Contract Law: Formation and Variation

How do the courts look to determination of agreement?

What is the traditional approach?

What is less than an offer?

What is a form of ITT?

What two instances mean these become offers?

When does acceptance occur?

Ways revocation of offers occurs (not always)

What else must there be for a valid contract?

What prevents someone from going back on a promise?

Requirements

Elements of economic duress

An advert promised £100 to users who still caught influenza after using the smoke ball. The advert was an offer, acceptance occurred by performance, and a unilateral contract was formed.

The council’s correspondence and conduct objectively indicated an intention to be bound in a sale of property. A contract is formed where outward words and actions show agreement, even if some details remain unresolved.

Intention is judged objectively.

Work began under a letter of intent that expired, yet both parties continued to act as if bound. A contract exists if, viewed objectively, a reasonable businessperson would think agreement had been reached despite “subject to contract” wording.

A self-service shop display was challenged as an unlawful sale of medicines. Goods on shelves are an invitation to treat, and the contract is formed at the till under a pharmacist’s supervision.

A buyer attempted to bind the seller by stating that silence would amount to acceptance. Silence cannot constitute acceptance, and a party cannot impose contractual liability by inaction.

Sailors claimed extra wages promised after two crew members deserted. A promise to pay more for performing an existing contractual duty is unsupported by consideration.

Half the crew deserted, making the remaining sailors’ task significantly more dangerous. A promise of extra payment is enforceable where the promisee undertakes duties beyond the original contract.

A contractor promised additional payment to avoid delay and penalty charges. A promise is enforceable if the promisor obtains a practical benefit and there is no economic duress.

A creditor accepted part-payment from one joint debtor and later sought the full amount. Promissory estoppel may arise where a creditor voluntarily accepts part-payment and it would be inequitable to go back on the promise.

A landlord reduced rent during wartime and later claimed full rent retrospectively. Promissory estoppel can suspend rights, making the promise binding during the conditions under which it was made.

A 30-year supply relationship existed without an express contract or explicit assurance. No long-term contract could be implied and promissory estoppel cannot create a contract where none previously existed.

A debtor paid instalments under a promise that no further interest would be claimed. Part-payment of a debt does not discharge the whole because it lacks consideration, reaffirming Pinnel’s Case.

A shipbuilder demanded an additional 10% during construction, and the buyer paid without protest for months. Continuing performance without objection affirms the contract, defeating a later claim of economic duress. Extra legal consideration sufficed

A contract was negotiated by telex, raising the question of where acceptance occurred. Acceptance by instantaneous communication is effective when and where it is received.

Special circumstances must be communicated