Contract law L1 PDF

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Notes on lecture one of Contract Law taught by Dr Jaswinder Kaur...

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Contract law Chitty on Contracts – Westlaw    

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Contract law is private law and is part of civil law Private law is concerned with regulating the relationships between private bodies Private law = the law of property v the law of obligations Law of property (rights in rem) o The rights in the thing itself – connecting you to an item  If you buy a book you are the legal owner of it – this is because property law says you have a right in that book Law of obligations (rights in personam) o The right that the person has o You agree to paint your neighbours fence for £50 – you and your neighbour are now connected  Contract  Tort (breach of duty of care)  Restitution (unjust enrichment) o If you don’t fulfil your promise, you can sue the person Obligations are voluntarily chosen and created – rather than imposed by the law

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What is a contract? o ‘An agreement giving rise to obligations which are enforced and recognised by law. The factor which distinguishes contractual from other legal obligations is that they are based on an agreement of contracting parties.’  Sir Guenter Treitel o A contract is a legally binding agreement between two or more parties o The definition of contract needs to be general because it needs to apply to lots of different situations so therefore there is no formal definition

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Key principles of contract law o Freedom of contract (lassiez-faire philosophy)  Sits at the very heart of contract law  This means that each and every individual has a right to enter a contract with anyone for whatever purpose they want  Is this a good idea in its full extent?  Or is it better within limits?  The scope of freedoms has been limited  i.e. the types of contracts entered into  You cannot sidestep criminal laws with a contract  Illegal contracts have no legal effect  The courts can apply an objective test – what would a reasonable person think about this arrangement?  Both parties should be in a similar bargaining position – the courts will address an unequal position  The courts will try and determine if a mistake has been made  Radmancher v Grantino [2010]

o Prenuptial agreements were not enforceable in the UK o This case determined that they should be considered o Binding force of contract  You are legally obliged to fulfil a contract  There is a difference between commercial and social arrangements  This distinction is intention  The courts are good at separating these intentions o Both parties should enter the contract in good faith 

Do contracts have to be in writing? o No – verbal contracts are also acceptable o Rarely are everyday contracts in writing (i.e. buying a coffee) o However, contracts for the sale of land have to be in writing (Law and Property Act 1989) o Having contracts in writing provide evidentiary proof o Contracts in writing provide proof of the fact of the agreement and terms of the agreement o They are helpful if the contract is complicated or there are lots of parties involved o They also offer a clear guide so that the terms can be fulfilled o They can also act as a cautionary/cooling-off function – forces you to think about why you want to enter into the agreement and if you actually want to do it o Contracts in writing offer certainty

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Not all agreements are contracts but all contracts are agreements

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Overview of contracts o Is there a contract? (formation of contracts) o What are the terms of the contract? (Operation of the contract) o Has there been a breach of the contractual term? (Have you suffered a loss?) o Has the breach caused the loss? o Is the loss too remote to recover at law? o Are there any other factors which limit liability or make the contract unenforceable? (i.e. exclusion clauses or vitiating factors?) o How may the contract be discharged? o What remedies are available? Practical points of contracts o The cost of pursuing the claim o Time periods (6 years to bring a claim) o Can you sue the person responsible? o Any delay or disruption? o Is this claim frivolous?

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In order to establish the existence of a contract the following elements are required by the law

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o Agreement o Consideration o Capacity (whether or not the individual is able to enter into the contract i.e. minors) o Certainty (the contract should not be vague) o Intention to create legal relations o No other vitiating factors (these can invalidate or void an arrangement that would otherwise look to be a valid contract – these usually come to the attention of the individual after the contract has been formed)  Misrepresentation  Mistake  Illegality  Duress Agreement o The core of a contract o The law is concerned with the objective appearance of the contract (to the reasonable person)  Consumers expect items to be as they are described/fit for purpose – this is provided for by the law, they don’t need to be expressly agreed between the consumer and the supplier  Objective agreements  The courts focus on the objective viewpoint in a contract – they attach an importance to external factors  They can question where the agreement took place  They try to determine what the reasonable man would think o This is a fictional individual who is not aligned to either party – he is a detached individual who is objective  Storer v Manchester City Council [1974] o The courts cannot determine what individuals were thinking, so they take themselves out of the situation  The objective approach promotes certainty and provides a standard of fair dealing between parties o In some types of contracts (consumer contracts) the law will imply some terms into the agreement – the law says they must exist o Agreements are the first requirements in a contract o Offer + Acceptance = Agreement o It needs to be determined when these things happen o Offer (Nature)  An offer is a statement stating willingness to enter into a contract based on specific terms  Offeror – the person making the offer  Offeree – person to whom the offer is addressed  Offers can be made in writing, orally or by conduct  An offering can be made expressly  An offer can be made to individuals, groups or the world/general pubic  Carlill v Carbolic Smoke Ball Co [1982] (reward case)

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Contracts can be bilateral of unilateral o Bilateral – each party have an obligation to one another o Unilateral – only one party has an obligation (acceptance is done by performance of the act)

Formation of contracts/agreement – assignment...