Contract Law: Features and Concepts

• A contract is an agreement giving rise to obligations, enforced or recognized by law, according to Treitel

Key Features of a Contract

• Contracts do not require a written form
• Capacity is presumed for both individuals and companies
• Interpretation of words and conduct should be objective
• Courts decide what each party was reasonably entitled to conclude from their attitude, not their actual intentions, referencing McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125, 128 (HL).

Key Concepts in Contract Law

• Promise: Not all promises are binding. Promises can be unilateral or bilateral, with one party or both gaining something, and must have consideration
• Freedom-will theory: Parties are free to contract, citing printing and numerical registering Co v Sampson, 1874-75, and courts uphold legally enforceable promises
• Alternative Theories:
• Law and economics approach: parties are rational players, and contract breaches should be dealt with efficiently
• Relative Contract Theory: the relationship created by the contract and the parties' reliance on it is more important than the signatories' rights and duties
• Recent Trends:
• Protection for weaker parties, such as consumers, in commercial transactions
• Protection of reasonable or legitimate expectations
• Expectation of freedom of contract

Key features for Binding Contract

• Offer: expression of willingness to contract on certain terms
• Acceptance: must correspond to the offer
• Consideration: an act or promise given in exchange for the offer
• Intention to be bound: objective intention to create legal relations

Bilateral vs Unilateral Contracts

• Bilateral contracts: both parties make promises; A offers something to B, and B promises something in return
• Unilateral contracts: one party makes a promise in return for an act by the other party; A offers something to everyone, and B does something because of A's promise

Key features of an Offer

• Clear expression through letters, advertisements, or conduct
• Implied offer, needs objective verification of what the offeror meant, citing Smith v Hughes (1871) LR 6 QB 597
• Addressed to a specific person, a class of people, or the world at large
• Must be communicated: the offer must be received by the offeree to be accepted, referencing Taylor v Laird (1856) 25 LJ EX 329

Carlill v Carbolic Smoke Ball Co.

• Carlill v Carbolic Smoke Ball Co. (1893) 1 QB 256 (CA) is a landmark case establishing offer and acceptance principles Facts:
• The Carbolic Smoke Ball Company advertised that their product could prevent influenza
• They offered a £100 reward to anyone who was still sick after using it as directed
• They deposited £1,000 in a bank to show their sincerity
• Mrs. Carlill used the product but still was sick and claimed the £100 reward
• Legal Issue:
• Did the advertisement constitute a legally binding offer or just an invitation to treat
• Court's Decision:
• The Court of Appeal ruled in favor of Mrs. Carlill
• They found that the advertisement was a clear offer rather than just puffery and that Mrs. Carlill's use of the product constituted acceptance Significance:
• This case established that a unilateral contract can be binding if the terms are clear and accepted by performing the required action
• It clarified that an offer can be made to the world at large, not just specific individuals

Offer and Rewards

• An offer is a clear expression of willingness to contract, must be addressed to the offeree, and communicated, citing Carlill v Carbolic Smoke Ball Co. (1893) 1 QB 256 (CA)
• A reward is a unilateral offer, accepted by performing the requested act, referencing R v Clarke (1927) but there is no reward if the act was not performed in reliance of the offer

Offer vs Invitation to Treat

• An invitation to treat is an expression of willingness to negotiate a deal rather than a final offer
• It indicates openness to making a deal, like saying, “I'm interested, let's talk more."
• Examples:
• A store displaying items with prices
• An advertisement in a newspaper
• A seller at an auction asking for bids
• The above invite others to offer, but do not create a contract until an offer is made and accepted

Examples of the above

• Harvey v Facey (1983): A statement of the lowest price is not an offer
• Pharmaceutical Society of GB v Boots (1953): Displaying goods is an invitation to treat
• Fisher v Bell (1961): Displaying a flick knife in a window is an invitation to treat
• Partridge v Crittenden (1968): An advert for birds is an invitation to treat

Offers in Tenders

• General rule: tenders are invitations to treat, not offers
• Exceptions:
• Harvela Investment Trust Ltd v Royal Trust of Canada Ltd (1986): A specific tender to accept the highest bid was an offer
• Great Northern Railway Company v Witham (1873-74): A tender with a clear promise to supply goods was an offer
• Blackpool and Fylde Aero Club v Blackpool BC (1990): Implied obligation to consider tenders received according to the procedure

Offers in Auctions

• General rule: Auctioneers invite bids, which are offers that can be accepted or rejected
• Exception:
• Barry v Davies (2001): An auction without reserve creates an obligation to sell to the highest bidder

Termination of Offers

• Revocation: Free unless consideration is given to keep the offer open
• Rejection: Replacing an offer with another offer, citing Hyde v Wrench (1840) 49 ER 142
• Lapse of time: The period in which the offeror intends to be bound by their words
• Death or other events: Conditional offers and frustrating events terminate the offer

Revocation of Unilateral Offers

• When the offeree is unidentified (unilateral offer to the whole world), effective revocation requires these steps
• Use the same channels as the offer to advertise the revocation
• Achieve the same level of publicity
• If the offeree does not receive news of the revocation despite these steps, the revocation is still effective
• A unilateral offer is accepted only upon full performance
• Courts have occasionally recognized an obligation to keep the offer open during performance
• Other times, especially in commercial transactions, no such obligation was found
• In any case, there is no acceptance upon commencement of performance

Frustration

• Not-yet-accepted offers are not binding and can be revoked unless consideration is given to keep the offer open
• Offers cannot be revoked once they have been accepted
• Revocation must be communicated, but a lapse of time operates automatically
• An offer is terminated if the contract would be frustrated due to death or other exceptional circumstances

Brexit

• EU Law no longer has effect in the UK after December 31st, 2020 due to the EU (Withdrawal) Act 2018
• EU 'retained' law can be amended or replaced by the UK parliament
• Future EU directives or regulations, and CJEU judgements are not binding in the UK
• There is no obligation to align English law with evolving EU standards
• Cross-border recognition of judgements has become more difficult

Formation of Contracts

• Offer and Acceptance: One party must make an offer, and the other party must accept it
• Consideration: There must be an exchange of value between parties
• Mutual Agreement: All parties must agree to the terms of the promise
• Capacity: Parties must have the legal ability to enter into a contract
• Legality: The promise must be for a legal purpose and not against public policy

Objectivity in Contract Law

• Objective interpretation:
• Examination of the objective meaning of words and conduct
• Approach generally followed in the UK
• If two interpretations are possible, it should be decided in favour of the party not responsible for creating the ambiguity
• Subjective interpretation:
• Examination of the state of mind of the signatories when in doubt
• Approach followed in civil law countries and exceptionally in the UK

Illegality

• A party's capacity is their legal ability to enter into a binding agreement
• People are presumed to have full metal capacity unless established otherwise, S.2(1) Mental Capacity Act 2005.
• Intoxicated parties may find contracts voidable
• Contracts are voidable contacts are voidable when underage unless for necessities
• In general, illegal contracts are unenforceable
• Contracts that are illegal by nature are void
• Contracts tainted by illegality: valid, unless the illegality goes to the core of the contract
• Doctrine of pari delicto: both parties are at fault

Doctrine of Privity

• Definition: Only parties in a contract can enforce or be bound by its terms
• Enforcement: Non-parties cannot sue or be sued under the contract
• The purpose is to limit obligations and benefits to those who agreed to the contract
• There are some exceptions where non-parties may have rights or obligations

Key features for a Binding Contract

• Offer: The expression of willingness to contract on certain terms
• Acceptance: Needs to correspond to the offer
• Consideration: An act or promise given in exchange for the offer
• Intention to be bound: an objective intention to create a legal relation
• Acceptance: a final and unqualified expression of assent to all the terms of the offer
• 'Mirror image' rule: unconditional acceptance that must exactly match the terms of the offer

Scenarios of Acceptance

• Acceptance must occur within a reasonable time, referencing Ramsgate Victoria Hotel Co Ltd v Montefiore, 1866.
• Referential bids are not valid forms of acceptance, refrencing Harvela Investments Ltd v Royal Trust Co. of Canada Ltd, 1986.
• Acceptance must be communicated to the offeror, referencing Kennedy v Thomassen, 1929.

Acceptance by Conduct

• If both parties behave as if a contract exists, referencing Immingham Storage Co. Ltd v Clear Plc, 2011.
• Acceptance by conduct occurs when parties reach a general agreement, referencing Premier Paper Group Ltd v Buchanan McPherson Ltd, 2018.

Acceptance and Silence

• General rule: Silence is not acceptance, referencing Felthouse v Bindley, 1862.
• However silence can be acceptance if the offeree indicates it, in re selectmove Ltd, 1955.

Acceptance by Post

• Postal rule: acceptance is effective upon posting, even if the letter never reaches the offeror, referring to Adams v Lindsell, 1818 and Household Fire and Carriage Accident Insurance Co Ltd v Grant, 1879
• Unless specific requirements may override the postal rule, referring to Holwell Securities Ltd v Hughes, 1974.

Instant Communications

• Acceptance is effective when it is received by the offeror, citing Entores Ltd v Miles Far east corp, 1955
• Emails follow these rules with consideration for office hours, citing Thomas v BPE solicitors, 2010

Battle of the Forms

• Counter-Offer: Any reply inconsistent with the offer is a counter-offer, referencing Hyde v Wrench, 1840.
• Last Shot Approach: The terms of the last counter-offer accepted become the contract, referencing Butler Machine Tool Co. Ltd v Ex-Cell-O Corp, 1979.
• The terms must be clear and consistent for the reasonable person, referencing Hamad M Aldrees & Partners v Rotex Europe Ltd, 2019.

Termination of Offer

• Revocation: An offer can be revoked unless there is consideration to keep it open
• Rejection: Replace the offer with another offer (Hyde v Wrench, 1840)
• Lapse of Time: An offer lapses if not accepted within a reasonable time, referencing Ramsgate Victoria Hotel Co Ltd v Montefiore, 1866.
• Death or Other Events: Conditional or frustrating events terminate the offer, referring to Financings Ltd v Stimson, 1962.

Objective test

• Definition: Would a reasonable observer conclude that the parties intended to create legal relations based on their words and actions?

Case examples

• Destiny 1 Ltd v Lloyds TSB bank Plc, 2011: agreements are assessed by what a reasonable person would understand
• RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH (2010): what was communicated is the focus not the subjective intentions

Domestic Transactions

• Intention to be bound is required for all contracts, including those entered in a domestic or social context
• Generally courts are reluctant to intervene in domestic arrangements entered by parties in amicable relationships
• There is the presumption that agreements entered in these type of contexts are not legally binding

No intention

• Balfour v Balfour (1919): Oral promise between spouses not legally binding
• Jones v Padavatton (1969): A mother-daughter agreement is not legally binding

Yes Intention

• Merritt v Merritt (1970): Written agreement between separated spouses legally binding
• Parker v Clark (1960): A memorandum between family members is legally binding
• Simpkins v Pays (1955): Informal agreement within a household legally binding

Commercial transactions

• Intention to be bound is required for all types of contracts especially commercial types
• Rebuttable presumption: business agreements ARE legally binding if essential T&Cs are reached
• The onus to revert the presumption is a heavy one, a statement that express not legally bound is usually the answer to the contract being formed, referring to Bowerman v Association of British Travel Agents, 1996
• Special rules to be applied: (but Carlil) letters of comfort, letters of intent, honour clauses, and collective bargaining agmts
• General Rule: Presumption in favor of intention to create legal relations in business agreements

No Intention

• Pretoria Energy Co. v Blankney Estates Ltd (2022): Preliminary agreements without clear intention not binding

Yes Intention

• Edwards v Skyways(1964): Agreement w/ pilots' association legally binding despite "ex gratia" term.
• Snelling v John G Snelling Ltd(1973): Agreement between brothers in business context legally binding.
• Esso Petroleum Ltd v Commissioners of Customs and Excise (1976): Promotional offer by Esso legally binding.

Trade Unions

• Agreements not legally enforceable if unless stated in the agreement, referring to Ford Motor Co. v AUEFW (1969), National coal board v national union of Mineworkers (1986).
• Law; Trade Union and Labour Relations (Consolidation) Act 1992: collective is not binding unless in writing and states the parties intended enforceability.

Borderline Transactions

• No presumption either way-outcome depends on the particular circumstances.
• Where the presumption for or against exists, it is less strong than a non- commercial context.
• The onus relies on claimant to prove intention
• Yes Intention - Sadler v Reynolds (2005) Ghostwrite Autobiography
• No Intention - Blue v Ashley (2017) Promise in a pub is not legally binding
• Moorgate Capital Ltd v Sun European Partners LLP (2020): Agreement during phone conversation not legally binding.

Introduction to Consideration

• A definition - A statement of willingness to contract specific terms.
• Acceptance - A Agreement to offer terms.
• The consideration: Value something exchanged between parties.
• It is an intention To create legal relations - The Parties are legally intending to be bound

What is Consideration?

• Consideration, it is or to promise other parties- another promise of other. The exchange English law enforces bargains with the other gaining value and to provide a promise
• It is made to be valid
• Contained to a deed or
• It is supported in something with money or value Examples:

Shadwell v. Shadwell (1860)

• Facts: his uncle promise 150 pounds an year for marriage
• Held: The promising binding and is considered of value

2. Consideration Definitions

• It can be
• To provide profit, or to provide benefits to one party, to right a interest.
• Forbearance, and to make loss towards undertake or the others value.

Modern Definition (Dunlop: Pneumatic Tyre Co Ltd v Selfridge & Co. Ltd. (1915)

• The statement is "The price of the promise of one and to buy".

Key Characteristics

• Had the economic value and it must do and is not to fairness of evaluation
• Must be more sufficient and is to not must adequate

Consideration Rules

• Rule 1; The consideration has to lead at the end*
• A person that provides the consideration, can do a promise
• Case Example, Price v Easton (1833)
• Facts; it's a builder who promised to do a debt to the price to provide a new piece work piece. They do not succeed.
• Held; The could not to enforce the piece because he does not give and provided and is to more do it to a work piece
• Tweedle : Atkinson Case example (1861)
• Husbands to had the to go into enforcing it
• Has no gave the money for a promise

Rule 2: Has to the value of the law (but must need to be adequate.

• Example; Case, Chappel 8 coLtd v Nestle &. Co LTD (1960).
• Facts; Chocolate value of were used to promote a new record
• Held, the wrappers that are the validation economic wise of new promotion

Duty Sufficient Consideration: Existing Obligations

1. Duty and is to value a value of new the law

• Glassbook. Brothers and Glamagran case LTD. Provided General Duties Value police are made

2. The Contract Value is owed to you a Promises

• Stilk and Myrick (1809) the good, the new value that should not come into being if value of good a value for service is going to be rendered.

Important Exceptions, practical value to it

• Williams-Rofley brothers (1990).
• They can find a way to more benefits into payment to a new value. The new value that you get for paying is of additional money that if you can offer into for payment

Part Payment of debt (Pinnels Case 1602)

• The new value that that if it exists for not is bounded and not for parts but payments
• New consideration at something different, and not to be a place a new value for time or more, or into is something additionally for a new piece.
• Foakes and. Beer (1884).
• The main consideration is lower for debt but is something to add-in for consideration to the item Practical Benefits in Debt cases
• MWB V.Rock advertising, 2016

Rule 3

• the consideration is cannot do a test
• Considerations at return should provide additional performance

Consideration V Kenyon Case example (1890).

• Was upheld because it could not lead, and more expenses and for incurrence

Exceptions to the new to value

• They acted the on something for a promise requests.
• New for the expectations, and for commercial of Agreements
• Lampleigh-Braihwaite (1615)
• He was offered it with a pardon that was not enforceable

5.Summary of Considering the Valid of Rules

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6 Conclusion

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• The exception here is that a value of the a more value in to be paid

1. Introduction to Promissory Estoppel

• Key value- What is need here why is it needed
• Promises will always be made but it to provide consideration for enforcement of promise
• If more unfair it can into more value an action the party with value here at estoppel.
• The more value of a solution, and what can lead can be not fair to all.

Equity Solution To law

• Requires only a enforcmeent
• A more equity focusing values, and at the disrectiony values.
• You must come of what happens.

The Rise of Estoppel

• It's to provide on not for the more actiomn of more value in this thing that has to done with what you be.

The Foundation Of The Promise Of Estoppel (1877)

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