Full revision guide of contract law covering the following topics in depth:
-offer
-acceptance
-certainty
-consideration
-promissory estoppel
-contractual terms
-unfair contract terms
-mistake and agreement mistake
-misrepresentation
-misrepresentation remedies
-illegality and public pol...
A contract is a legally binding agreement between two or more persons to carry out an
exchange transaction
If a contract is not fully written, you need OFFER + ACCEPTANCE
Offer – definite statement by words/conduct that party willing to be contractually bound in
certain terms
Objective theory: Smith v Hughes (1870-71) LR 6 QB 597
o not what A meant but what B as a reasonable person would think A meant
Instead of being pre- contractual offer, statement may be invitation to treat, just a
negotiating statement
Unilateral and Bilateral Contracts
Unilateral – A offers B something and it is accepted by doing the act
Anyone accepting is not bound to do anything, entitled to receive what A offers if they do
the act
Bilateral - A makes offer to B, offer is a promise to do something, B accepts by promising
something to A, both parties bound once promises exchanged
Topic 2 – Acceptance
An unqualified expression of assent to the terms of the offer, by words or conduct
Mirror Image Rule: Hyde v Wrench (1840) 3 Beav 334
o ‘If acceptance is different, it is rejection and counter offer… offer can’t then be
accepted after the counter offer has been rejected.’
Requesting information is not a counter offer (Stevenson v McLean (1880) 5 QBD 346)
Communication of Acceptance
(a) Oral Acceptance
o Can be face to face or via phone call
o Must be heard but speaker can assume unless some reason why might not be e.g.,
Interfering noise
o Entores v Miles Far East Corporation [1955] 2 QB 327
(b) Instantaneous Communications
o Can be fax or telex
o Messages must be received but sender can generally assume it’s been received as
acceptors’ machine that prevents this
o Main issue ‘where’ contract concluded and ‘when’
(c) Postal rule
o Only applies where the parties contemplate using the postal service
o Only applies to bilateral contracts
o Acceptance is effective when mailed not when received, bad postal service then -
Adams v Lindsell (1818)
(d) Email Acceptance
o Message must be received and not have bounced back
(e) Web made Contracts
(f) Silence as Acceptance
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, The Battle of the Forms
Where written communication is passing back and forth between the contracting parties,
each party trying to convince the other party to accept its terms
Work Done but not Paid For
A dispute as to whether a contract has been made
BSC V CBE [1984] All ER 504
o unjust enrichment solution - party that receives benefit of other’s pre-contract work
must surrender value received to the other party
Revocation of Bilateral Offer
If open for specific period, lapses once the time has passed
If no time lapses, after reasonable time
Revocation is allowed any time before acceptance
No obligation to keep offer open for specified time, but offeree has given consideration if
there is an ‘option contract’
Revocation of Unilateral Offer
As unilateral offer is accepted by doing an act, the offer can be revoked any time before the
act is complete
Unfair on offeree who might have done much of the act of completion
Topic 3 - Certainty
When there is OFFER + ACCEPTANCE but something is missing, something left not agreed or
something is too vague to make a contract
Lock In and Lock Out Agreements
Lock in - duty to negotiate one party for indefinite period; too uncertain, no objective
standard to determine if party is negotiating properly
Lock Out - barred from negotiating with others, okay if for a finite period, if indefinite period
it is just the same as lock in
Intention to Create Legal Restrictions
Two rules
1. Social and family agreements only enforceable if parties make it very clear
2. Commercial agreements enforceable unless parties make it very clear they are not
Topic 4 - Consideration
What each party does/promises to do for the other in exchange for the other’s promise, but
the promise to deliver is not enforceable
Unilateral - do the act, Bilateral - make the promise
To justify remedy for failed expectation, you need to show something given for it
3
, Remedy for Breach of Contract - put innocent party into position it would have been in if the
contract was performed
Renegotiation
Two rules
o Pre-existing contractual duty
o Part payment of debt
Pre-existing Duty - A promises B more if B will perform existing contract with A
o Stilk v Myrick (1809) 2 Camp 817 - Cannot promise to do something that you’re
already contractually bound to do, if parties rescind contract and replace it with new
one that provides A to pay more to B for the same work - possibly enforceable
o Williams v Roffery Bros [1990] 1 QB 1 - Economic duress, came up with practical
benefit, practical benefit could form consideration
Part Payment - A promises to take part payment in full satisfaction of debt
o Foakes v Beer main case – House of Lords case, part payment of a debt is not good
consideration.
Topic 5 - Promissory Estoppel
Reliance
Where A makes representation to B, B believes it and acts on it
If B’s reliance is in exchange for A’s promise, that is consideration but usually B’s reliance not
in exchange so no contract
Unfair to give B no remedy, remedy should protect reliance interest and put B back to where
B was before representation
Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 - parties are already
in a contractual relationship, unfair to go, impractical to restore B to original position
To dismiss a statutory demand, you must show an arguable case as to why payment cannot
be made in full, Collier v Wright is not the deciding factor.
Topic 6 - Contractual Terms
Courts will interpret contractual terms considering the objective of the contract
In deciding when to depart from plain meaning, courts have regard to
o The type of contract they are interpreting (insurance, employment, etc.)
o Custom and trade conventions
Courts don’t consider any communication passed between parties while the contract was
being negotiated or the way parties performed the contract after it was made
Contractual Term v Mere Representation
Contractual Term
o A promise as to the truth of the statement - “I hereby guarantee that…”
o Ability to claim damages - Defendant will be liable automatically for breach of a term
o Measure of damages - ‘Expectation measure’ - Claimant will be put into the position
they would have been had the contract been performed properly
Mere Representation
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