Lecture2 - Formation of the Contract Chp 3 pg 54-68...

Formation of the Contract
Chp. 3 pg. 54-68
- Contracts begin with a promise, but not all promises become contracts
- Contract – is a set of promises that the law will enforce
o The four basis requirements to form a legally enforceable contract include: offer, acceptance,
consideration and intention
- Offer – is a description of a promise one party is willing to make, subject to the agreement of the other party
o Offeror – the person making the offer
o Offeree – the person to whom the offer is made
- A mere invitation to do business is not an offer to make a contract.
o Ex. Advertisements to sell goods at a certain price are generally mere invitations to the public to visit
the place of business
- Offers can be made orally, or in writing but can also be expressed through action (ex. Bidder raising hand at
auction or taxi
o Offeree cannot accept a offer until they are aware of it
- Section 12 of British Columbia’s Business Practices and Consumer Protection Act
o (1) A consumer has no legal obligation in respect of unsolicited goods or services unless and until the
consumer expressly acknowledges to the supplier in writing his or her intention to accept the goods
or services
o (2) unless the consumer has given the acknowledgment referred to in subsection (1), the supplier
does not have a cause of action for any loss, use, misuse, possession, damage, or misappropriation in
respect of the goods or services or the value obtained by the use of the goods or service
- Standard Form Contract – an offer presented in a printed document or notice, the terms of which cannot be
changed by the offeree, but must be accepted as is or rejected
o This form is part of efficiency and standardizing in modern business
o In certain industries where bargaining power is grossly unequal, the standard form contract is
common
 Protection for consumers from this grossly unequal power of bargaining include:
 Board approval of terms of contracts
 Some segments of the public (ex. Consumer) are offered special protection.
Consumer protection legislation provides disclosure requirements and post-
acceptance cancellation options
 Public only receives as much protection as the courts can be found in the general
law of contract
- Required notice of terms
o If steps were insufficient in disclosing all terms on a contract then the person who claims that they
were unaware of certain clauses on a contract is not deemed liable for that clause they claimed they
were unaware of
o If steps were deemed to be sufficiently in place then the person who claims they were unaware of
the clause still remains responsible for it
- Lapse - is the termination of an offer when the offeree fails to accept it within a specified time, or If no time
is specified, then within a reasonable time
o Offer may lapse in the following ways
 When the offeree fails to accept within a time specified in the offer

 When the offeree fails to accept within a reasonable time, if the offer has not specified any
time limit
