Table of Contents
Introduc)on to Contract Law ............................................................................................. 2
Introduc)on ....................................................................................................................................... 2
Some General Principles .................................................................................................................... 3
Life Cycle of a Contract ...................................................................................................................... 5
Offer and Acceptance ........................................................................................................ 7
Forma)on of Contract: Overview ...................................................................................................... 7
Objec)ve Test of Inten)on ................................................................................................................ 7
Offer and Acceptance: Overview ....................................................................................................... 8
Offer................................................................................................................................................. 11
Acceptance ...................................................................................................................................... 21
Termina)on of Offer ........................................................................................................................ 38
BaKle of Forms ................................................................................................................................ 40
Offer and Acceptance and its Limits ................................................................................................ 46
, Introduc)on to Contract Law
Introduc)on
1. What is a contract?
• English law has no formal defini2on of a contract, although there have been
various a9empts to define it – e.g.
i. “the law of contract may be provisionally described as that branch of
the law which determines the circumstances in which a promise shall
be legally binding on the person making it” – Anson’s Law of Contract
(Beatson, Burrows and Cartwright)
ii. “a contract is an agreement giving rise to obliga2ons which are
enforced or recognised by law. The factor which dis2nguishes
contractual obliga2ons from other legal obliga2ons is that they are
based on the agreement of the contrac2ng par2es” – E Peel, Treitel on
The Law of Contract
• This lack of a formal defini2on is due to the law of contract’s development
around a form of ac2on known as the ac2on of assumpsit – rather than
developing around some underlying concept of a contract
Ul2mately, a contract is best described as a legally binding agreement
2. What is contract law?
The body of rules which regulates the making and enforcement of contracts
i. Generalist vs specialist contract law
o Many contracts are subject to specialist statutory regimes – e.g.
contracts for the sale of land, sale of goods contracts, and contract of
employment – but general principles of contract remain important as
the founda2ons on which these specialist regimes are built
ii. Why is contract law important?
Supports the ac2vity of making contracts – thus closely related to welfare
maximisa2on and the value of individual autonomy
o There are conflic2ng values at work within the law of contract – e.g.
freedom of contract vs fairness, or market-individualism vs consumer-
welfarism (as described by Adams and Brownsword)
, i. Under market-individualism, “the func2on of contract is not
simply to facilitate exchange, but to facilitate compe22ve
exchange”
• Authors argue this is more likely to succeed because
consumer-welfarism lacks unity/consistency
ii. In contrast, consumer-welfarism is largely about protec2ng
consumers by introducing standards of reasonableness – e.g.
in the form of mistake or implied terms
3. Where does contract law fit in the law of obliga)ons?
i. Contract
o Contractual obliga2ons are generated by voluntarily undertaking
obliga2ons to another person who in turn gives a reciprocal voluntary
undertaking or performance – i.e. contractual du2es are viewed as
self-imposed
ii. Tort
o Obliga2ons generally imposed on the par2es by opera2on of law –
main aim of tort being compensa2on
iii. Unjust enrichment
o Obliga2ons imposed by opera2on of law – generated when one party
receives an unjust enrichment at the expense of another, with the aim
of reversing the unjust enrichment that has occurred
Some General Principles
1. Freedom of contract
The no2on of freedom of contract (and party autonomy) is fundamental to the
English law of contract
• Note a legal rule to be enforced by the courts, but a principle which
influences the development of the legal rules
It has two aspects:
i. The freedom to make, or decline to make, a contract with whoever
you choose
ii. The freedom to contract on whatever terms you choose
, i. Historical context
o Classical law of contract in the 19th century emphasised individualism,
but with the emergence of the mass consumer market in the late 19th
and early 20th centuries, standard form contracts became the
dominant method of contrac2ng
i. Standard form contracts allow large companies to take
advantage of their greater bargaining power to impose harsh
terms on consumers – individuals nego2a2on is not an op2on
ii. Consumers oYen do not know about the harsh terms
o In recent years, English courts have thus shown greater willingness to
intervene to prevent unfairness, especially in the consumer context
§ Note that the law is more intrusive when protec2ng
consumers – when two commercial en22es of equal
bargaining power enter into a contract, the courts are
reluctant to interfere
ii. Qualifica)ons
o First aspect of freedom of contract is subject to the qualifica2on that
one cannot decline to contract with someone where that would be
contrary to the Equality Act 2010 – i.e. where it would amount to
discrimina2on on grounds of sex, gender, race, disability, religion etc.
o Second aspect of freedom of contract assumes that the par2es’
consent has not been impaired on grounds of misrepresenta2ons,
mistake, duress etc,
§ Subject to further qualifica2ons – e.g. the penalty rule, the
implica2ons of some terms into the contract which do not
depend on the par2es’ inten2ons, and the statutory control of
exclusion clauses and unfair terms
2. No general principle of good faith
English law applies different doctrines to prevent unfairness in place of the general
principles of good faith enforced by many civil law systems – whether this is
sa2sfactory is up for debate
Interfoto Picture Library Ltd v S<le=o Visual Programmes Ltd (1989) QB 433, 439:
‘In many civil law systems… the law of obliga2ons recognises and enforces an
overriding principle that in making and carrying out contracts par2es should
Introduc)on to Contract Law ............................................................................................. 2
Introduc)on ....................................................................................................................................... 2
Some General Principles .................................................................................................................... 3
Life Cycle of a Contract ...................................................................................................................... 5
Offer and Acceptance ........................................................................................................ 7
Forma)on of Contract: Overview ...................................................................................................... 7
Objec)ve Test of Inten)on ................................................................................................................ 7
Offer and Acceptance: Overview ....................................................................................................... 8
Offer................................................................................................................................................. 11
Acceptance ...................................................................................................................................... 21
Termina)on of Offer ........................................................................................................................ 38
BaKle of Forms ................................................................................................................................ 40
Offer and Acceptance and its Limits ................................................................................................ 46
, Introduc)on to Contract Law
Introduc)on
1. What is a contract?
• English law has no formal defini2on of a contract, although there have been
various a9empts to define it – e.g.
i. “the law of contract may be provisionally described as that branch of
the law which determines the circumstances in which a promise shall
be legally binding on the person making it” – Anson’s Law of Contract
(Beatson, Burrows and Cartwright)
ii. “a contract is an agreement giving rise to obliga2ons which are
enforced or recognised by law. The factor which dis2nguishes
contractual obliga2ons from other legal obliga2ons is that they are
based on the agreement of the contrac2ng par2es” – E Peel, Treitel on
The Law of Contract
• This lack of a formal defini2on is due to the law of contract’s development
around a form of ac2on known as the ac2on of assumpsit – rather than
developing around some underlying concept of a contract
Ul2mately, a contract is best described as a legally binding agreement
2. What is contract law?
The body of rules which regulates the making and enforcement of contracts
i. Generalist vs specialist contract law
o Many contracts are subject to specialist statutory regimes – e.g.
contracts for the sale of land, sale of goods contracts, and contract of
employment – but general principles of contract remain important as
the founda2ons on which these specialist regimes are built
ii. Why is contract law important?
Supports the ac2vity of making contracts – thus closely related to welfare
maximisa2on and the value of individual autonomy
o There are conflic2ng values at work within the law of contract – e.g.
freedom of contract vs fairness, or market-individualism vs consumer-
welfarism (as described by Adams and Brownsword)
, i. Under market-individualism, “the func2on of contract is not
simply to facilitate exchange, but to facilitate compe22ve
exchange”
• Authors argue this is more likely to succeed because
consumer-welfarism lacks unity/consistency
ii. In contrast, consumer-welfarism is largely about protec2ng
consumers by introducing standards of reasonableness – e.g.
in the form of mistake or implied terms
3. Where does contract law fit in the law of obliga)ons?
i. Contract
o Contractual obliga2ons are generated by voluntarily undertaking
obliga2ons to another person who in turn gives a reciprocal voluntary
undertaking or performance – i.e. contractual du2es are viewed as
self-imposed
ii. Tort
o Obliga2ons generally imposed on the par2es by opera2on of law –
main aim of tort being compensa2on
iii. Unjust enrichment
o Obliga2ons imposed by opera2on of law – generated when one party
receives an unjust enrichment at the expense of another, with the aim
of reversing the unjust enrichment that has occurred
Some General Principles
1. Freedom of contract
The no2on of freedom of contract (and party autonomy) is fundamental to the
English law of contract
• Note a legal rule to be enforced by the courts, but a principle which
influences the development of the legal rules
It has two aspects:
i. The freedom to make, or decline to make, a contract with whoever
you choose
ii. The freedom to contract on whatever terms you choose
, i. Historical context
o Classical law of contract in the 19th century emphasised individualism,
but with the emergence of the mass consumer market in the late 19th
and early 20th centuries, standard form contracts became the
dominant method of contrac2ng
i. Standard form contracts allow large companies to take
advantage of their greater bargaining power to impose harsh
terms on consumers – individuals nego2a2on is not an op2on
ii. Consumers oYen do not know about the harsh terms
o In recent years, English courts have thus shown greater willingness to
intervene to prevent unfairness, especially in the consumer context
§ Note that the law is more intrusive when protec2ng
consumers – when two commercial en22es of equal
bargaining power enter into a contract, the courts are
reluctant to interfere
ii. Qualifica)ons
o First aspect of freedom of contract is subject to the qualifica2on that
one cannot decline to contract with someone where that would be
contrary to the Equality Act 2010 – i.e. where it would amount to
discrimina2on on grounds of sex, gender, race, disability, religion etc.
o Second aspect of freedom of contract assumes that the par2es’
consent has not been impaired on grounds of misrepresenta2ons,
mistake, duress etc,
§ Subject to further qualifica2ons – e.g. the penalty rule, the
implica2ons of some terms into the contract which do not
depend on the par2es’ inten2ons, and the statutory control of
exclusion clauses and unfair terms
2. No general principle of good faith
English law applies different doctrines to prevent unfairness in place of the general
principles of good faith enforced by many civil law systems – whether this is
sa2sfactory is up for debate
Interfoto Picture Library Ltd v S<le=o Visual Programmes Ltd (1989) QB 433, 439:
‘In many civil law systems… the law of obliga2ons recognises and enforces an
overriding principle that in making and carrying out contracts par2es should
