3. Formation of a contract
A legally enforceable contract must have 3 elements:
2. Intention to be legally bound
3. Deed or consideration
What is being bought/sold?
Was there an OFFER and ACCEPTANCE?
NOTE: Offer + Acceptance = Agreement
Judged objectively reasonable person test
What sort of agreement is it?
Domestic not binding
NOTE: Presumptions are rebuttable.
Is it a formal or informal contract?
Formal deed = enforceable contract
Informal Is there consideration?
No unenforceable contract
Yes see below
Offer must be satisfied
1. Sufficiently complete
2. Promissory (Harvey v Facey)
3. Intention to result in a contract if accepted (Partidge v Crittenden and PSGB v Boots Cash Chemist (Southern) Ltd)
4. Addressed to a person/identified group (Carlill v Carbolic Smoke Ball Co)
5. Has the offered expired, been withdrawn or a count-offer made?
Acceptance must be satisfied
1. In the same terms as offer
2. Made while the offer is still in existence
3. Made by the person to whom the offer was addressed
4. Made in acceptable form
How was the offer accepted?
1. Instantaneous (face-to-face, fax or phone)
- Fax (N M Superannuation Pty Ltd v Baker)
2. Email similar to instantaneous – designated info system
3. Post Postal acceptance rule (Adams v Lindsell)
Presumption – not intended to be legally binding (Woodward v Johnston)
Presumption rebutted (Todd v Nicol)
Presumption –intended to be legally binding (Esso Petroleum v Commissioners of Customs and Excise and Ermogenous v Greek Orthodox community of SA Inc)
Consideration must be:
Something of value (Thomas v Thomas)
Can be a thing, money or promise
Cannot be something done or completed in the past (Stylk v Myrick)
Do I need to know all the required cases?
Yes, but you should