Lecture notes
Lecture notes Contract law llb - Introduction and offer
- Module
- Contract law llb
- Institution
- University Of Law (ULaw)
-Full introductory notes and notes on offers/invitation to treat
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-O’Sullivan & Hilliard’s The Law of Contract: General themes and issues (1.1-1.19)-The law of contract provides the ground rules around what is needed for a contract to
exist, be enforceable and what it means to be enforceable, to resolve disputes about
what the contract means and to prescribe consequences if one party fails to carry out
their duties
-Classical contract theory: (basic threads)
-Contract as a bargain: a contract is a bargain and therefore a reciprocal
agreement between the parties normally an exchange of promises (this is now
outdated by unilateral agreements like deeds)
-Contracts are the product of the will of the parties and their intentions to bind
themselves to them which makes them enforceable, the role of the courts is to
give effect to the intentions of the parties (this isnt always the case as now some
parts of contracts are inserted by statutes not intentions such as consumer rights)
-Contracts should be entered into freely and agreed to without fraud or coercion
(this again is outdated, contracts cant be illegal, and are restrained by statutes
such as the consumer rights act and the unfair contract terms act. Not to mention
that often people need contracts for modern essentials like mobile phones and
often don't have much choice of the terms or who to make a contract with)
Freedom of contract has a larger remit within commercial agreements with
equally powerful parties who both have access to legal advise whereas
consumer contracts tend to have more law surrounding them to protect
consumers.
-However the classical model still gives a lot to go on, in court the intentions of
the parties are still important and the test of what a reasonable person placed in
the position of the parties would do.
-Basic features of the english law of contract
-Individualism: the individualist ethos/ethic means contracting parties are
expected to act in their own interests not those of the other party, it sets up an
adversarial stance with each party trying to get the best terms for themselves.
This is shown in a few rules, for example one party has not active duty to
disclose relevant information to save the other party from making a mistake etc.
Also traditionally there was no general doctrine of good faith and no notion of
abuse of contractual rights, more recently english courts have begun to recognise
and implied term of good faith in certain long term collaborative contracts as this
may actually be more beneficial for the parties by reassuring them etc.
-However a general principle of good faith could bring uncertainty about what that
actually constitutes, and also in certain circumstances bad faith is already
penalised such as duress and misrepresentation
-Importance of certainty: in contract law certainty and clarity are seen as superior
to other considerations such as judge discretion, parties would prefer to lose
once and then know what to do to avoid that next time, without a gamble.
Businesses generally prefer certainty to feel safe to take risks and enter into
contracts.
, -law of contract is not just about litigation after the fact but also about setting
clear ground rules avoiding ambiguity.
-Commercial contract example:
-Two companies make a supply contract for an amount at a certain price paid
upon delivery in october
-Firstly english law (with few exceptions) does not require writing, a signature or
other formalities to be valid, also many of the terms such as the quality of the
goods are covered by the sale of goods act. If one party pulls out the other can
sue for damages but the suing party must have suffered some loss and must
have acted to keep that loss to a minimum (mitigation). In contract you can suffer
a loss because you expected to be better off but now are not you don't have to
actually suffer a material immediate loss.
-If the supplier suddenly can't fulfill the delivery at the agreed price they will have
little chance of escaping the contract unless they negotiated this cop out in
advance, it doesn't matter if the party was at fault but simply that they did not fulfil
the obligations
-Comparison of contract and tort law
-Traditionally, the law of contract is concerned with voluntarily assumed
obligations, while the law of tort involves obligations imposed by law, regardless
of the intention of the parties
-Tort is mostly concerned with fault rather than not fulfilling obligations regardless
of fault.
-Damages for breach of contract protect financial expectations whereas tort is
compensation for actual harm usually to persons or property
-Sometimes contractual obligations reproduce tortious duties such as when
professions contract to take reasonable care and the law recognises concurrent
liability both under contract law and tort, this can help those suing because tort
claims have a longer time limit to make a claim
-O’Sullivan & Hilliard’s The Law of Contract: Offer and acceptance I: general principles
(2.1-2.11) & Lecture 1
(these paragraphs introduce you to the idea of unilateral contracts, whether an offer exists,
whether a goods display in a window or an advertisement amount to offers, as well as rewards,
tenders and auctions.
-Traditionally an offer and acceptance is required to form a contract. An offer is an
indication of one party’s willingness to enter into a contract once the terms are accepted.
An acceptance is an agreement to the terms of the offer (e.g will you buy this car for £1k
then replying yes)
-The parties intentions determine whether a contract is formed and what the contents are
-Potential problems with this view: in some cases there isn't a clear explicit offer and
acceptance such as purchase of goods in a shop, or for example entering a race the
offer and acceptance is to the organiser but not to other competitors (to follow the rules).
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