1. What are the 3 essential elements of contracts?
    The parties must have an intention to create legal relations.

    They must reach a mutal agreement through the process of offer and acceptance.

    They must enter into a bargain by each giving consideration.
  2. What is an intention to create a legal relaionship?
    A reasonable person would believe that the parties intended to create a legally enforcable agreement.
  3. Why is the test for intention to create legal relations objective and not subjective?
    A person could lie at trial.

    The law of contracts aims is to protect reasonable expectations.
  4. When might an intention to create a legal relationship not occur?
    A reasonable person ignores unrealistic/exaggerated propsals.

    Intention to create a legal relationships exist in a commercial context, but not between friends or family.
  5. What is an offer?
    An indication of a willingness to enter into a contract on certain terms.
  6. What is an invitation to treat?
    Indication of willingness to recieve an offer.
  7. How might an offer cease to exist?

    Lapse of time

    Death or insanity


    Counter offer
  8. What is revocation?
    If the offeror withdraws an offer.
  9. What is a lapse of time?
    • Possible to state that acceptance must occur by specific date.
    • If no time period stated, offer only open for a "reasonable period."
  10. What is death or insanity?
    • Automatically revoked if offeror/offeree dies.
    • Deceased's estates may communicate acceptance.
    • Same for insanity.
  11. What is rejection?
    • Offeree refuses offer.
    • Cannot be accepted later if offeree changes mind unless offeror repeats the offer.
  12. What is a counter offer?
    • Offeree responds to an offer by indicating a willingness to enter contract but on different terms.
    • Previous offer is now void.
  13. What is the postal rule?
    Acceptance communicated in a non-instaneous way is effective where and when offeree sends it.
  14. When does the postal rule apply?
    The contract is created as soon as the acceptance is in mailbox.
  15. Who is an offeror?
    The party who offers to enter into a contract.
  16. Who is an offeree?
    • The party who receives an offer to enter into a contract.
    • (the one who accepts or declines)
  17. What is a firm offer?
    When an offeror promises to hold an offer open to acceptance for a certain period.
  18. What is an option?
    When the offeror is paid to hold an offer open to acceptance for a certain period.
  19. What is a tender?
    An offer to undertake a project on particular terms.
  20. What is a battle of the forms?
    When each party claims to have entered into contract on the basis of its own standard form document.
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