Seminar: Introduction to Contract Law (1)

Stage 2 Topic 12: Seminar 1

Principles of Business

2

• Explain what a contract is

• List the essential elements of a binding contract.

• Demonstrate understanding of the limitations of freedom to contract.

Key topics / learning outcomesof this Seminar

3

Activities

• Introduction

• Quiz

• Is there a contract?

• Wilson v Burnett

• Freedom to contract

4

Quiz

1. What is a contract?

A: a legally enforceable agreement.

2. What are the essential elements of a contract?

A: offer, acceptance (i.e. together = agreement) plus consideration and intention to create legal relations.

5

Quiz

3. What does privity of contract mean?

A: only the parties to the contract are bound.

4. Does a contract have to be in writing?

A: No – in principle an oral contract is just as binding as a written one.

6

Quiz

5. Why then do we advise people to “get it in writing”?

A: for evidential purposes.

6. What are the two main remedies for breach of contract?

A: damages or specific performance.

7

Quiz

7. How are damages calculated?

A: They are designed to put C back in the position s/he would have been in, had the contract been performed.

8. Which of the two remedies is more common?

A: damages

8

Quiz

9. Why is specific performance not awarded more often?

A: because it may be impossible and is frequently impractical.

10. If one party breaches a contract and the other wants to take legal action against them, in which court will the claim be heard?

A: County Court unless it is a high value or complex case (normally £100,000), in which case the High Court

9

Is this a contract?

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D was a civil servant working in Ceylon. C was his wife. She was unwell and living in England. D agreed to pay her a monthly allowance of £30. They agreed to separate, whereupon he stopped making the payments. She sued.

Is this a contract?

No

Balfour v Balfour [1919] 2 KB 571 (CA)

11

C and D were married, but separated. D agreed to pay C £40 per month towards the mortgage and C paid the balance. They made a written agreement that D would transfer the house to C when the mortgage was paid. However, D refused to transfer the house. C sued.

Is this a contract?

Yes

Merritt v Merritt [1970] EWCA Civ 6 (CA)

12

C and D formed an agreement for the sale of tissues. The written agreement included a clause stating that it was not a legal agreement. When D failed to continue the agreement, C sued.

Is this a contract?

No

Rose and Frank Co v JR Crompton & Brothers Ltd [1924] UKHL 2 (HL)

13

D was promised by his father X that D need not repay X money he owed if he did not dispute X’s will. After X’s death, C, the executor, sued D for the money owed.

Is this a contract?

No

White v Bluett [1853} 23 Lj Ex 35 [Exch]

Wilson v Burnett

1. Summarise the facts.2. Who won?3. What did the first instance judge

decide?4. What did the CA decide?5. Go through the legal test for a

contract – where did they fall down?

Freedom to contract

1. Why not?2. Any particular circumstances or

parties where freedom to contract should be limited?

3. Examples

Summary

• Four elements for a contract• Up to parties to agree their terms• But there are limitations to what

the law will enforce

Next session

End of Seminar

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© Pearson College 2013