CHAPTER 4

CONSENSUS AS
BASIS FOR
CONTRACTUAL
COMMITMENT

MAKING
CONCEPT INTENTION TO BE
INTENTION
KNOWN
OF CONTRACTUALLY
BOUND
CONSENSUS

COMMON
INTENTION
 CONSENSUS /
TRUE AGREEMENT
= BASIS FOR EVERY
CONTRACT

(C) EVERY PARTY

MAKES INTENTION
CONSENSUS CAN
KNOWN TO EVERY
MOSTLY BE REVEALES
OTHER PARTY BY
BY EXTERNAL
MEANS OF
MANIFITATIONS
DECLARATION OF
INTENTION

CONSENSUS
AS BASIS FOR
CONTRACTUAL
COMMITMENT
(B) PARTIES HAVE
COMMON
CONSENSUS CAN
INTENTION, MUST
BE REACHED ONLY
HAVE SAME
IF:
COMMITMENT IN
MIND

(A) EVERY 1 OF THE

PARTIES HAS
SERIOUS INTENTION
TO BE
CONTRACTUALLY
BOUND
 EVERY PARTY MUST
HAVE SERIOUS
INTENTION TO BE
CONTRACTUALLY BOUND

INTENTION TO BE
CONTRACTUALLY
BOUND
STATEMENT MAKE
WHERE PARTIES HAVE
JOKINGLY / TO
INTENTION TO REACH
HIGHLIGHT GOOD
UNDERSTANDING / MAKE
QUALITIES OF
ARRANGEMENT BASED ON
AGREEMENT (PUFFING)
GOOD FAITH,
= GENERALLY NOT MADE
ARRANGEMENT WILL GIVE
WITH INTENTION OF
RISE TO 'GENTLEMAN'S
CREATING LEGALLY
AGREEMENT' AND NOT
ENFORCEABLE
BINDING CONTRACT
OBLIGATIONS
 PARTIES MUST
AGREE TO
CONTRACTUAL
OBLIGATIONS /
COMMITMENTS
WISH TO CREATE

COMMON
INTENTION

COMMON
INTENTION TO
CONTRACT WITH
EACH OTHER &
MUST INTEND TO
CREATE SAME
LEGAL
RELATIONSHIP
 CONSENSUS CAN
ONLY EXIST IF
PARTIES ARE
MUTUALLY AWARE
OF 1 ANOTHER'S
INTENTION

MOST COMMON
METHOD TOT
DETERMINE IF ALL PARTIES MUST
CONSENSUS BE AWARE OF TRUE
REACHED - LOOK FOR AGREEMENT
OFFER &
ACCEPTANCE OF IT MAKING
INTENTION
KNOWN

EXISTENCE OF 2
INDEPENDENT BUT
WRITING, ORALLY / CORRESPONDING
MEANS OF CONDUCT INTENTIONS
CANNOT CRATE
CONTRACT
 CONCDPTS OF
OFFER &
ACCEPTANCE

SPECIAL RULES WRT

OFFER &
OFFER & REQUIREMENTS
FOR OFFER &
ACCEPTANCE ACCEPTANCE ACCEPTANCE

FALLING AWAY OF
OFFER
 REACHING OF
CONSENSUS
REQUIRES EVERY
PARTY DECLARE
INTENTION TO
CREATE
ENFORCEABLE
RIGHTS & DUTIES

ACCEPTANCE =
DECLARATION BY
OFFEREE -
CONCEPTS USUAL WAY MAKE
INTENTIONS
INDICATED AGREES
TO TERMS OF
OF OFFER & KNOWN = OFFER &
ACCEPTANCE
OFFER EXACTLY AS
PUT IN OFFER
ACCEPTANCE

OFFER =
DECLARATION
MADE BY OFFEROR
- INDICATES
INTENTION TO BE
BOUND BY MERE
ACCEPTANCE
 OFFER MUST BE
MADE WITH
INTENTION THAT
OFFEROR WILL E
LEGALLY BOUND
BY ACCEPTANCE
BY OFFEREE

OFFER OF
OFFER MUST BE
ACCEPTANCE MUST
COMPLETE
BE COMMUNICATED

REQUIREMENTS
FOR OFFER &
ACCEPTANCE
OFFER MUST BE
ADDRESSED TO
PARTICULAR
OFFER &
PSERON /
ACCEPTANCE
PERSONS/ IN
MUST BE CLEAR &
GENERAL TO
CERTAIN
UNKNOW PERSON /
PERSONS/ GENERAL
PUBLIC OFFER & ACCEPTANCE
MAY BE MADE
EXPRESSLY (WRITING /
ORALLY) / TACITLY BY
MEANS OF CONDUCT
(NOD OF HEAD,
MOVEMENT OF
HAND/HANDING
OVER OF MONEY)
 IF OFFER
STIPULATES THAT IS
VALID FOR CERTAIN
PERIOD OF TIME - IF
NO TIME LIMIT,
EXPIRES WITHIN
REASONABLE TIME

IF BEFORE
IF OFFERER /
ACCEPTED, OFFERER
OFFEREE DIES
INFORMS OFFEREE
BEFORE OFFER IS
THAT REVOKES
ACCEPTED
FALLING OFFER

AWAY OF
OFFER

IF OFFEREE MAKES
IF OFFEREE REJECTS
COUNTEROFFER -
OFFER (CANNOT BE
COUNTEROFFER IS
REVIVED)
NEW OFFER
 OFFEROR CAN
ENSURE
CONTINUED
EXISTENCE OF
OFFER BY MEANS
OF OPTION

OFFEREE AGREES TO
2ND OFFER - OFFEROR
BOUND SUBSTANTIVE
CONTINUED SUBSTANTIVE
OFFER FOR PERIOD -
MY NOT REVOKE /
EXISTENCE OFFER: OFFER TO
CONCLUDE
CONCLUDE WITH
OTHER PERSON
OF OFFER: PARTICULAR
CONTRACT
REGARDING SAME
OBJECT
THE OPTION

OPTION: FURTHER
OFFER TO KEEP 1ST
OFFER OPEN FOR
SPECIFIED PERIOD
 INVITATION TO
MAKE OFFER

SPECIAL
AUCTIONS
RULES WRT STATEMENTS OF
INTENT
OFFER &
ACCEPTANCE

CALLING FOR
TENDERS
 NOT TRUE OFFER

INTERNET TRADER'S
ADVERTISEMENT /
VIEWPOINT:
DISPLAY DOES NOT
UNWANTED OFFERS -
CONSTITUTE OFFER =
REJECT WITHOUT
INVITATION TO DO
FURTHER LEGAL
BUSINESS
ONSEQUENCES
INVITATION
TO MAKE
OFFER

WEBSITE NOT
REGARDED AS OFFER
CLIENT = OFFEROR
= INVITATION TO DO
BUSINESS
 REFERS TO
DOCUMENT IN
WHICH PARTY
INDICATES
INTENTION TO
CONTRACT, AS
OPPOSED TO
OFFERING TO
ACTUALLY DO SO

STATEMENTS
OF INTENT

MERELY FORMS
BASIS ON WHICH
FURTHER
NEGOTIATIONS
REGARDING TERMS
OF CONTRACT ARE
BASED
 WHERE TENDER IS CALLED FOR
& PERSON CALLING FOR TENDER
(ADVITISER) DOES NOT BIND
HIMSELF TO ACCEPTING
HIGHTES / LOWEST TENDER,
CALL WOULD NORMALLY BE NO
MORE THAN REQUEST TO
SUBMIT OFFERS, WHICH
ADVITISER MAY ACCEPT /
REJECT AT WILL

CALLING
FOR
TENDERS
 CERTAIN RULES
RELATING TO
SALE MADE
KNOWN
BEFOREHAND
CONDITIONS OF
AUCTION:
DISTICTION
BETWEEN
SOLD TO
AUCTIONS SUBJECT
HIGHEST BIDDER
TO RESERVATION /
AUCTIONS NOT
SUJECT TO
RESERVATION

NOT SUBJECT TO
AUCTIONS SUBJECT TO
RESERVATION: RESERVATION
SOLD WITHOUT EXAMPLE:PREDET
RESERVE - ERMINED PRICE
AUCTIONEER IS FETCHED /
MAKES OFFER EXCEEDED

ONLY WHEN
AUCTIONEER
BIDDER IS
ACCEPTS BID IS
OFFEROR
CONCENSUS
REACHED
 CONTRACT ARISES
AT MOMENT
WHEN & AT PLACE
WHERE
CONSENSUS IS
REACHED

MOMENT
IMPORTANT - CAN
STILL BE REVOKED
(3) ELECTRONIC
/ OFFER EXIRED &
AGREEMENTS
WHEN DUTIES
BECOME
ENFORCEABLE

MOMENT &
PLACE OF
FORMATION
OF CONTRACT
PLACE
(2) WHERE PARTIES
IMPORTANT-
ARE NOT IN EACH
COURT
OTHER'S PRESENCE
JURISDICTION

(1) WHERE
OFFERER &
OFFEREE ARE IN
EACH OTHER'S
PRESENCE
 USUALLY EASY TO
DETERMIN TIME &
PLACE

WHERE
OFFEROR &
OFFEREE ARE IN
EACH OTHER'S
REFERRED TO AS
PRESENCE
CONTRACT COMES
INFORMATION /
INTO BEING AT TIME
ASCERTAINMENT
WHEN ACCEPTANCE
THEORY - CONTRACT
IS COMMUNICATED
COMES INTO BEING
& AT PLACE WHERE
WHEN & WHERE
PARTIES HAPPEN TO
OFFEROR LEARNS OF
BE AT THAT POINT
ACCEPTANCE OF
INTIME
OFFER
 TELEPHONE:
CONSIDERED TO BE
IN EACH OTHER'S
PRESENCE - PLACE:
WHERE OFFERER IS

DISPATCH /
OFFEREE CANNOT EXPEDITION THEORY:
ENFORCE SLOWER POST. PLACE WHERE
LETTER OF & TIME WHEN
ACCEPTANCE IF
CHANGES MIND
WHERE LETTER OF
ACCEPTANCE IS
PARTIES ARE POSTED

NOT IN EACH
OTHER'S
PRESENCE

OFFEREE CAN UNDO

ACCEPTANCE BY
SPEEDIER MEANS OF DISPATCH THEORY -
COMMUNICATION PRIMARILY AIMED
BEFORE EARLIER AT PROTECTING
COMMUNICATION OFFEREE
COMES TO OFFERORS
KNOWLEDGE
 CONSENSUS
ABSENT:
CONTRACT IS VOID

(2) IMPROPERLY
CONSENSUS CONSENSUS
OBTAINED
IMPROPER
OBTAINED
CONSENSUS
& DEFECTS MANNER: VALID
CONTRACT ARISES -
IN WILL VOIDABLE

(1) ABSENCE OF
CONSENSUS -
MISTAKE
 MISTAKE EXISTS WHEN
1 / MORE PARTIES TO
PROPOSED CONTRACT
MISUNDERSTAND
MATERIAL FACT /
LEGAL RULE RELATING
TO CONTRACT

ONLY MISTAKES WRT

MATERIAL FACT,
LEGAL RULE / NO CONSENSUS - NO
PRINCIPLE WILL LEAD CONTRACT
TO ABSENCE OF
CONTRACT
ABSENS OF
CONSENSUS
- MISTAKE

MISTAKE = PARTIES WILL BE

UNREASONABLE - NOT HELD TO
EXCUSED - PARTY DECLARATIONS OF
MADE MISTAKE - INTENTION UNLESS
HELD TO CIRCUMSTANTES ARE
DECLARATION OF SUCH THAT MISTAKE
INTENTION IS REASONABLE
 MISTAKE RELATES
TO FACT, / LEGAL
RULE / PRINCIPLE

REQUIREMENTS
TO BE MET
BEFORE
MISTAKE WILL
RENDER A
CONTRACT VOID
MISTAKE (WHETHER FACT / RULE /
OF FACT / LAW) IS PRINCIPLE IS
REASONABLE MATERIAL
 IN ORDER TO HAVE
EFFECT ON
CONSENSUS,
MISTAKE MUST BE
1 OF FACT / LAW

MISTAKE
MUST RELATE
TO FACT,
LEGAL RULE /
PRINCIPLE

MISTAKE IN LAW /
FACT - ONLY
INVALIDATE
CONTRACT IF
CONSIDERED TO BE
EXCUSABLE IN
CIRCUMSTANCES
 (A) IDENTITY
MISREPRESENTATION:
WHERE LEADS TO N/A:
MATERIAL MISTAKE - IMMATERIAL
RESULTS IN NO WHO PARTY
CONSENSUS - NO SHOULD BE,
CONTRACT FULL NAMES,
CHARACTER

MISREPRESENTATION:
WILL NOT VOID -
(B) CONTENT
GIVES RISE TO MISTAKE MUST
VOIDABILITY CONCERN
MATERIAL FACT,
LEGAL RULE /
PRINCIPLE

TIME
PERFORMANCE
MISTAKE RENDERED,
ABOUT PLACE &
NATURE OF METHOD OF
CONTRACT DELIVERY,
PERFORMANCE
ITSELF

(C) INTERPRETATION
N/A:
(ATTACHED TO
ATTRIBUTES
OFFER &
OF OBJECT
ACCEPTANCE)
 IF NOT JUSTIFIABLE
ERROR, CONTRACT
ENFORCED,
DESPITE
DIFFERENCE FROM
PARTY'S
INTENTION

CAN RELY ON MISTAKE IN REASONABLE: IF

MISREPRESENTATION REASONABLE
IF OTHER PARTY FACT / LAW PERSON IN SAME
CREATED THE SITUATION WOULD
UNREASONABLE MUST BE MAKE SAME
MISTAKE MISTAKE
REASONABLE

CANNOT RELY ON
MISTAKE IF NEGLIGENT
/ CARELESS / PAID
INSUFFIECIENT
ATTENTION TO
MATTER (NOT
READING CONTRACT)
 MISREPRESENTATION

IMPROPERTLY
OBTAINED
CONSENSUS

UNDUE INFLUENCE DURESS

 DEFINITION: UNTRUE
STATEMENT /
(E) CAN BE REPRESENTATION
MADE CONCERNING EXISTING CONTRACT (A) MUST BE
BEFORE INTENTIONALLY, FACT / STATE OF VOIDABLE MISREPRESENTA-
CONCLUSION NEGLIGENTLY / AFFAIRS, MADE BY 1 REQUIREMENTS: TION
OF CONTRACT INNOCENTLY PARTY WITH AIM &
RESULT OF INDUCING
CONTRACT

N/A:
REFERRED TO MISREPRESEN-
AS REQUIRE- TATION OF LAW,
MENTS OF HONEST
CASUALTY OPITION,
ESTIMATE
PUFFING

MISREPRESENTATION

MISREPRESENT-
ATION MADE BY
EXPRESS
(D) MUST STATEMENT /
HAVE CONDUCT
INDUCED
CONTRACT AS
STANDS

KEEPING SILENT =
MISREPRESEN-
NOT TATION ONLY IF
UNLAWFUL DUTY TO
JUST BECAUSE (B) MADE BY 1 DISCLOSE
FALSE. (C) MUST BE N/A: CONTRACTING RELEVANT FACTS
IMPORTANCE UNLAWFUL MISREPRESEN- PARTY TO EXISTS
IS MEASURED & MATERIAL TATION BY ANOTHER
OUTSIDER
 DOES NOT
EXCLUDE
CONSENSUS,
THUS
CONTRACT
VALID
NOT VOID
CONTRACT
(3) INNOCENT ARISES -
MISREPRE- VOIDABLE @
SENTATION INSTANCE OF
DECEIVED
PARTY

INNOCENT
(2) NEGLIGENT PARTY MAY
EFFECT OF
MISREPRE- CLAIM FOR
SENTATION MISREPRESENTATION BREACH OF
CONTRACT

DAMAGE CLAIM
DEPENDS ON
(1) INTENTIONAL
DEGREE OF FAULT
MISREPRESEN-
ATTRIBUTABLE TO
TATION
MISREPRESENTA-
TION
3 FORMS OF
MISREPRESEN-
TATION:
 FALSE
STATEMENT OF
MATERIAL FACT
MADE WITH
INTENTION OF
INDUCING
& IF STATEMENT IS
CONTRACT
CLAIM FOR MADE IN
DAMAGES FOR AWARENESS THAT IT
INTENTIONAL IS FALCE /
MISREPRESEN- RECKLESSLY
TATION = CLAIM WITHOUT REGARD
IN DELICT & NOT TO TRUTH /
CONTRACT FALSENESS OF
STATEMENT

INTENTIONAL
DECEIVED PARTY MISREPRESENTATION PARTY
PLACED IN MISLEADING
POSITION WOULD OTHER KNOWS
HAVE BEEN IF OTHER PARTY IS
MISREPRESENTA- BEING MISLED /
TION HAD NOT RECKLESS WRT
BEEN MADE TRUTH

INNOCENT PARTY
MAY CLAIM
BASIS FOR DAMAGES
DAMAGES = IRRESPECTIVE OF
DELICTUAL CHOICE OF
CONDUCT UPHOLDIN G/
RESCINDING
CONTRACT
 DEFINED AS FALSE
STATEMETN OF
MATERIAL FACT
WHICH IS MADE
NEGLIGENTLY &
WITH AIM OF
INDUCING
CONTRACT

NEGLIGENCE ASSUMED
IF PERSON MAKES
MISLED PARTY STATEMENT BELIEVES
CLAIM DAMAGES TO BE TRUE, WITHOUT
IRRESPECTIVE IF NEGLIGENT TAKING STEPS
CONTRACT IS MISREPRESENTATION REASONABLE PERSON
UPHOLDED / WOULD HAVE TAKEN IN
RESCINDED CIRCUMSTANCES TO
SATISFY THAT
STATEMENT WAS TRUE

MISLED PARTY
BASE CLAIM FOR
DAMAGES ON
DELICTUAL
PRINCIPLES
 FALSE STATEMENT
= MADE WITH
INTENTION OF
INDUCING
CONTRACT, PARTY
NOT FRAUDULENT
/ NEGLIGENT

DECEIVED PARTY
NO ROOM FOR
HAS CHOICE OF INNOCENT APPLICATION OF
UPHOLDING /
MISREPRESENTATION DELICTUAL
RESCINDING
PRINCIPLES
CONTRACT

DECEIVED PARTY
HAS NO CLAIM FOR
DAMAGES
 DURESS =
UNLAWFUL THREAT
OF HARM / INJURY
MADE BY PARTY TO
CONTRACT /
SOMEONE ACTING
ON BEHALF TO
CONCLUDE
CONTRACT

NEGATIVE INTEREST:
POSITION WOULD
HAVE BEEN HAD CONTRACT ARISES
DURESS NOT
OCCURED

DURESS
DAMAGES
CALCULATED
CONTRACT =
ACCORDING TO
VOIDABLE
NEGATIVE
INTEREST

DAMAGES CAN BE
CLAIMED
IRRESPECTIVE IF
CONTRACT IS
UPHOLDED /
RESCINDED
 (A) ACTUAL
PHYSICAL
VOILENCE /
REASONABLE
FEAR OF
VIOLENCE / ECONOMIC
(E) THREAT
DAMAGE DAMAGE / RUIN
MUST CAUSE
= RARE = NOT
THREATENED
UNLAWFUL TO
PERSON TO
CAUSE IN
CONCLUDE
COMPETITIVE
CONTRACT
ECONOMY

COMMERCIAL
REQUIREMENTS BARGAINING -
(D) MUST BE FOR CONTRACT FREE WILL
EXERCISED BY 1 TO BE ALWAYS
CONTRACTING HAMPERED -
PARTY AGAINST VOIDABLE HARD
THE OTHER BASED ON BARGAINING =
DURESS NOT EQUIVALENT
OF DURESS

THREAT TO
OBTAIN MORE (B) THREAT
BENEFICAL MUST BE
PERFORMANCE - IMMINENT /
COOMPLY WITH INEVITABLE
REQUIREMENT OF EVIL
UNLAWFULNESS (C) THREAT OF
HARM /
VIOLENCE
MUST BE
UNLAWFUL
 DEFINED AS ANY
IMPROPER / UNFAIR
CONDUCT BY 1 OF
CONTRACTING PARTIES
BY MEANS OF WHICH
OTHER CONTRACTNG
PARTY = PERSUADED TO
CONCLUDE CONTRACT
MAY ELECT TO CONTRARY TO
UPHOLD / INDEPENDENT WILL
SPECIAL
RESCIND & /
RELATIONSHIP
CLAIM DAMAGES
BETWEEN
BASED ON
PARTIES
NEGATIVE
INTEREST

UNDUE
INFLUENCE DOCTOR &
PATIENT;
INDEPENDENT WILL ATTORNEY &
NOT EXCERCISED CLIENT;
GUARDIAN &
MINOR

ABUSE OF
IGNORANCE / LACE
OF EXPERIENCE,
CONTRACT
PHYSICAL FRAILTY,
COMES INTO
INTELLECTUAL
EXISTENCE
WEAKNESS /
MENTAL
DEPENDENCE
 PARTY WHO HAS
ALLEGEDLY
EXERCISED UNDUE
INFLUENCE MUST
HAVE ACQUIRED
INFLUENCE OVER
VICTIM

ELEMENTS
OF UNDUE
INFLUENCE MUST HAVE
INFLUENCE
BEEN USED
UNSCRUPULOUSLY TO PARTY MUST HAVE
PERSUADE VICTIM TO USED INFLUENCE TO
CONSENT TO WEAKEN VICTIM'S
TRANSACTION VICTIM ABILITY TO RESIST,
WOULD NOT HAVE SO THAT VICTIM'S
ENTERED INTO OF WILL BECAME
NORMAL FREE WILL & SUSCEPTIBLE
WHICH WAS TO VICTIM'S
DISADVANTAGE