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