Contract Law
Introduction to contract law
● Contract law lies at the heart of our system of laws and serves as one of the
foundations of society
● Our society depends upon free exchange in the marketplace at every level
● Contract law makes this possible
● Contract law is a set of rules that provides a framework for agreements
● All contracts are agreements but not all agreements are contracts
● A contract is an agreement that the law recognises as legally binding
Categories of English law
Private law Public law
Law of Law of property Criminal law,
obligations Administrative law
Constitutional law
Contract law Law of torts
● Private law is citizen v. citizen (compensation)
● Public law is citizen v. state (punishment)
Jones v. associated tunnelling (1981)
● Jones is a miner
● Associated tunneling is a company that employs miners
1964 - agreement signed that place of work was Chatterley Colliery (2 miles from home)
1969 - voluntarily re-located to Hem Heath (12 miles from home)
1973 - fresh statement of terms of contract
1976 - further statement of terms of contract - detailing that employer reserves the right
to change place of work for employees
1980 - relocated to Florence colliery (12 miles from home)
Refused to move, claimed redundancy/unfair dismissal
The tribunal said there is a contract of employment and an ongoing relationship between
employer and employee. There is no evidence he agreed to work anywhere in the UK.
They said he “agreed to work within local geographical mobility”, as a matter of law local
geographical mobility was his place of work. This was an implied term (drawn from the
circumstances). Jones lost redundancy payment claim, and this was ruled as a fair
dismissal.
Definition of contract: Treitel (1995) defined a contract as an agreement giving rise to
obligations that are enforced by the law. The factor which distinguishes contractual from
other legal obligations is that they are based on the agreement of contracting parties.
S.12 sale of goods act: In a contract of sale, … there is an implied term on the part of
the seller that in the case of a sale he has a right to sell goods, and in the case of an
agreement to sell he will have such a right at the time when the property is to pass.
,Contract Law
The fact of Agreement (offer and acceptance)
An invitation to treat is a proposal, not a
contract.
A counter offer is a proposal different from
the original (negotiation), this kills off the
original offer.
Definition of an offer: an offer is an expression of willingness to contract on certain
terms made with the intention that a binding agreement will exist once the offer is
accepted.
● Unilateral offers are capable of being made to the world as a whole (not common)
○ Carlill v Carbolic Smoke Ball Company (1893)
○ Bowerman v Association of British Travel Agents (1996)
● Bilateral offers are made to a specific individual or group
Offer or invitation to treat?
● Advertisements
○ Invitation to treat
● Display of goods
○ Invitation to treat
○ Pharmaceutical company of Great Britain v Boots
● E-commerce (websites)
○ Invitation to treat
● Auctions
○ Invitation to treat
○ A sale without reserve means the item will be sold regardless of price
■ The auctioneer is offering, the item will be sold to the highest bid
○ A sale with reserve is sold to the highest bid, providing it satisfies the seller
○ Barry v Davies [2000] 1 WLR 1962
● By ticket
○ Contract
○ Thornton v Shoe Lane Parking [1972] 1 All E.R. 686
■ Case makes clear that the terms of conditions must be made clear
before entering into the contract
, Contract Law
Communication of offer
Most forms of communication are acceptable for an offer (verbal, written, by conduct)
and there is a presumption that the acceptance will be made with the same mode of
communication - though it does not have to be by law.
An offer is effective upon receipt, not when it is sent (assuming there is a time delay).
Communications are effective upon receipt, but postal acceptances are effective at the
time of posting.
● Byrne v Van Tienhoven
Termination of offers
● Revocation (withdrawal)
○ If you can get to the other side to tell them the offer is cancelled before
they receive or accept it, you are able to terminate the offer.
● Rejection
○ If they do anything you are able to persuade the court that they rejected
the offer (counter offer) the offer is dead. Once you have rejected an offer
you have lost it.
● Lapse of time
○ There is a time limit on the offer in which if the offer is not accepted before
the expiry time, the other side are then unable to accept this offer as it has
lapsed
● Death
Acceptance
Definition of acceptance: a final unqualified expression of assent to all the terms of an
offer (Treital)
● Acceptance must be communicated
○ The offer, request etc is effective in law when it is received
○ An acceptance is not legally binding unless both sides are aware of this
Exceptions to the general rule
● Waiver
○ States that there is no need to get back to the offeror
○ Generally speaking a contract will not be allowed to be formed without a
verbal acceptance, however in some cases in commercial courts this can be
allowed
● Silence
○ You cannot accept something by silence, as silence is not a form of
communication
○ There is a fine line between waiver and silence
● Conduct
○ Your conduct can be seen as the sign of acceptance
○ Brogden v Metropolitan Railway Co. c.f. Burdett-Courts v Herts. C.C. [1984]
I.R.L.R. 91
Introduction to contract law
● Contract law lies at the heart of our system of laws and serves as one of the
foundations of society
● Our society depends upon free exchange in the marketplace at every level
● Contract law makes this possible
● Contract law is a set of rules that provides a framework for agreements
● All contracts are agreements but not all agreements are contracts
● A contract is an agreement that the law recognises as legally binding
Categories of English law
Private law Public law
Law of Law of property Criminal law,
obligations Administrative law
Constitutional law
Contract law Law of torts
● Private law is citizen v. citizen (compensation)
● Public law is citizen v. state (punishment)
Jones v. associated tunnelling (1981)
● Jones is a miner
● Associated tunneling is a company that employs miners
1964 - agreement signed that place of work was Chatterley Colliery (2 miles from home)
1969 - voluntarily re-located to Hem Heath (12 miles from home)
1973 - fresh statement of terms of contract
1976 - further statement of terms of contract - detailing that employer reserves the right
to change place of work for employees
1980 - relocated to Florence colliery (12 miles from home)
Refused to move, claimed redundancy/unfair dismissal
The tribunal said there is a contract of employment and an ongoing relationship between
employer and employee. There is no evidence he agreed to work anywhere in the UK.
They said he “agreed to work within local geographical mobility”, as a matter of law local
geographical mobility was his place of work. This was an implied term (drawn from the
circumstances). Jones lost redundancy payment claim, and this was ruled as a fair
dismissal.
Definition of contract: Treitel (1995) defined a contract as an agreement giving rise to
obligations that are enforced by the law. The factor which distinguishes contractual from
other legal obligations is that they are based on the agreement of contracting parties.
S.12 sale of goods act: In a contract of sale, … there is an implied term on the part of
the seller that in the case of a sale he has a right to sell goods, and in the case of an
agreement to sell he will have such a right at the time when the property is to pass.
,Contract Law
The fact of Agreement (offer and acceptance)
An invitation to treat is a proposal, not a
contract.
A counter offer is a proposal different from
the original (negotiation), this kills off the
original offer.
Definition of an offer: an offer is an expression of willingness to contract on certain
terms made with the intention that a binding agreement will exist once the offer is
accepted.
● Unilateral offers are capable of being made to the world as a whole (not common)
○ Carlill v Carbolic Smoke Ball Company (1893)
○ Bowerman v Association of British Travel Agents (1996)
● Bilateral offers are made to a specific individual or group
Offer or invitation to treat?
● Advertisements
○ Invitation to treat
● Display of goods
○ Invitation to treat
○ Pharmaceutical company of Great Britain v Boots
● E-commerce (websites)
○ Invitation to treat
● Auctions
○ Invitation to treat
○ A sale without reserve means the item will be sold regardless of price
■ The auctioneer is offering, the item will be sold to the highest bid
○ A sale with reserve is sold to the highest bid, providing it satisfies the seller
○ Barry v Davies [2000] 1 WLR 1962
● By ticket
○ Contract
○ Thornton v Shoe Lane Parking [1972] 1 All E.R. 686
■ Case makes clear that the terms of conditions must be made clear
before entering into the contract
, Contract Law
Communication of offer
Most forms of communication are acceptable for an offer (verbal, written, by conduct)
and there is a presumption that the acceptance will be made with the same mode of
communication - though it does not have to be by law.
An offer is effective upon receipt, not when it is sent (assuming there is a time delay).
Communications are effective upon receipt, but postal acceptances are effective at the
time of posting.
● Byrne v Van Tienhoven
Termination of offers
● Revocation (withdrawal)
○ If you can get to the other side to tell them the offer is cancelled before
they receive or accept it, you are able to terminate the offer.
● Rejection
○ If they do anything you are able to persuade the court that they rejected
the offer (counter offer) the offer is dead. Once you have rejected an offer
you have lost it.
● Lapse of time
○ There is a time limit on the offer in which if the offer is not accepted before
the expiry time, the other side are then unable to accept this offer as it has
lapsed
● Death
Acceptance
Definition of acceptance: a final unqualified expression of assent to all the terms of an
offer (Treital)
● Acceptance must be communicated
○ The offer, request etc is effective in law when it is received
○ An acceptance is not legally binding unless both sides are aware of this
Exceptions to the general rule
● Waiver
○ States that there is no need to get back to the offeror
○ Generally speaking a contract will not be allowed to be formed without a
verbal acceptance, however in some cases in commercial courts this can be
allowed
● Silence
○ You cannot accept something by silence, as silence is not a form of
communication
○ There is a fine line between waiver and silence
● Conduct
○ Your conduct can be seen as the sign of acceptance
○ Brogden v Metropolitan Railway Co. c.f. Burdett-Courts v Herts. C.C. [1984]
I.R.L.R. 91
