Exam 6: The Elements of a Contract: Consensus and Consideration

"For a contract to be binding,both parties must have a clear understanding of all the terms of that agreement." Discuss the accuracy of that statement.

What must be present in an offer before it qualifies as such?

An acceptance of an offer applies when and where it is received except when it is communicated by telephone.

Joe,a university student,parked his car near Harry's garage and went away to attend classes.Harry had noticed that there was glass on the street when he came to work that morning and was not surprised when he saw that several of the students' cars parked in that location subsequently had flat tires.He went around when he had time during the day,to each of those cars,fixed the tires and put a bill on each vehicle charging $15 for the service.Joe had come back during the day and noticed his flat tire,and when he came back that evening was grateful that it had been fixed.He went over to the garage to thank Harry and told him that he would be happy to pay the $15,but he couldn't do it until next week.In fact,he failed to pay the money,and Harry sued him for breach of contract.Explain the likely outcome.

As property manager of a 15-unit apartment block,you receive rent payments on the first of every month from each tenant.Mrs.Lone,in apartment 105,whose rent is $500 per month,lost her job and was in dire financial difficulties.You agreed to take only $400 per month.For the last ten months,she has paid only $400 a month,but you have learned that for 4 months she has had a new and even better-paying job.You are angry that she failed to tell you this and you want to sue her for the entire amount of back rent ($1000).Which of the following arguments could she use most effectively against you?

Joe contracted with Sam,agreeing to pay Sam $400 if Sam would build him a table.The essential terms included the type and quality of the wood,the dimensions,and the date of completion-February 14.The work went more easily than expected and Sam said to Joe,"If you pay me another $50,I will have this finished and be out of here by February 8." Joe agreed.If the table were done to specifications by the 8th,but Joe refused to pay anything,Sam would be entitled in law to

Why is an understanding of contract law important for a business person?

A person is required to honour a gratuitous promise if made under seal.

For the requirement of consideration to be satisfied,at least one of the parties must have performed what they promised.

When is an offer incapable of being revoked?

In the Pharmaceutical Society of Great Britain v.Boots Cash Chemists (Southern)Ltd.,case,it was decided that goods displayed on the shelf in a self-service merchandising situation were an invitation to treat rather than an offer.Discuss.

"A good example of an offer is goods placed on the shelves in a self-service merchandising situation,so long as they are clearly marked in price." Explain the accuracy of that statement.

Martin offered to buy the property for $200,000,"offer to remain open until 5:00 p.m.on Thursday,January 21st." Which one of the following situations will not cause the offer to end?

Sylvia had contracted with Produce Palace to sell her entire crop of elephant garlic (100 kilograms)and her entire crop of tomatoes (100 kilograms).On the day for delivery,Produce Palace took the garlic but not the tomatoes.In her effort to mitigate her loss,Sylvia called the owner of Val's Veggies and offered her the tomatoes at a reduced price with the words,"Let me know quickly,because they are ripe and must be moved out today." That afternoon,Val sent Sylvia a letter accepting the offer.On these facts,which is the most likely outcome?

Sam placed an announcement in the newspaper as follows: "$200 reward for the return of two lost Siamese kittens." Joe read the ad,found the kittens,and returned them.This is an example of which of the following?

In Gilbert Steel Ltd.v.University Construction Ltd.,what did the Court find on the issue of consideration?

Jones was a caterer and Smith was a florist.Jones won a contract to provide a banquet for a convention of florists.He wanted to decorate the hall with flowers.He sent a letter to Smith,describing what he wanted and asked for a price quote.Smith responded in a letter,dated January 5,offering to supply the flowers for $5000.Jones received the letter on January 10 and responded on the same date,saying his price was too high and that he would pay $4500.While that letter was in the mail,but before it had been received by Smith,Jones learned that the convention was on artificial flowers and the organizers wanted no real flowers on display.On January 13,Jones quickly sent another letter telling Smith to ignore the letter of January 10 and that he wouldn't need any flowers at this time.This letter of the 13th was received on the 18th.Smith had received the letter of January 10 on January 15.Smith sent his letter of acceptance on the same day and placed orders to his suppliers for the flowers.The letter of acceptance was received by Jones on January 20.Is there a contract between Jones and Smith? Explain.

One of the requirements in a contract is that there be an exchange of consideration between the parties.Explain what is meant by consideration.

What was significant about the case of R.v.Commercial Credit Corp.?

The owner of a new building wanted four maple trees,6 metres tall,planted on the north side of the building.Lloyd Landscaper submitted his offer of four 6-metre maples planted for $800.The owner said he would pay $600 for that.Lloyd said,for $600 he would supply four smaller,5-metre trees.The owner said,"$600 for 5-metre trees plus a Christmas tree for my kids." Lloyd was disgusted and said,"Forget it.I don't need this job." As he was leaving the owner said,"All right,I'll accept your offer of $600 for the 5-metre maples planted." Lloyd kept on walking.Which of the following is true?