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Contract: Rules and Theory

Freedom of Contract and Contract Formation

  • 4 things to know
  • Paper 3

Overview

Recall questions on freedom of contract and consumer protection, offers, invitations to treat and unilateral contracts, acceptance and the postal rule, consideration, privity and economic duress.

What you need to know

Answer each one before you reveal it.

Your recallNot started
Key term

What does the theory of freedom of contract hold regarding parties' ability to make agreements?

Key term

Why is the distinction between an offer and an invitation to treat legally significant?

Key term

Does the postal rule apply to instantaneous electronic communications such as email?

Process

Why do consumers need protection, and what distinguishes an offer from an invitation to treat?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What does the theory of freedom of contract hold regarding parties' ability to make agreements?

    Model answer

    Parties should be free to enter into agreements on whatever terms they choose, with minimal state interference.

  2. 2

    What assumption underlies the principle of freedom of contract regarding the parties involved?

    Model answer

    It assumes parties have equal bargaining power and can negotiate terms that serve their mutual interests.

  3. 3

    Why does the law recognise a competing need to protect consumers against absolute freedom of contract?

    Model answer

    Consumers typically have weaker bargaining power than businesses and may lack the expertise to understand complex contractual terms.

  4. 4

    How does consumer protection legislation restrict freedom of contract?

    Model answer

    It imposes mandatory terms and prohibits unfair practices, limiting the parties' ability to agree on any terms they wish.

  5. 5

    Define an offer in contract law.

    Model answer

    A definite promise to be bound on specific terms, capable of acceptance to form a binding contract.

  6. 6

    What is an invitation to treat?

    Model answer

    An indication of willingness to negotiate or receive offers, not a promise to be bound.

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