CONTRACT LAW
At the end of this lecture you should
have an understanding of:
- how contract law developed in
England
- the essential ingredients of a
contract
- judicial approaches to finding the
existence of a contract
Common law – birth of
contract law
• Contract law developed through the
courts of common law – the ‘writ’
system
• Pickering v Thoroughgood 1533
• General cause of action – assumpsit
• Slade’s case 1602
Developments from the
16th to 19th centuries
•
•
•
•
Consideration
Industrial revolution
Principle of ‘laissez-faire’
Treatises on contract
20th century developments
• Problems with principle of ‘laissez-faire’
• Judicial intervention in contracts
• Statutory intervention in contracts
Definition of a contract
Is it possible?
Tentatively:
‘a legally binding agreement or set of
promises between two or more parties’
Types of contract
• Simple or informal contracts
• Contracts made under seal/deed
Simple contracts – how
found?
‘An Englishman is liable, not because he
has made a promise, but because he
has made a bargain’
Chesire, Fifoot and Furmston’s
Law of Contract (14th edition) page 32
Job of the judge
When a case is brought to court the task
of the judge is to determine
OBJECTIVELY from all the evidence
what was:
- Said
- Written
- Done
External evidence
‘In contracts you do not look into the actual
intent in a man’s mind. You look at what he
said and did … a man cannot get out of
contract by saying “I did not intend to
contract” if by his words he has done so.’
Per Lord Denning in Storer v Manchester City
Council 1974
Balancing interests
The judge has to balance the conflicting
interests of ‘certainty’ and ‘fairness’
Contrasting cases:
Centrovincial Estates plc v Merchant
Investors Assurance Co Ltd 1983
Hartog v Colin and Shields 1939
OFFER
An offer is:
‘an expression of a willingness to be
legally bound as soon as this
expression, by words or conduct, has
been accepted by the party or parties to
whom it was addressed’
Offeror
Offeree
Hallmarks of a valid offer
For there to be an offer:
- negotiations must be finished
- the offer must be specific enough
- the offer must be known to the offeree
Two contrasting cases
Sudbrook Trading Estate Ltd v Eggleton
1983
Bushwall Properties Ltd v Vortex
Properties Ltd 1976
Cross offers
An offer is effective only when it is
communicated to the offeree
Thus, cross offers do not make a contract
Tinn v Hoffman and Co 1873
Difficult cases
‘English law, having committed itself to a rather
technical and schematic doctrine of contract,
in application takes a practical approach,
often at the cost of forcing the facts to fit
uneasily into the marked slots of offer,
acceptance and consideration.’
Per Lord Wilberforce in New Zealand Shipping
Co Ltd v Satterthwaite 1975
Clarke v Dunraven 1897
Merchant Shipping Act 1862
New Zealand Shipping Co Ltd v
Satterthwaite 1975
Finding a valid offer
•
•
•
•
•
Preliminary negotiations
Advertisements
Goods on display in shops/catalogues
Auctions
Tenders
Preliminary negotiations
Gibson v Manchester City Council
1979
Contrasting case
Storer v Manchester City Council
1974
Use of the word ‘offer’
Bigg v Boyd Gibbons Ltd 1971
Advertisements
Generally regarded as Invitations to Treat
Partridge v Crittenden 1968
Unilateral contracts
• Carlill v Carbolic Smoke Ball Co 1893
• Bowerman v ABTA 1996
Goods on display in shops
• Fisher v Bell 1961
• Pharmaceutical Society of Great Britain
v Boots Cash Chemists (Southern Ltd)
1953
Auctions
• Payne v Cave 1979
• Harris v Nickerson 1873
• Barry v Heathcote Ball and Co
(Commercial auctions) 2001
Tenders
• Spencer v Harding 1870
• Blackpool & Flyde Aero Club Ltd v
Blackpool Boro Council 1990
• Harvela Investments v Royal Trust of
Canada Ltd 1985