat Auctions (with/without reserve)23AgreementAgreement arising by conductAgreement may be established by implication arising from conduct of the parties: Clarke v Earl of Du

21、nraven and Mount-Earl 1897 competitors in a boating regatta Raguz v Rebecca Sullivan & Ors (2000) athletes promised to abide by the competition rules Brambles Holdings Ltd v Bathurst City Council (2001) one party charged a fee for a service that was in dispute: implied acceptance by conduct22Agreeme

22、ntGenerally characterised by an offer by one party and an acceptance by another.Important in determining the time, place and contents of the agreement.21Step 1:Istherean agreement between the parties? Integrated Computer Services Pty Ltd v. Digital Equipment Corp (Aust) Pty Ltd (1988): Contracts may

23、 be inferred Azzi v. Volvo Car Australia Pty Ltd 2007: Essential terms must have been agreed upon Agreement does not have to go into detail, as long as it can be said that a reasonable person would believe that an offer had been made or that the parties had reached an agreement. Agreement presumes e

24、qual bargaining power: Where pressure used by stronger party is unconscionable, courts may set aside contract: see Ch. 18. Even non-contractual agreement may result in breach of ACL (e.g. ss 18 or 29): see Ch. 24.20Step 1:Istherean agreement between the parties?Approaches to determining agreement Of

25、fer + Acceptance = Agreement Exceptions hard to locate offer/acceptance (Vroon BV v. Fosters Brewing Group 1994; Brambles Holdings Ltd v. Bathurst City Council (2001): Transportation of passengers on mass public transport (MacRobertson Miller Airline Services v. Commr of State Taxation (WA) (1975) C

26、ompetitors in a regatta (Clarke v. Earl of Dunraven and Mount-Earl 1897) Exchange of contracts to sell land (Gibson v. Manchester City Council 1979). Air Great Lakes 1985: Effect of a document on contract19nduct)5Rules relating to offerAuctionsWith a reserve price: the auctioneer calling for bids is

27、 not makingan offer but is asking for offers from prospective purchasers.With no reserve price: the auctioneer becomes the offeror andmust sell the goods to the highest bidder.30Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd 1953 1 QB 40129Rules relating to offerInvitat

28、ions to treat can include: auctions; advertisements; catalogues / Internet; price lists; goods in shop windows and shelves (Pharmaceutical Society of Great Britain v Boots Cash Chemist); Advertising goods on the Internet (unless limited to one or more specific parties)But probably excludes: Automati

29、c vending machines Self serve petrol stationsThe intention of the parties and commercial reality and28practicality are paramount hereRules relating to offerStatements that are not offersAn offer must be distinguished from an invitation to treat: This is an offer to consider offers or to start the of

30、fer process and cannot create an agreement if there is a purported acceptance. At this stage the party making the invitation never intended to be bound The person responding to the invitation is the person who makes the offer27Rules relating to offerRules as to offersThere must be: A final intention

31、 or willingness to be bound; a firm promise; and communication of the offer (in writing, orally or by co26AgreementAs offer-acceptance approach does not always work, the Courts have taken a global approach by examining the acts and conduct of the parties.- Integrated Computer Services Pty Ltd v Digi

32、tal Equipment Corp (Aust) Pty Ltd (1988)- Air Great Lakes Pty Ltd v K S Easter (Holdings) (1985) binding contract found despite the many indications to the contrary in the documentation- Azzi v Volvo Car Australia Pty Ltd (2007) - intention found despite the fact that is wasnot possible to identify

33、at any one given time an offer and an acceptance25.6Termination of offerRevocation (Withdrawal) To be effective, withdrawal by the offeror must be brought to the notice of the offeree before acceptance, although the offereecan learn of the withdrawal directly or indirectly:- Dickinson v Dodds (1876)

34、 same as- Byrne & Co v Leon Van Tienhoven & Co(1880)36Termination of offer35Rules relating to offerTerms in the Offer Any terms contained in the offer must be brought to the notice of the offeree. Any and all conditions must be strictly followed e.g. reply by fax only34Rules relating to offerOptions

35、 To keep an offer open for a specified time (an option), it must be supported by consideration usually an option fee.- Goldsborough Mort & Co Ltd v Quinn(1910)33Rules relating to offerNotice of the offerThe offer must be communicated to offeree/s The offer may be directed to one person, a group of p

36、eople, or the world at large- Carlill v Carbolic Smoke Ball Co. (1893) See much more about this case at: http:/www.directly2u.co.uk/carbolic32Rules relating to offerTenders Tenders are not normally offers unless the tender states its exact needs, as distinct from what it may only require.Requests fo

37、r Information A request for information is not a firm promise and so is not an offer. Nor does it destroy the offer as it is only an attempt to elicit information see Harvey v Facey (1893)31in7Rules relating to acceptanceAcceptance must be communicated Acceptance must be communicated to the offeror,

38、 either by words or by conduct. Mental acceptance, unless communication has been waived by the offeror (e.g. if you do not hear from me before Friday consider the goods mine, is insufficient: Felthouse v Bindley (1862) Other exceptions: Prior dealings; Where the offeree has signed an agreement indic

39、ating acceptance until further notice e.g. club memberships; Conduct (eg,Carlill); Postal Rule (see later)42Rules relating to acceptanceAcceptance must be strictly accordance with the terms of the offer If the offeror specifies a method of acceptance it must be followed:- Gilbert J McCaul (Aust) Pty

40、 Ltd v Pitt Club Ltd (1954)41Rules relating to acceptanceAcceptance be made in reliance of the offer The offeree must intend to accept the offer. R v Clarke (1927): information given that led to the arrest and conviction of the real criminals by a person wrongfully arrested for the crime. Motivation

41、 was not the offer of a reward but to save himself from the charge.40Termination of offerLapse by failure of a condition If the offer is subject to a condition and the condition is not fulfilled, then the offer will lapse. A condition precedent, must be satisfied before the agreement can ripen into

42、a contract. If not met, the offer will lapse. For example, in a contract for sale of real estate: a subject to finance; or subject to building inspection, clause. A condition subsequent can terminate the contract on occurrence of an event stated by the parties. eg, Money back guarantee: If you are n

43、ot completely satisfied, return the car within seven days and get your money back.39Termination of offerLapse of TimeNon-acceptance within: a reasonable time (will depend on the facts of each case and the nature of the subject matter of the contract a stipulated time or death of either party before

44、acceptance will terminate the offer - Carter v Hyde (1923)38Termination of offerRejection or Counter-Offer Refusal by the offeree or a counter-offer by the offeree will terminate the offer:- Hyde v Wrench (1840)378Online ContractsA proposal to form a contract is considered an invitation to treat (s1

45、5B) unless made to one specific person.An online contract is formed when the buyer accepts the conditions by clicking I accept or I agree, then proceeds.Most online sellers will have terms and conditions relating to sales that define what constitutes the offer, who makes it and how it is accepted.48

46、Rules relating to acceptanceNon-Instantaneous communicationsIn cases of agreements facilitated by means of the Internet or email, communication is not instantaneous but may be routed through multiple communication systems.The rule that applies for telephone/fax communications probably still applies with the fo