Understanding Contract Law

Max Young

• Publisher: Routledge
• Year: 2009
• ISBN:
  9781135194826
• Edition: 1
• Topic: Jura
• Subtopic: Rechtstheorie & -praxis

Built around familiar real-world examples that illustrate the concepts, principles and key cases upon which English contract law is structured, Understanding Contract Law offers a clear introduction to the basic concepts of contract law in England.

Chapter 1
Introduction

CONTENTS

		1.1 Introduction – what this book is about 1
		1.2 Putting contract law in the context of English common law 2
		1.3 What is common law? 2
		1.4 Precedent 3
		1.5 An overview of contract law 3
		1.6 Agreement, offer and acceptance 4
		1.7 Certainty of terms 4
		1.8 Consideration and variation of contracts 4
		1.9 Intention to create legal relations 5
		1.10 Privity of contract 5
		1.11 Terms of the contract 5
		1.12 Exclusion/exemption clauses 5
		1.13 Misrepresentation 6
		1.14 Remedies for breach of contract 6

1.1 Introduction – what this book is about

This book is not intended to give a comprehensive coverage of contract law but it is intended to give you a good feel for the topic.

The book will, as far as possible, use examples that you would be familiar with in everyday situations. It will not go into complex contract situations such as purchases of land or houses (which lawyers call ‘real property’); such areas of contract law are very specialized and are areas of law which are dealt with by lawyers as completely different topics.

The book will surprise you, I think, as to how often you enter into contracts on a daily basis without even knowing you’re doing that.

The book will try and show you that contract law is not about ‘having a good memory’, but rather being able to grasp the legal principles and apply them to different situations.

The book will explain how contract law is the fundamental business legal subject. Not only is it obviously relevant to buying and selling goods and services, but it also underlies such areas of law as employment contracts.

An important point to remember when reading through this book is to remember that the parties to a contract, for example, a seller and a buyer, make ‘the law’ between themselves as regards their contract. There is, generally, no ‘law of contract’ that imposes on the parties as to what they should agree. This is unlike the ‘criminal law’ which imposes on people what they must, and must not, do. So if Robert agrees to sell his brand new car that is worth £30,000 to Jill for £10 then that’s the contract between the two of them. The law will not interfere with that contract.

One other point to bear in mind when reading through the book is that most people think that there can’t be a contract unless there is a signed document. Although many business contracts take the form of a signed document, many do not. How many orders for goods and services are made by telephone, email or on the worldwide web? Every time you go into a shop and buy goods you enter into a contract with the shop; do you ever sign a contract with the shop? Generally not, although when you buy goods on hire purchase you will sign a written contract.

1.2 Putting contract law in the context of English common law

Before starting to look at contract law we briefly need to look at the context in which contract law operates. The law referred to in this book is what is known as the ‘English common law’. English common law forms the basis of the legal system in England and Wales (Scotland has its own legal system). English common law gave birth to legal systems around the world, namely Commonwealth countries such as Kenya, India and Canada. It also gave birth to the legal system of the USA (except Louisiana which adopted French law). Although all these countries now have their own developed legal systems, English common law, especially contract law, is still to be found at the heart of much of their own contract law.

1.3 What is common law?

The basis of English common law is that it has been made by the judges sitting in their various courts over the centuries applying their knowledge of previous cases (precedent), their knowledge of commerce and, to a certain extent, their common sense. To illustrate the longevity point, contract law lawyers still refer to Pinnel’s Case, which was heard in the court of Common Pleas in 1601. Although the court of Common Pleas has long gone Pinnel’s Case is still good law today and is regularly followed and referred to in the courts today. Even today the courts are still ‘making the common law’, although these days changes to the common law are normally brought about by Parliament amending or repealing the common law by Act of Parliament.

1.4 Precedent

Precedent is, at its simplest, one court following the decision of a previous court. We’ll see this in operation when we examine contract law in more detail. However, precedent does take strong account of the hierarchical nature of the court structure. At the top of the structure is the House of Lords. All courts below the House of Lords must follow the decisions of the House of Lords. The Court immediately below the House of Lords is the Court of Appeal. The Court of Appeal must follow the decisions of the House of Lords. The Court of Appeal also follows i...