Commercial Law Guide

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Steps to answer question:

Offer and acceptance
To have contract, must have both offer and acceptance.
* Offer or invitation to treat? [Pharmaceutical Society v Boots; Chwee Kin Keong v Digiland] * Offer fulfilled 4 key elements? [Carlill v Carbolic Smokeball; Chwee Kin Keong v Digiland] * Clear, detailed

* Complete
* Final, no changes
* Serious intention to be bound [expressed- Carlill; implied- Kwong Kum Sum] * Acceptance by recipient rule[Entores v Miles] or postal rule[Adams v Lindsell]? * Instantaneous(recipient)

* At real time
* Back & forth
* If there’s no response, other party should be able to tell if they received or not

Intention to be bound
Establish type of relationship, assumption to intention, followed by rebuttal, if any. * Type of relationship
* Domestic, Social, Family – no intention ‘cause on grounds of love * Exceptions: no love at point of agreement [Balfour v Balfour; Meruit v Meruit] * Commercial – have intention [Edward v Skyways]

* Exceptions: comfort letters[Kleinwort Benson], extravagant advert

Consideration
Determine if consideration is good, if it isn’t, there’s no consideration, both parties not bounded by contract. Consideration must be from promisee. * Sufficiency
* Legal duties – not good consideration
* Contractual duties[Stilk v Myrick; Hartley v Posenby; Williams v Roffey(special)] * To same party – not good consideration
* To 3rd party – good consideration
* Part-payment – not good consideration[Pinnel’s; Foakes v Beer; Jagat Singh] * Exception: Promissory estoppels[High Trees]
* Promissory estoppels – purely for defence[Combe v Combe] * Existing contract
* Promise related
* Promise relied upon
* Promisor can’t go back on promise

Vitiating Factor
Breach of contract Repudiation; put an end but can’t rewind; right is always there
Vitiating Factor Rescission; put an end and rewind; right can be lost * Identify type of vitiating factor
* Material misrepresentation
* Illegality – Statutory or Common law
* Effect of vitiating factor
* Remedy

Material misrepresentation
* Made before or at time of contract
* Statements relevant?
* Opinion[Bisset]
* Silence
* Intention[Edgington]
* Made known to innocent party[Re Northumblerland; Peek v Gurney] * Relied by innocent party

* Fraudulent misrepresentation
* Rights to rescind
* Rights to damages
* Tort of Deceit
* Criminal action – relevance
* Negligent misrepresentation[Derry v Peek]
* Rights to rescind
* Rights to damages
* Depends on conduct of parties
Innocent misrepresentation[Oscar Chess]
* Rights to rescind
* Rights to damages

Illegality
* Statutory illegality
* Identify correct contract[Tokyo Investments; Siow Soon Kim] * Identify illegality
* The law forbid the act[Betting act]
* The law forbid the contract[Arms & Explosives act]
* The law forbid the purpose[Common Gaming House act]
* The law forbid the performance[Environmental Public Health act] * Identify conduct of parties where relevant
* What if one of the parties doesn’t know?[Archbold v Spanglett; Hughes v Liverpool] * Common law illegality
* Affects moral or societal values (e.g. prostitution related acts) * Restraint of trade clauses
* Legitimate interest to be protected (for employer)
* Buyer of business; trade secrets[Fosters & sons]; client information[Home Counties Dairies] * Reasonable between parties
* Duration[Fitch v Dewes]; geographical area[Office Angels; Foster & Sons]; scope * Reasonable to public
* Monopoly
* Effect of clause
* Part of clause void entire clause void
* Clause void contract invalid
* Contract void or discharged, clause not valid...
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