L2--Law of contract

1.Definition: an agreement enforceable by law

2.Formation: by communication, by conduct, and in written form
3.Elements: offer/proposal, acceptance, consideration, intention, free consent,
capacity and certainty

Offer:
1). When one person signifies to another his willingness to do or to abstain from
doing anything, with a view to obtaining the assent of that other to the act or
abstinence, he is said to make a proposal.

2). A proposal must be a definite promise to be bound provided certain specifies terms
are accepted. The promisor (offeror) must have declared his readiness to undertake an
obligation upon certain terms, leaving the option of its acceptance or refusal to the
offeree, the person to whom the offer is made.

3). Proposal Must Be Clear and Communicated(oral,written and conduct)--The

communication of a proposal is complete when it comes to the knowledge of the
person to whom it is made

4.Invitation to treat:
Circular and advertisement ， Display of Goods, Auction, Company Prospectus,
Catalog
1). Display of goods:The display of goods in a shop/self-service shop are an invitation
to treat. The customer makes the offer to the cashier by presenting the goods at the
service desk. The cashier accepts the offer by scanning the goods and requesting
payment.

Facts of the case:

The defendant adapted one of the shops into a self service shop. A customer on
entering was given a basket and can select items displayed on the shelves, put them in
the basket and take them to the cash counter. At the counter, there was a registered
pharmacist who was authorised if necessary to stop a customer from removing any
drugs from the shop.
The Judgement:
Display the medicine on the shelf was only an invitation to treat.
An offer to buy was made when the customer place the article in the basket and
bring it to the cashier
The contract therefore would only be made at the cahier’s desk.
The shop owner had not made an unlawful sale.

2). Advertisement:
Advertisement are usually invitations to treat, which allows sellers to refuse to sell
products at prices mistakenly marked.  Advertisements can also be considered offers
in some specific cases. 

Unless the ads come with the willingness of the advertisee to perform certain
condition~ its consider as an offer.
Any acceptance made will create a unilateral contract.

3).Supply of Information:
Prospective sellers sometimes provide details of what they may sell without any
intention of making a proposal to be legally binding.

Whether a statement falls into this category or is a proposal, is not always easy to
decide.

4). Auctioneer’s invitation for bids:

The ads of an auction is not an offer to hold but an invitation to treat.

Auctions are sometimes invitations to treat which allows the seller to accept bids and
choose which to accept.

However, if the seller states that there is no reserve price or the reserve price has been
met, the auction will be considered an offer accepted by the highest bidder.

5. TERMINATION OF PROPOSAL
1). Accept-or Fails to Fulfil a Condition Precedent
A person who is the accept-or must fulfil a condition before he/she can accept the
offer. Ex: students must pass EILTS exam, then only he/she can get admission.

2). Rejection
Express rejection– when the offeror have knowledge about the notice of rejection.
Implied rejection– the offeree make a counter offer.
Once a proposal is rejected, the proposal is terminated.
An attempt to accept a proposal on new terms not contained in the proposal is a
rejection of the proposal accompanied by a counter offer.

Counter offer:
--an offer made in response to a previous offer by the other party during negotiations
for a final contract.
--Making a counter offer automatically rejects the original /prior offer.
--It requires an acceptance under the terms of the counter offer or there is no contract.
--A promise/ offeree who make such an attempt cannot later accept the original
proposal.
--The proposal is ter-minated by the counter offer. The offeree put some additional
terms during acceptance.
--An attempt to accept the proposal on a new terms not contained in the proposal.

3).Revocation:撤销
--Revocation cannot be made if the acceptance is completed.
--Revocation is possible, if the acceptance is not complete.
--Section 5(1) , CA : A proposal may be revoked at any time before the
communication of its acceptance is complete against the offeror, but not afterwards.
--Section 6, CA : A revocation of an offer must be communicated in order to be
effective (complete).

When the communication of revocation is completed? Its complete at 2 different

times: (Postal rule)
--As against the person who makes the revocation (offeror)
The communication of revocation is complete when it is put in the course of
transmission of the person to whom it is made.
--As against the person to whom it is made (acceptor)
when it comes to his knowledge.

4).Lapse of Time:
5).Death of a party or Mental Disorder:
--A proposal is revoked by the death or mental disorder of a proposer, if the fact of his
death or mental disorder comes to the knowledge of the acceptor before acceptance.
--If the acceptor has no knowledge about the death of the offeror, the contact is valid
and enforceable.

6. Reciprocal Promise:相互承诺
--When a contract consists of reciprocal promises to be simultaneously performed, no
promisor need perform his promise unless the promisee is ready and willing to
perform his reciprocal promise.
--A and B contract that A shall deliver goods to B to be paid for by B on delivery.
A need not deliver the goods unless B is ready and willing to pay for the goods on
delivery.
B need not pay for the goods unless A is ready and willing to deliver them on
payment.

7. Acceptance:
1). Acceptance must be absolute and unqualified
--If the parties are still in the process of negotiation, there is no question of an
agreement.
2). Acceptance must communicated
--Acceptance must be expressed in some usual and reasonable manner, unless the
proper prescribes the manner in which it is to be accepted.
3). Act of Acceptance
--The acceptor must act positively in communicating the acceptance.
--Silence cannot constitute acceptance.
4). Exceptions:
Gen rule: acceptance must be communicate, so it must be brought to the notice of the
proposer. There are 2 exceptions:

--Acceptance Through Post (Postal Rule)

If the parties agreed to use post as a mean of communication, then the acceptance is
complete when the acceptor post his letter of acceptance

Communication of an acceptance is complete as against the offeror when it is put in a

course of transmission to him so as to be out of the power of the offeree.

The communication of an acceptance is complete against the acceptor, when it comes

to the knowledge of the proposer

When the acceptor posts his letter of acceptance, the proposer is bound to perform his
obligation, even though the proposer has yet / does not know about the acceptance
(the letter does not reach the proposer/delay)

When the acceptor posts his letter of acceptance (LOA), he is not bound to perform
his obligation until his LOA is received by the proposer.

--Acceptance Through Performance of an Act Stated in the Proposal

In some cases, the acceptance need not to be communicated to the proposer. The
fulfilment of the condition stated in the proposal by the acceptor is considered as
sufficient acceptance
The performance of the conditions of a proposal is an acceptance of the proposal.

Revocation of acceptance:
--A proposal may be revoked at any time before the communication of its acceptance
is complete as against the proposer but not afterwards.
--The letter of acceptance and the letter of revoking the acceptance which were sent
by express, and were received simultaneously. The ct held: the acceptance had been
effectively withdrawn and there was no contract.

L3--Contract Law
1. Important elements of contract：
1). Legal and illegal consideration:
Consideration: The essence of the consideration is subject to the parties. They will
agree on the amount of consideration and the manner of performing it.
An agreement without consideration is void.
When, at the desire of the promisor, the promise or any other person has done or
abstained form doing or promises or to do or abstain from doing something, such act
or abstinence or promise is called a consideration for the promise.

--Executory consideration: when a promise is made in return for another promise.

--Executed consideration: One promise made in return for the performance of an act.
--Past consideration: A promise made in return for an act that has already been
performed
Exceptions to the Rule of Consideration:
--Agreement made on account of natural love and affection
--Agreement to Compensate a Past Voluntary Act
--Agreement to Pay a Statute=Barred Debt