Chapter 2: Contract formation

The law will not interfere with the freedom of contracting parties to enter into a contract on whatever terms they choose, provided the contract is not illegal.

• TRUE

• FALSE

A contract will be void if it offends public policy.

• TRUE

• FALSE

Christine knows that Howell has been looking to buy a violin made by the French violin maker, Jean-Paul Marchais, for many years. Christine inherits her mother's violin and offers to sell it to Howell for £10,000. Christine apologizes for the absence of paperwork but assures Howell that it is a Marchais violin. Howell pays £10,000 to Christine. When he takes the violin to be repaired, he is told that the violin actually dated from 100 years following Marchais' death and was a mass-produced instrument.

         Which of the following best describes the legal position?

• There is no contract because Howell accepted something other than the thing that was actually offered.

• There is no contract because Howell had no intention to create legal relations in respect of a mass-produced violin.

• The contract is voidable and Howell can return the violin and recover his £10,000, assuming there is no legal bar to this remedy.

• The contract contains all the essential elements of a valid contract and is therefore binding. Howell should have made enquiries before payment.

As a general rule, can a party recover goods from a third party where the contract turns out to be invalid but:

Void?

• YES

• NO

As a general rule, can a party recover goods from a third party where the contract turns out to be invalid but:

Voidable?

• yes

• no

In order to be legally binding, a contract for the sale of goods must be in writing.

• TRUE

• FALSE

A consumer credit agreement, governed by the Consumer Credit Act 1974, must be in writing.

• TRUE

• FALSE

Dante lived next to a field owned by Frances. He wished to widen the access to his property by two feet. When they met at the village fete, Frances agreed to transfer a strip of land two feet wide and 30 feet long, provided Dante erected attractive fencing. She also said that there was no need for him to pay for the land. Which of the following best describes the agreement between them?      

• There is no contract because there is no consideration for the transfer of land.

• The contract is void because it is not in writing.

• The contract is voidable because it is not in writing.

• The contract is unenforceable because it is not in writing.

Janet owes Ivan £500. Rhiannon telephones Ivan and promises that she will guarantee to pay the sum owed if Janet cannot or does not pay. Janet fails to pay the £500 and so Ivan writes a letter to Rhiannon demanding payment. Which of the following best describes the legal position as to whether Rhiannon is obliged to pay Ivan the £500?

• There is a valid agreement between Ivan and Rhiannon and she must pay.

• Ivan's letter is written evidence of the terms of guarantee and Rhiannon must pay.

• Rhiannon is not a party to the original contract which created the debt owed by Janet so she cannot be liable on the guarantee.

• The guarantee is unenforceable so Rhiannon is not liable.

Mila tells Tanya that she will sell Tanya her horse on 10 May for £3,000, unless it wins a horse race on 9 May, in which case the price will be £4,000, or if it comes second, in which case the price will be £3,500. Is Mila's communication:

• A statement of intention?

• An invitation to treat?

• An offer?

• A mere supply of information?