1. Offer vs Invitation to treat 2. Knowledge of offer vs response to an offer 3. Acceptance vs communication of acceptance 4. Requirements of termination of an offer a. Revocation b. Reasonable time c. Rejection v counter offer d. Conditional offer 5. Bilateral vs unilateral offer 6. Certainty of terms a. Indefiniteness b. Incompleteness c. Agreement to negotiate 7. Clauses a. Subject to contract b. Conditional contracts i. Conditions precedent to formation vs conditions precedent to performance ii. Waiver of conditions 8. Enforceability of agreements a. Intention to create a legal relationship i. Family, domestic + social agreements ii. Commercial agreements b. Consideration i. Bargain vs gratuitous promise ii. Past consideration is no consideration iii. Pre-existing legal duty vs pre-existing practical duty iv. Promise to pay more than is due v. Promise to accept less than is due vi. Modernization of the doctrine of consideration c. Promissory estoppel d. Privity ELEMENTS OF A CONTRACT General Notes 1. Implied v express terms 2. When can we use the reasonableness standard? 3. Nature of consideration 4. The courts are slow to invalidate a contract for uncertainty where the parties have agreed workable criteria (a formula, objective standard or machinery e.g. arbitration) for resolving the matter left unresolved. If the parties fail to agree or if their designated machinery for ascertainment breaks down, the court may be able to step in and apply the formula/standard. They can do so unless the designated machinery is essential (i.e. they weren’t content to leave the task to the court or another 3rd party and don’t intend to be bound unless the gap is filled by their stipulated machinery) 5. Terms: ad idem (meeting of the minds), quantum meruit (as much as it is worth), non est factum (a plea used, when a party mistakes the terms of the contract), res ipsa loquitur 6. Offers don’t last forever. If they aren’t accepted, they cease to exist through: revocation, lapse of time (offers stand for a reasonable time. Courts determine this by looking at market volatility, industry standard etc), death/insanity, rejection, counter off 7. Option: a contract in which the offeror is paid in exchange for a binding promise to hold an offer open for acceptance for a specific period 8. Firm offers can be revoked at any time (because there is no contract yet and nothing is legally enforceable). However, a firm offer can’t be revoked if the promise was placed under seal or if it was an option. 9. Tenders: offer to undertake a project on particular terms. 10. Battle of the forms: when each party claims to have entered into a contract on the basis of its own standard form document. 11. Executed (already performed) vs executory (not yet performed) 12. Bilateral contract (when a promise is exchanged for a promise) vs unilateral contract (when an act is exchanged for a promise) 13. Unilateral contracts: a. no contract exists until the offeree fully performs (and an offeror can revoke at any time…this creates potential problems) b. Offeree must have intention of accepting the offer (can’t gain the benefit simply be fulfilling the contract by accident) 1. Offer versus Invitation to Treat Notes: i. Invitation to treat: not an offer but an indication of a willingness to receive an offer. Distinction between an invitation to treat and an offer = an objective test (reasonable person). ITT Offer Grant Canadian Dyers Carlill Gibson Lefkowitz Goods on display Giving it to cashier Boots v Pharm ITT Offer R v Dawood ITT Offer Sanchez Lopez Offer Acceptance Grant v Province of New Brunswick Offer vs invitation to treat Potato farmer Grant responds to a govt scheme for the purchase from farmers of excess potatoes, which set out certain terms and conditions for qualification. Grant followed all terms and conditions and his potatoes were destroyed but the govt refused to pay him on the ground that there was some question as to whether the potatoes were truly his. To avoid the contract, the govt claimed that the application to be filed out by the farmers was not an offer to purchase, but rather an invitation to treat. Grant argued to the contrary, positing that the application was an offer, and his subsequent conduct was its acceptance. He also stressed that apparent intent is what counts in the formation of a contract. For Contract: Against Contract: 1. Offer = govt form, acceptance = Grant’s 1. Grant filling out form was an offer to conduct sell (Govt) 2. Grant had detrimental reliance 3. Reasonable person test would’ve believed it was an offer 4. It was a unilateral offer to a specific group Court: Test of offer vs invitation to treat = a reasonable person test, not a subjective one (what the offeror intended it to mean) No waiver limiting acceptance of potatoes in the application Canadian Dyers Association v Burton C price quote by itself = invitation to treat Dyers association wants lowest price Purchaser: wrote to the seller, asking for a price quote for a property. Seller replied with ‘the lowest price’. P wrote back for a better price. Seller replied, ‘the last price I gave you is the lowest I am prepared to accept. If it were any other party I would ask for more.’ This was treated as an offer by P, and they sent a cheque as deposit, asking for a deed to be prepared. Seller’s lawyer sent a draft deed, saying he’d be ready to close shortly after. Seller wrote again, claiming that as there was no binding contract, he was no longer prepared to sell. P took action, claiming that P’s words (being more than a simple quotation of price – the second price quote was a statement of readiness to sell to the P at the price already named) and actions (lack of responding with ‘there’s no contract’) went further than an invitation to treat and expressed intent to create a binding contract. For Contract: Against Contract: 1. D’s actions + words went beyond an invitation to treat. Key words ‘(The price I quoted is the lowest I’m prepared to accept.) If it were any other party, I would ask for more’. Without this, it was not an offer. Court: Mere quotation of price = invitation to treat; Courts will look at it in the language + context used + subsequent actions, whether it’s part of an offer: o ‘If this were any other party, I would ask for more’ o Retention of the cheque, sending the draft deed Acceptance: P sending the deposit cheque Alternative viewpoint: cheque = offer, sending of draft deed = acceptance Certainty: don’t have to be 100% sure, just believe what the reasonable person would believe Carlill v Carbolic Some Ball Co, 1893 (Unilateral Contracts) F: Carbolic Smoke Ball published an advertisement, offering to pay 100 pounds to any person who contracted influenza while using the Carbolic Smoke Ball. Mrs. Carlill saw the ad, bought the product and used it as directed. When she later came down with the flu, she claimed to be entitled to 100 pounds but the company refused to pay, saying there was no contract because she hadn’t told them that she had accepted their offer and was using their product. For Contract: Against Contract: 1. To bypass unfairness of a unilateral contract (where is Mrs. Carlill could perform the contract to 99% and be told the offer was revoked), the judge could state that the advertisement contained offers for 2 unilateral contracts: a. 1 contract: 100 pounds to anyone who falls sick despite using the ball b. 1 contract: company’s promise not to revoke its offer once a customer begins using the ball. J: 1. contract was unilateral: the company, as offeror, had implicitly dispensed with the usual need for the communication of acceptance. 2. In order to amount to an offer, must be shown that the offeror had the intention to be bound. 3. Advertisements are generally invitations to treat, but in some cases as here, they can amount to an offer 4. Offer was to the whole world, anyone who performs conditions is accepting Gibson v Manchester City Council XC Tenant wants to buy council house Gibson was a tenant of a house owned by Manchester. G completed a form on purchasing the house and returned it, requesting price information. Manchester wrote G of the price, ‘This letter shouldn’t be regarded as firm offer of a mortgage. If you would like to make a formal application to buy your house please complete the enclosed application form and return it.’ Gibson complete the form (relying on it as an unconditional acceptance of M’s offer to sell), except for the purchase price and sent it to M. The Labor party came back to power and halted house sales. Gibson was told he couldn’t complete the purchase. He claimed he relied on the offer and renovated the house. For Contract: Against Contract: 1. Complex discussion of price + 1. Language of the form clearly numerous memos expressed that it wasn’t an offer (this 2. Price listed in letter letter shouldn’t be regarded as a firm 3. conduct = both parties operated on offer of a mortgage’. belief that P bought the house 4. agreement on all material terms + intention for them to be binding = contract Court: No offer = no acceptance. M’s words were invitations to treat o May sell o Application o Not a firm offer Retail goods on display : when does ITT become offer? Lefkowitz v Great Minneapolis Surplus Store C Ad that’s clear + no room for negotiation = offer Sale on fur clothes D placed 2 ads, one selling fur coats ‘worth to $100’ and the second for scarves ‘selling for $89.50’ + another item, all for $1 each, and all first come, first served.