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Full Contract Law Summary - how to make a contract, whether it is formed, exceptions etc.

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FULL contract revision document. Includes definition, cases, explanation for: offer, acceptance, intention to create legal relations, consideration, terms of the contract, exemption clauses, classification of terms (condition or warranty), damages, discharge by frustration, terms or misrepresenta...

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  • March 7, 2023
  • 80
  • 2022/2023
  • Summary

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Table of Contents
Who is alleging a contract............................................................................................................4
What are the three elements of a contract...................................................................................4
Offer.............................................................................................................................................4
Offer or invitation to treat?............................................................................................................................4
Goods on display in supermarkets and self-service shops and online websites............................................4
General advertisements.................................................................................................................................4
Advertisement of a reward.............................................................................................................................4
Unilateral and bilateral contract.....................................................................................................................4
Auctions..........................................................................................................................................................5
Tenders...........................................................................................................................................................5
Termination of an offer...................................................................................................................................6
Revocation......................................................................................................................................................6
Rejection by the offeree.................................................................................................................................7
Lapse of time...................................................................................................................................................7
Acceptance...................................................................................................................................8
Certainty.........................................................................................................................................................8
Communication of acceptance.......................................................................................................................8
Silence.............................................................................................................................................................8
Acceptance by post.........................................................................................................................................8
limitations to the postal rule..........................................................................................................................9
Intention to create legal relations................................................................................................9
Domestic and social agreements..................................................................................................................10
Commercial agreements...............................................................................................................................10
Consideration.............................................................................................................................10
Adequacy and sufficiency.............................................................................................................................11
Past consideration........................................................................................................................................11
Performance of existing duties.....................................................................................................................12
Past payment of undisputed debts...............................................................................................................13
Promissory estoppel.....................................................................................................................................14
Continuing obligations and promissory estoppel.........................................................................................14
Doctrine of privity of contract......................................................................................................................15
Agency...........................................................................................................................................................15
Terms of the contract.................................................................................................................16
terms implied by the courts:.........................................................................................................................16
Terms implied by the courts to reflect the presumed intention of the parties...........................................16
Terms implied by the courts because of the type of contract.....................................................................17
Terms implied by statute..............................................................................................................................17
Terms implied by the Sale of Goods Act 1979..............................................................................................17
Remedies for breach of terms implied by s13 and s14 of the SGA 1979.....................................................18
When right to terminate the contract and reject the goods will be lost:....................................................18
Supply of Goods and Services Act 1982........................................................................................................18
Consumer Rights Act 2015............................................................................................................................19
Exemption clauses......................................................................................................................20
Common law rules on exemption clauses....................................................................................................20
Incorporation into the contract....................................................................................................................20
Incorporated by signature............................................................................................................................21
The contra proferentem rule........................................................................................................................23
Exemption clauses and negligence...............................................................................................................23
The Unfair Contract Terms Act 1977............................................................................................................23

, The reasonableness test...............................................................................................................................25
Must the whole clause be reasonable?........................................................................................................26
Consumer rights act 2015.............................................................................................................................27
Exemption clauses and third parties............................................................................................................28
Classification of terms – condition or a warranty – remedies for breach of a term.....................30
Identify breach of contract and state the relevant issues...........................................................30
Principles (condition/ warranty/ innominate term)....................................................................30
outcome.....................................................................................................................................31
Remedies....................................................................................................................................32
Damages..........................................................................................................................35
Intro...........................................................................................................................................35
Did the breach cause loss?..........................................................................................................36
Expectation loss............................................................................................................................................36
Specified damage clause.............................................................................................................36
Penalty clause.............................................................................................................................37
Difference between a specified damage clause and a penalty clause:........................................................37
remoteness.................................................................................................................................38
Expectation loss:.........................................................................................................................39
Reliance loss...............................................................................................................................40
Reliance loss..................................................................................................................................................40
Mitigation...................................................................................................................................40
Time assessment of damages.......................................................................................................................41

Discharge by frustration...................................................................................................41
General rule................................................................................................................................41
Frustration as an exception. Define Frustrations........................................................................41
Not Frustration if event or change foreseen or contemplated/ if event self-induced (choice or
fault of a party)?.........................................................................................................................45
Effect of frustration at common law:..........................................................................................45
Term or misrepresentation...............................................................................................47
Term or representation?.............................................................................................................47
If a term - remedies for breach...................................................................................................48
Misrepresentation? Define.........................................................................................................49
Damages.....................................................................................................................................54
Duress..............................................................................................................................56
Undue influence structure................................................................................................59
Issues involving exemption clauses...................................................................................61
The contra proferentem rule........................................................................................................................63
The reasonableness test...............................................................................................................................66
Must the whole clause be reasonable?........................................................................................................67
Consumer rights act 2015.............................................................................................................................68

, Exemption clauses and third parties............................................................................................................69

Essay plan: explain and discuss how damages for breach of contract are traditionally
assessed and how the principles governing awards of damages have evolved.................69
Explain this statement and consider how far it remains an accurate representation of the
law. Does the doctrine of promissory estoppel apply to all types of modification and
variation of a contract? Should it?....................................................................................75

, Who is alleging
a contract
What are the Offer
three elements Offer definition  an expression of willingness to contract on certain terms, made with the
of a contract intention that it shall become binding as soon as it is accepted by the person to whom it is
addressed’ Professor Treitel (Treitel, The Law of Contract, 13th edn, p 8

Expression  could take form of a letter/newspaper/ advertisement/ fax/conduct

Offer or invitation to treat?
Invitation to treat  preliminary statement that invites negotiation

Goods on display in supermarkets and self-service shops and online websites
Invitations to treat are NOT offers Pharmaceutical Society of Great Britain v Boots Cash Chemists
[1953] 1 QB 401, CA. ALSO Fisher v Bell [1961] 1 QB 394

HOWEVER

Display of goods may amount to offer in special circumstances where there is a clear intention to
be bound:
1- Filling the car up with fuel (once fuel is in car you are obliged to pay for it – offer = pump
and acceptance = syphoning diesel from it)

General advertisements
Generally, invitations to treat Partridge v Crittenden [1968] 1 WLR 1204


Advertisement of a reward
generally treated as an offer and there is an intention to be bound as soon as the information is
given Williams v Carwardine (1833) 5 C & P 566

an advertisement can constitute an offer to ‘the world’ (that is anyone who learns of it), and that it
may, by the way in which it is stated, waive the need for communication of acceptance prior to a
claim under it (this is a type of a unilateral contract) if the wording of an advert shows a clear
intention to be bound by an acceptance then it may constitute an offer
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, CA

Unilateral and bilateral contract
Unilateral (one-sided)
a promise in return for an act (if you do something, I promise to…. Pay a sum of money (offer) to
anyone providing information (acceptance when they provide info)

Bilateral (two-sided)
One party makes a promise in return for a promise from the other party (I promise (offer) to sell
you my car for £7,000 and you agree (ie you promise) to buy it for £7,000.) The offer and
acceptance both take the form of promises. Both parties are immediately bound

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