Tips
1. Draw a flow diagram to help
2. Language
a. It could be argued…
b. Therefore, it is likely that…
c. Rule: A counter-offer is where…
Identifying Issue
Contract Law: promise that is legally binding, offer and acceptance
Consumer protection: low quality/faulty/unsafe products, unfair ads that deceive
Law of tort: negligence, causes another physical or mental injury, property damage
Law of business organisations: partnerships
Issues: read question carefully to see what type of issues (usually contractual =
offer/acceptance/counter-offer
Is it an invitation to treat? Mere puffery?
Is it a valid contract?
Is acceptance before revocation?
Is it a counter-offer?
Is it an options contract?
Did Paul/Sally accept his offer?
Contract = invitation to treat/offer/mere puff?
Usually, AD is offer/invitation to treat?
Week 1: Legal system
Definition: law is a body of rules that is enforceable by the state
Difference from non-legal rules:
i) source: law is made by parliament and courts
ii) sanctions: state-backed sanctions
Week 2: Law of contract
Offer
Definition: clear, unconditional and capable of acceptance (Carlill v Carbolic Smoke Ball)
Definition: proposal to enter into a contract that a reasonable person would interpret the
offeror as willing to be legally bound in the case of acceptance (Carlill)
Compare to invitation to treat:
→ offer: clear intention to be bound or just a willingness
Reasonable person would probably conclude… Harry’s language also suggests…
,Law:
1. Offer can be made to person/s, class, ‘world at large’ (Carlill v CSB)
2. Offer must be communicated (R v Clarke)
a. Offeree not aware or does not act in response to offer = no contract (R v
Clarke)
3. Revocation must occur before acceptance for it to be effective (Byrne v Tienhoven)
4. Offer lapses when counter-offer is made
a. Definition: counter-offer is a proposal to change one or more of the material or
important terms of the original offer (ie. price, quantity, quality) = offer lapses
= offer terminated = no contract
b. Not material/important term = likely request for info/clarification (Hyde v
Wrench)
c. Lapses: not accepted within time stated, ‘reasonable time’ (offer still open/not
lapsed/revoked), dies/incapacitated before acceptance
5. Request for info
a. Definition: Statement of info/Neither rejection nor counter-offer (offer
survives/still open + could be accepted) (Stevenson Jaques v McLean)
i. E.g. changed his mind, thinks if he decide to sell at a price
Acceptance
6. Conditional acceptance
a. Definition: condition met before contract (Masters v Cameron)
7. Acceptance may be implied by conduct (Empirnall v Machon Paull Partners)
8. Silence by offeree cannot amount to acceptance (Felthouse v Bindley)
9. Acceptance must be communicated
a. Formed when, and at the place where, the offeror receives communication of
acceptance (Brinkibon v SSS)
10. Acceptance must follow the directions (if any) set out in the offer
11. Acceptance can only be made by the party to whom the offer was made
12. Acceptance must be made within the time prescribed or if not time then within a
reasonable time
13. Unilateral contracts - made to world at large - acceptance by performance (Carlill v
Carbolic Smoke Ball)
14. Postal acceptance rule - acceptance when letter is posted, not when it is
communicated
Mere puffery
Definition: some ads, with statements that are not meant to be taken seriously/exaggerated
(Leonard v PepsiCo)
→ Not offers, can’t accept
,Invitation to treat
Definition: most ads, invite public/person(s) to make an offer/negotiate/is a willingness to
negotiate to see whether agreement can be reached (Pharmaceutical Society of GB v Boots)
→ other party makes the offer, and this is accepted/rejected = yes/no contract
Options agreement
Definition: keep an offer open for a specified period of time (Goldsborough Mort v Quinn)
- Requires consideration
- Rights: offer cannot be revoked during this time and must remain open, if it is
revoked, party can receive damages
Compare: mere promise (if no consideration)
Electronic address
(ETA)
Designated email address:
Definition: given, not randomly found
When communicating by email, communication is effective when received (capable of being
retrieved, regardless of being read/opened)
Non-designated email address:
Definition: randomly found
Acceptance is effective when aware that email has been sent AND capable of being
retrieved, does not have to be read/opened.
Week 3: Law of Contract 2
Intention to create Legal Relations
- Requirement
- Dispute = objective test = whether reasonable person say there was an intention to
make contract
, Traditional Approach
1. Domestic/family/social = not intend (Balfour v Balfour)
a. Presumption rebutted if clear intention to be bound (Merritt v Merritt). Likely a
reasonable person may decide there was an intention to be legally bound and
that there is sufficient evidence to rebut the presumption, including… (e.g.
significant transaction $500,000, all terms agreed on, a $10,000 deposit,
inconvenience + cost occurred to a party)
2. Commercial = intend (Malago v AW Ellis)
a. Presumption rebutted if indicate contrary ie. no intention to be bound (rare)
(Rose & Frank v Crompton)
3. Rebutted if evidence e.g. cost and inconvenience (Todd v Nicol)
Modern Approach
1. Objective/neutral test: Surrounding circumstances + determine clear intention to be
bound (Ermogenous v Greek Orthodox Community HCA)
a. Burden on proving that intention exists depend on party seeking to enforce
agreement (Ermogenous v Greek Orthodox Community HCA) (Ashton v
Pratt)
2. Govt policy proposals = not promise unless commercial
Consideration
Definition: something of ‘value’/ ‘price’ (money/act/promise to do or not do something) in
exchange for promise/act by the promisee OR “price” in return for the promisor’s promise
(does not need to be money; can be an act, forbearance or promise)
1. Required for every simple contract (except formal=deed/contract under seal)
2. Enforceable promise = promisee conferred a benefit to promisor/suffered a detriment
3. Must be of ‘sufficient value’ need not ‘adequate’ (‘peppercorn’ Thomas v Thomas)
4. Not uncertain/illusory/vague (Govt promise to pay a subsidy “of an amount or at a
rate determined by the Commonwealth from time to time” = Placer v Commonwealth)
(“forgive debt you owe me if you stop complaining” = White v Bluett)
5. Move from promisee (in exchange for promise)
a. Usually moves to promisor but not necessarily (Dunlop v Selfridge - not in
book)
6. Executed/executory but not past
a. Executed = promise in exchange for act (Carlill)
b. Executory = promises only exchanged + neither performed (Thomas v
Thomas)
c. Past = contract done, then promise made (Roscorla v Thomas)
7. Performing existing contract/public duty is not consideration (Collins v Godefroy)
1. Draw a flow diagram to help
2. Language
a. It could be argued…
b. Therefore, it is likely that…
c. Rule: A counter-offer is where…
Identifying Issue
Contract Law: promise that is legally binding, offer and acceptance
Consumer protection: low quality/faulty/unsafe products, unfair ads that deceive
Law of tort: negligence, causes another physical or mental injury, property damage
Law of business organisations: partnerships
Issues: read question carefully to see what type of issues (usually contractual =
offer/acceptance/counter-offer
Is it an invitation to treat? Mere puffery?
Is it a valid contract?
Is acceptance before revocation?
Is it a counter-offer?
Is it an options contract?
Did Paul/Sally accept his offer?
Contract = invitation to treat/offer/mere puff?
Usually, AD is offer/invitation to treat?
Week 1: Legal system
Definition: law is a body of rules that is enforceable by the state
Difference from non-legal rules:
i) source: law is made by parliament and courts
ii) sanctions: state-backed sanctions
Week 2: Law of contract
Offer
Definition: clear, unconditional and capable of acceptance (Carlill v Carbolic Smoke Ball)
Definition: proposal to enter into a contract that a reasonable person would interpret the
offeror as willing to be legally bound in the case of acceptance (Carlill)
Compare to invitation to treat:
→ offer: clear intention to be bound or just a willingness
Reasonable person would probably conclude… Harry’s language also suggests…
,Law:
1. Offer can be made to person/s, class, ‘world at large’ (Carlill v CSB)
2. Offer must be communicated (R v Clarke)
a. Offeree not aware or does not act in response to offer = no contract (R v
Clarke)
3. Revocation must occur before acceptance for it to be effective (Byrne v Tienhoven)
4. Offer lapses when counter-offer is made
a. Definition: counter-offer is a proposal to change one or more of the material or
important terms of the original offer (ie. price, quantity, quality) = offer lapses
= offer terminated = no contract
b. Not material/important term = likely request for info/clarification (Hyde v
Wrench)
c. Lapses: not accepted within time stated, ‘reasonable time’ (offer still open/not
lapsed/revoked), dies/incapacitated before acceptance
5. Request for info
a. Definition: Statement of info/Neither rejection nor counter-offer (offer
survives/still open + could be accepted) (Stevenson Jaques v McLean)
i. E.g. changed his mind, thinks if he decide to sell at a price
Acceptance
6. Conditional acceptance
a. Definition: condition met before contract (Masters v Cameron)
7. Acceptance may be implied by conduct (Empirnall v Machon Paull Partners)
8. Silence by offeree cannot amount to acceptance (Felthouse v Bindley)
9. Acceptance must be communicated
a. Formed when, and at the place where, the offeror receives communication of
acceptance (Brinkibon v SSS)
10. Acceptance must follow the directions (if any) set out in the offer
11. Acceptance can only be made by the party to whom the offer was made
12. Acceptance must be made within the time prescribed or if not time then within a
reasonable time
13. Unilateral contracts - made to world at large - acceptance by performance (Carlill v
Carbolic Smoke Ball)
14. Postal acceptance rule - acceptance when letter is posted, not when it is
communicated
Mere puffery
Definition: some ads, with statements that are not meant to be taken seriously/exaggerated
(Leonard v PepsiCo)
→ Not offers, can’t accept
,Invitation to treat
Definition: most ads, invite public/person(s) to make an offer/negotiate/is a willingness to
negotiate to see whether agreement can be reached (Pharmaceutical Society of GB v Boots)
→ other party makes the offer, and this is accepted/rejected = yes/no contract
Options agreement
Definition: keep an offer open for a specified period of time (Goldsborough Mort v Quinn)
- Requires consideration
- Rights: offer cannot be revoked during this time and must remain open, if it is
revoked, party can receive damages
Compare: mere promise (if no consideration)
Electronic address
(ETA)
Designated email address:
Definition: given, not randomly found
When communicating by email, communication is effective when received (capable of being
retrieved, regardless of being read/opened)
Non-designated email address:
Definition: randomly found
Acceptance is effective when aware that email has been sent AND capable of being
retrieved, does not have to be read/opened.
Week 3: Law of Contract 2
Intention to create Legal Relations
- Requirement
- Dispute = objective test = whether reasonable person say there was an intention to
make contract
, Traditional Approach
1. Domestic/family/social = not intend (Balfour v Balfour)
a. Presumption rebutted if clear intention to be bound (Merritt v Merritt). Likely a
reasonable person may decide there was an intention to be legally bound and
that there is sufficient evidence to rebut the presumption, including… (e.g.
significant transaction $500,000, all terms agreed on, a $10,000 deposit,
inconvenience + cost occurred to a party)
2. Commercial = intend (Malago v AW Ellis)
a. Presumption rebutted if indicate contrary ie. no intention to be bound (rare)
(Rose & Frank v Crompton)
3. Rebutted if evidence e.g. cost and inconvenience (Todd v Nicol)
Modern Approach
1. Objective/neutral test: Surrounding circumstances + determine clear intention to be
bound (Ermogenous v Greek Orthodox Community HCA)
a. Burden on proving that intention exists depend on party seeking to enforce
agreement (Ermogenous v Greek Orthodox Community HCA) (Ashton v
Pratt)
2. Govt policy proposals = not promise unless commercial
Consideration
Definition: something of ‘value’/ ‘price’ (money/act/promise to do or not do something) in
exchange for promise/act by the promisee OR “price” in return for the promisor’s promise
(does not need to be money; can be an act, forbearance or promise)
1. Required for every simple contract (except formal=deed/contract under seal)
2. Enforceable promise = promisee conferred a benefit to promisor/suffered a detriment
3. Must be of ‘sufficient value’ need not ‘adequate’ (‘peppercorn’ Thomas v Thomas)
4. Not uncertain/illusory/vague (Govt promise to pay a subsidy “of an amount or at a
rate determined by the Commonwealth from time to time” = Placer v Commonwealth)
(“forgive debt you owe me if you stop complaining” = White v Bluett)
5. Move from promisee (in exchange for promise)
a. Usually moves to promisor but not necessarily (Dunlop v Selfridge - not in
book)
6. Executed/executory but not past
a. Executed = promise in exchange for act (Carlill)
b. Executory = promises only exchanged + neither performed (Thomas v
Thomas)
c. Past = contract done, then promise made (Roscorla v Thomas)
7. Performing existing contract/public duty is not consideration (Collins v Godefroy)
