Contract law elliot Quinn

The bestselling Elliott and Quinn series of law textbooks includes reliable and concise texts on Criminal Law, Contract Law, Tort Law and the English Legal System The authors draw on their extensive experience to bring an unbeatable combination of authority, readability and clarity to this series of student-friendly texts Written in a lively and engaging style, each book: ● explains the relevant law logically and clearly ● helps students to succeed in assessments and improve their legal skills This text is supported by mylawchamber which includes: For students: regular case and legislation updates, web-links, interactive self-test questions, key term flashcards and a glossary For lecturers: a testbank of multiple-choice questions that can be used to assess students’ progress All located at: www.mylawchamber.co.uk/elliottquinn ● looks at the context of law-making and its future direction It is essential for students on law and commercial degree programmes to have a clear understanding of contract law, yet the subject can be difficult to grasp for the newcomer This book clarifies the essential concepts behind the law, making it easier for you to understand and apply the legal rules Each chapter also includes discussion of problems with the current law and also considers the forces affecting contract law today, such as the increase of e-commerce and the growing impact of Europe, and how the law may need to reform to meet modern needs NEW TO THIS EDITION C AS E ● Leading case boxes help you identify and remember key cases and rulings R N A V I G AT O POWERED BY ● Chapter introductions identify core themes and concepts to remember Visit www.pearsoned.co.uk/casenavigator for unique online support that helps improve case reading and analysis skills in Contract Law ● Topical issue boxes to help put the legal system into context ● More diagrams to visually explain points and processes of law The LexisNexis element of Case Navigator is only available to those who currently subscribe to LexisNexis Butterworths services LEGAL DEVELOPMENTS Catherine Elliott is a qualified Barrister and Lecturer in Law at City University She has extensive experience of teaching law ● An examination of unfair bank charges ● The impact of pre-nuptial contracts following a divorce ● The most recent House of Lords’ decision on remoteness of damages (Transfield Shipping v Mercator Shipping (2008)) ● The Consumer Protection from Unfair Trading Regulations (2008) Frances Quinn is an award-winning journalist, with a particular interest and experience in law www.pearson-books.com Cover © Getty Images CVR_ELLI9352_07_SE_CVR.indd V I G AT O POWERED BY Recent important changes to the law have been fully analysed, including: Elliott & Quinn ABOUT THE AUTHORS A N Catherine Elliott & Frances Quinn C AS E Contract Law Contract Law SEVENTH EDITION R SEVENTH EDITION SEV EN TH EDITION Contract Law Catherine Elliott & Frances Quinn Elliott & Quinn Series 8/4/09 10:11:54 CONL_A01.qxd 4/1/09 2:25 PM Page i Contract Law CONL_A01.qxd 4/1/09 2:25 PM Page ii J^[;bb_ejjGk_ddI[h_[i \ehj^[X[ijijWhj_dbWm I]^hgZcdlcZYVji]dgiZVbYgVldci]Z^gZmiZch^kZZmeZg^ZcXZid Wg^c\VcjcWZViVWaZhZaZXi^dcd[iZmihi]Viegdk^YZidiVaXaVg^indci]Z XdgZVgZVhd[aVl# I]Z:aa^diiFj^ccHZg^Zh^hhjeedgiZYWnbnaVlX]VbWZgi]Vi ^cXajYZhgZ\jaVgjeYViZhidi]ZaVlVcYVgVc\Zd[gZhdjgXZh[gdb ^ciZgVXi^kZfjZhi^dch!ZmVbVYk^XZVcYlZWa^c`h![dghijYZcihidjhZ i]gdj\]djii]Z^gXdjghZ# ;dg[jgi]Zg^c[dgbVi^dcdgiddgYZg i]ZhZWdd`h!eaZVhZk^h^i/ mmm$f[Whied[Z$Ye$ka%bWm CONL_A01.qxd 4/1/09 2:25 PM 7th edition Page iii Contract Law Catherine Elliott and Frances Quinn CONL_A01.qxd 4/1/09 2:25 PM Page iv Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk First published in Great Britain 1996 Second edition published 1999 Third edition 2001 Fourth edition 2003 Fifth edition 2005 Sixth edition 2007 Seventh edition 2009 © Pearson Education Limited 1996, 2003, 2005, 2007, 2009 The rights of Catherine Elliott and Frances Quinn to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS Crown Copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland Law Commission Reports are reproduced under the terms of the Click-Use Licence ISBN: 978-1-4058-9935-2 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Elliott, Catherine, 1966– Contract law / Catherine Elliott and Frances Quinn – 7th ed p cm ISBN 978-1-4058-9935-2 (pbk.) Contracts–England Contracts–Wales I Quinn, Frances II Title KD1554.E44 2009 346.4202—dc22 2009003485 10 13 12 11 10 09 Typeset in 9.5/13pt Stone Sans by 35 Printed and bound by Ashford Colour Press Ltd., Gosport The publisher’s policy is to use paper manufactured from sustainable forests CONL_A01.qxd 4/1/09 2:25 PM Page v Brief contents Guided tour Preface Acknowledgements Table of cases Table of statutes Table of statutory instruments Table of EC legislation xiv xvii xviii xix xxix xxxi xxxii Introduction Part The formation of a contract Offer and acceptance Certainty Intention to create legal relations Capacity Formalities Consideration Part The contents of a contract 11 52 59 69 82 88 119 Terms of the contract Unfair contract terms 121 149 Part Vitiating factors 183 10 11 12 185 207 234 251 Misrepresentation Mistake Illegality Duress and undue influence Part The rights and liabilities of third parties 271 13 Third parties 273 v CONL_A01.qxd 4/1/09 2:25 PM Page vi Brief contents vi Part Discharge and remedies 295 14 Discharge of contract 15 Remedies 297 330 Part Consumer protection 387 16 Consumer contracts 389 Appendix: Answering examination questions Glossary Index 415 421 425 CONL_A01.qxd 4/1/09 2:25 PM Page vii Contents Guided tour Preface Acknowledgements Table of cases Table of statutes Table of statutory instruments Table of EC legislation xiv xvii xviii xix xxix xxxi xxxii Introduction Why we need contract law? The origins of contract law Freedom of contract Contract and fairness The objective approach The Human Rights Act 1998 The influence of Europe Reading list Reading on the internet 4 7 Part I THE FORMATION OF A CONTRACT Offer and acceptance Unilateral and bilateral contracts Offer Invitations to treat How long does an offer last? Acceptance Acceptance must be communicated Exceptions to the communication rule Ignorance of the offer Cross offers Time of the formation of the contract Offer and acceptance implied by the court Auctions, tenders and the sale of land How important are offer and acceptance? Problems with offer and acceptance 11 12 12 14 17 23 29 29 34 34 35 35 36 41 42 vii CONL_A01.qxd 4/1/09 2:25 PM Page viii Contents Answering questions Summary of Chapter Reading list Reading on the internet Certainty 52 Provision for clarification Terms implied by statute Previous course of dealing Reasonableness Custom The ‘officious bystander’ Removing minor uncertain terms 54 54 55 55 55 55 56 Answering questions Summary of Chapter Reading list 56 57 58 Intention to create legal relations 59 Social and domestic agreements Commercial agreements How important is intention to create legal relations? 60 62 66 Answering questions Summary of Chapter Reading list 66 67 68 Capacity 69 Minors Mental incapacity Corporations 70 75 76 Answering questions Summary of Chapter Reading list Reading on the internet 77 79 81 81 Formalities viii 44 47 50 51 82 Contracts which must be made by deed Contracts which must be in writing Contracts which must be evidenced in writing 83 83 84 Answering questions Summary of Chapter Reading on the internet 86 86 86 CONL_A01.qxd 4/1/09 2:25 PM Page ix Contents Consideration 88 What is consideration? Performance of an existing duty Waiver and promissory estoppel Agreement by deed Consideration and conditional gifts Problems with consideration The future of consideration Reform 89 95 102 107 108 108 110 111 Answering questions Summary of Chapter Reading list Reading on the internet 112 114 117 117 Part THE CONTENTS OF A CONTRACT 119 Terms of the contract 121 Express terms Oral statements Written terms Collateral contracts Oral and written statements Interpretation of express terms 122 122 125 127 128 128 Implied terms Terms implied in fact Terms implied in law Terms implied by custom Terms implied by trade usage Entire agreement clauses 131 131 134 135 135 135 The relative importance of contractual terms Conditions Warranties Innominate terms 137 137 138 138 Answering questions Summary of Chapter Reading list Reading on the internet 141 144 147 147 Unfair contract terms 149 Exemption clauses Common law controls Statutory controls 150 150 159 ix CONL_Z03.qxd 4/1/09 9:45 AM Page 426 Index cheques 279, 281–2 claimant’s choice, limits on 346–7 clause, effect of 154–5 collateral contracts 42, 127–8, 284–6, 289 collateral warranties 288, 289 collective bargaining agreements 65–6 Collins, Hugh 287, 289 commercial agreements 62–6 Common Frame of Reference for European Contract Law common law: breach 236–7 contracts voidable at 72–3 frustration 307–8 and mistake 208, 214, 215 and privity 275 and unsolicited goods 405–6 common law controls on exemption clauses 150–9 fundamental breach 157–8 incorporation by previous course of dealing 155–6 incorporation by reasonable notice 152–5 incorporation by signature 151–2 interpretation of 156–7 misrepresentation 158 oral promise, inconsistent 158 third parties 158–9 common law exceptions for third parties 279–86 agency 279–81 assignment 281 collateral contracts 284–6 damages on behalf of another 282–4 negotiability 281–2 novation 282 common law remedies 331–62 action for an agreed sum 357–8 restitution 358–62 see also damages 426 common mistake 208, 211–16, 223, 421 abolition, in equity 214 –16 application of doctrine 211–12 fundamental mistake 212–14 communication 29–33 compensation 277, 331–2, 348, 353–4, 372 competition 237, 238, 239 composition agreements 101 compulsion of the will 252–3, 255, 256 condition of goods, implied 394, 401, 402 conditional gifts 108 conditions of contract 137–41, 421 breach of 314, 397 subsequent 320–1 conduct 23, 104 and unilateral offers 23, 24 of offeror 29–30 confidence 366 confidentiality contracts 254–5, 263 consent to variation 277 consideration 66, 88–117, 126, 282, 319–20, 421–2 agreement by deed 107–8 can be a promise not to sue 94 –5 and conditional gifts 108 ‘executory’ and ‘executed’ 90 future of 110–11 must be of economic value 94 must be sufficient 93–4 must not be past 91–3 need not benefit promisor 90 partial failure 359–60 past consideration 111 problems with 108–10 promisor and promisee 89–90 reform of 111–12 waiver and promissory estoppel 102–7 see also performance of existing duty constructive knowledge 192, 260, 261 constructive notice, avoidance of 261–2 constructive trust 286 consumer contracts 389–414 consumer credit 406–7 consumer protection 403–5, 407–8 contracts for supply of services 399–401 hire contracts 401 manufacturers’ liability 401–5 and minors 70–1 unsolicited goods 405–6 see also sale of goods consumer credit 406–7 Consumer Protection Act 1987 403– Consumer Protection from Unfair Trading Regulations 2008 405 consumer surplus 349 consumer’s right to cancel (issue) 36 Consumers’ Association 404, 407 contempt of court 364 continuous duties, contracts involving 364 contra proferentern rule 156–7, 422 contract 422 made unfairly 364 more onerous 305 purports to confer a benefit 276–7 of speciality see agreement by deed to commit crime or tort 236 Contract Law: Misrepresentation, Nondisclosure and Breach of Warranty by the Insured (paper) 188 contract price 348 CONL_Z03.qxd 4/1/09 9:45 AM Page 427 Index Contracts (Rights of Third Parties) Act 1999 95, 276–9 contractual duties: existing, to a third party 101–2 to pay debts 98–100 to supply goods or services 98 contractual provision 305 contractual rights conferred on third parties 275–6 contrary to public policy 243 cooling-off period 36, 407 core terms 167–8, 175 corporations 70, 76–7, 422 correspondence with description 401 cost of cure 349–50 counter-offer 18, 22, 24, 26, 28 counter-restitution 197 cross offers 34–5 cross-purposes mistake 208, 216–23, 422 unilateral mistake involving mistaken identity 218–23 unilateral mistake over terms of contract 217–18 custom and certainty 55 damage (consumer law) 403 damages 198, 199–202, 331–57 on behalf of another 282–4 breach of implied duty of mutual trust and confidence 332, 335 expectation loss, quantification of 348–52 and indemnity 197 liquidated 367–8 loss, calculation of 344–7 must be inadequate 363 nominal 346, 349, 350, 360, 363 non-pecuniary loss 331–5 pecuniary loss 331 and product liability 174 and profit 371–2 profit made by defendant 352–7 third party rights to 278 dealing as a consumer 159–60 death of either party 303 death of offeree/offeror 19 debts, contractual duties to pay 98–100 declaration of intention 37 deed 2, 83, 107 defective performance 359 defective product 403 defences: defective products 403–4 third parties 278 description 401 destruction or unavailability of something essential 303 development risks defence 404 difference in value measure 344 digital/electronic signatures 85 Diplock test 212 Director-General of Fair Trading 166, 238 disappointment 331 discharge of contract 297–329 affirm or discharge, choice to 314–18 agreement 319–21 bilateral 319 complete 320 consideration 319–20 partial 320 performance 298–302 unilateral 319 see also frustration discomfort 335 disputed claims 100 distress 335, 343 distributive justice dividend 101 documents, loss of 198 domestic agreements 60–1, 66 drunkenness 70, 75 duration of offer 17–23 counter-offer 18 death of offeree/offeror 19 failure of a precondition 17–18 information, requests for 18–19 reasonable length of time 17 rejection 18 specified time 17 withdrawal of offer 19–23 duress 252–6, 278 claimant had no real choice but to enter the contract 255–6 claimant protested at time or shortly after contract was made 256 pressure exerted on contracting party 252–3 pressure exerted was illegitimate 253–5 pressure induced claimant to enter contract 255 see also economic duress economic duress 109, 111, 252–3, 256, 265, 422 economic theory of efficient breach 372 electronic commerce 85 employment obligations enforcement and third parties 278 enforcement orders 171–2, 407 engrossing entire agreement clauses 135–7, 202 entire performance rule 298–9 equitable claims 370 equitable doctrine of ‘laches’ (delay) 370 equitable estoppel 103 equitable principle 104 equitable remedies 362–7, 370 injunction 365–7 and minors 73–4 of rectification 224 specific performance 74, 363–5 427 CONL_Z03.qxd 4/1/09 9:45 AM Page 428 Index equity: exceptions 286 and mistake 208, 214–16 and privity 275 and promissory estoppel 103 Europe 7, 168, 187, 289 European Commission European Community Treaty 238 European Convention on Human Rights 6, 246 European Union 85, 150, 166, 238, 390, 404, 405 evidence about the parties 127 evidenced in writing 84–5 exceptional circumstances 355, 357 exchange of contracts 41 excluding implied terms in service contracts 401 exclusion clauses 202, 285, 422 unfair contract terms 150–1, 156–8, 160–2, 165–8 exemption clauses 150–65, 166, 170, 173, 174, 422 common law controls 150–9 interpretation of 156–7 statutory controls 159–65 third parties 284–6 expectation loss 348–52 expenses 308–9 express authority 279 express provision in contract 276 express terms 122–31, 132, 134, 137 consumer contracts 392, 397, 400 interpretation of 128–31 oral statements 122–5 written terms 125–7 extrinsic evidence see parol evidence rule face-to-face principle 219–21 factoring houses 281 428 ‘factory gate standard’ 397 failure of consideration 318 see also total failure failure of a precondition 17–18 failure to act 104 fairness 4–5, 167, 169, 171, 173 feelings, injury to see mental distress fiduciary relationship 189, 257 financial compensation see damages; indemnity financial loss see pecuniary loss Financial Ombudsman Service 172 fitness for purpose 393–5, 401 fizzy drinks (issue) 165 ‘floodgates’ argument 288 football (issues) 71–2, 111–12 foreseen and foreseeable events 306–7 forestalling form of notice 153–4 formal contract see agreement by deed formal justice formalities 82–7, 320–1 free trade promotion 239 free will 241, 287, 289 freedom of contract 4, 93, 422 fresh agreement 320 frustration 302–10, 359, 362 common law 307–8 contract more onerous 305 contractual provision 305 foreseen and foreseeable events 306–7 illegality 304 impossibility 303–4 Law Reform (Frustrated Contracts) Act 1943 308–10 pointlessness 304–5 self-induced 307 theory of 310 time of frustrating event 303 see also breach full refund see rescission fundamental breach 157–8 fundamental mistake 212–14, 215 future rights not destroyed 106 gambling 238–9 Gambling Commission 216 gazumping 43 General Product Safety Regulations 2005 404–5 general restraint in trade 237 good faith 169, 186–8 goods and services, contracts necessary for 70–1 goods and services, contractual duties to supply 98 gratuitous gift 107 gratuitous promise 2, 109, 287, 422 guarantees 74, 162, 401–2 hardship to defendant 363 Hedley Byrne principle 193–4 ‘Himalaya clauses’ 285 hire contracts 401 hire-purchase 406–7 honour clauses 64 housing market (issue) 225 Human Rights Act 1998 6–7 humiliation 331 hurt feelings 331 identical mistake see common mistake ignorance of offer 34 illegality 234–50, 304 both parties aware of 244 complexity of 245 contracts illegal at time of formation 235, 242–3 contracts illegal as performed 235, 243–5 and injustice 245–6 only one party aware of 244–5 reform of 246–7 and remoteness 235 severance 245 see also legal rules and public policy CONL_Z03.qxd 4/1/09 9:45 AM Page 429 Index illnesses 335 implication 133–4 implied authority 279, 280 implied condition of goods 394, 401, 402 implied duty of mutual trust and confidence, breach of 332, 335 implied promise 101, 103 implied terms 55, 211, 422 based on usage or custom 136–7 breach 397 in contracts for sale of goods 391, 392–5 in contracts for services 400–1 discharge of contract 310 in miscellaneous contracts 163 in sale and hire-purchase contracts 162 terms of contract 127, 133, 134, 135, 136, 137 implied warranty 211 imposed solution 310 impossibility 303–4 ‘in the course of a business’ 160, 391, 393, 394, 400 incapacity 361 inconvenience 335 incorporation: by previous course of dealing 155–6 by reasonable notice 152–5 by signature 151–2 indemnity and damages 197 indemnity clause 162, 422 indemnity payment 197, 199, 201 inducement 191–2 inequitable to enforce strict legal rights 105–6 information, requests for 18–19 injunction 365–7, 370 injustice 226–7, 245–6 innocent party 198, 228, 244–5, 313, 314–17 remedies 331, 335, 352, 353, 362 innominate terms 138–41, 401, 422 breach of 299, 314 insurance 278 insurance contracts (and issue) 187–8 insurance law 187–8 intention 122 to create a legal obligation 42 of the parties 44, 288–9 see also intention to create legal relations intention to create legal relations 59–68 agreements between husband and wife 60–1 agreements between parent and child 61 commercial agreements 62–6 importance of 66 social agreements 61–2 interests protected 370–1 intermediate terms see innominate terms international approach 289 internet shopping (issue) 85 interpretation 133–4, 226 invitation to tender 39–40 invitation to treat 14–17, 37 irrationality 288 Jewish arbitration procedure 198 Jimi Hendrix (issue) 354–5 judgment debt 99 jurisdiction clause 285–6 jurisdiction of the courts, contracts ousting 242 ‘just solution’ theory 310 justifiable reliance 289 laissez-faire doctrine 4, Law Commission 43, 112 illegality 245–7 insurance law 188 minors 75 remedies 360, 371, 372 restitution 209 third parties 275, 276 unfair contract terms 175 law of contract and tort 331 Law Reform Committee 228 Law Reform (Frustrated Contracts) Act 1943 308–10 Law Revision Committee 43, 111, 275, 310 lawful excuse 312 legal advice, independent 262–3, 265 legal complexity 289 legal rules and public policy, violation of 236–42 breach of legislation 237–9 contract is against public policy 239–42 contract violates a legal rule 236–7 legal tender 422 legislation, breach of 237–9 liability: for negligence 157, 161–2 under Consumer Protection Act 1987 403 Limitation of Actions (report) 371 limitation clause 150, 157, 164, 285, 422 limitation period 369, 370, 371, 397, 399 limitations on awards of damages 335–44 causation 335–6 mitigation 343–4 remoteness 336–43 limited liability partnerships 77 liquidated claim 100, 422 liquidated damages 367–8, 423 litigation, extended 288 loss: abnormal 341 calculation of 344–7 of chance 350–1 of enjoyment 282 of expectation 344–5, 347 non-pecuniary 331–5 normal 341 of opportunity damages 350–1 pecuniary/financial 331, 370 lost opportunity 354 429 CONL_Z03.qxd 4/1/09 9:45 AM Page 430 Index mandatory injunction 365–6 manifestly disadvantageous transaction 258–9 manufacturers’ liability 401–5 market price rule 348–9 Marks & Spencer (issue) 107 marriage, contracts prejudicial to status of 240 matrix of fact 129 memorandum of association 76 mental disorders 70 mental distress 332 mental incapacity 74, 75–6 mental suffering caused by physical inconvenience 334–5 merchantable quality 391, 392, 394, 402 ‘mere puffs’ 63–4 method of performance impossible 303–4 minors 70–5, 423 benefit, contracts of service for 71–2 contracts binding on 70–2 misrepresentation 151, 158, 163, 185–206, 423 actionable 191, 192 damages 199–202 excluding liability for 202–3 fraudulent 190, 192, 193, 197, 199, 200, 202, 223, 227 indemnity payment 197 inducement 191–2 innocent 195, 199, 201, 202 negligent 193–4, 195, 197, 200–2 rescission 196–8, 201–2 statement of fact 190–1 and terms 202 terms of the contract 122, 126, 136 third parties 278 under statute 194–5 untrue statement 186–90 mistake 207–33, 423 as to attributes 220 criticism and reform 225–6 430 of fact 209–11, 225 and frustration 303 fundamental 212–14, 215 as to identity 219 of law 209–11, 225 must induce contract 209 must precede contract 209 negativing consent see cross-purposes mistake objective principle 208, 219 relating to documents 223–5 see also common mistake; cross-purposes mistake; unilateral mistake mitigation 343–4, 372 of performance rule 299–302 Monopolies Commission 237 moral obligation 109 mutual mistake see common mistake mutuality principle 365 necessaries 70, 71 necessity for contract law necessity test for implied contract 36 negative (prohibitory) injunction 365, 366 negative stipulation, breach of 356 negligence 36, 402–3 negotiability 281–2 negotiation 25–7 New Zealand 255 Newcastle’s fans (issue) 111–12 no new rights created 106–7 nominal award 347 nominal damages 346, 349, 350, 360, 363 non est factum (‘this is not my deed’) 223–4, 423 non-identical mistake see cross-purposes mistake non-pecuniary loss 331–5 non-performance 162, 312 novation 282, 320, 423 objective approach 5–6 objective principle 208, 219 objectivity 44 objects clause 76 obligations 317–18, 319–20 other than to pay money 309–10 to pay money 308–9 offer and acceptance 11–51, 138 acceptance 23–9 acceptance must be communicated 29 auction sales 36–7 cross offers 34–5 counter-offer 18, 22, 24, 26, 28 duration of 17–23 exceptions to communication rule 29–33 ignorance of offer 34 implied by the Court 35–6 importance of 41–2 invitations to treat 14–17 offer 12–14, 27, 38, 66, 423 offers requiring communication of acceptance 31–2 problems with 42–4 sale of land 40–1 standing offer 39–40 tenders 37–40 termination of offer 23 terms of the offer 29 time of formation of the contract 35 unilateral contract and bilateral contract 12 offeree 12–13, 18, 19, 20, 22, 23, 28–30, 33–5, 43 offeror 12–13, 17, 19, 20, 27–33, 43 Office of Fair Trading 167, 169 171–3, 407 Director-General 166, 238 ‘officious bystander’ 44, 55–6, 131, 133–4 onerous terms 154–5 operation of the contract 127 CONL_Z03.qxd 4/1/09 9:45 AM Page 431 Index oral oral oral oral agreement 126, 224, 246 contract 83 promise, inconsistent 158 statements 122–5, 126, 127, 128, 135–6 origins of contract law 3–4 pari delicto, not being 243 parol evidence rule 125–7, 129, 225, 423 part-payment 99, 100, 109, 111 part-performance 22, 42, 300, 359, 362 partial failure of consideration 359–60 partial restraint in trade 237 partial revelation 189 passing of ownership 398–9 past consideration 111 payment: in advance 307–9, 310, 359 in part 99, 100, 109, 111 right to 318 by a third party 101 pecuniary loss 331, 370 Pecuniary Restitution on Breach of Contract (paper) 360 penalty clauses 368–9 ‘peppercorn’ principle 109 performance 162, 298–302, 317–18, 360 actual 344, 348 entire performance rule 298–9 of existing duty 95–102, 111 late 301 mitigation of performance rule 299–302 in part 22, 42, 300, 359, 362 personal 302, 303 physical 304 prevention of by other party 300–1 promised 344, 348 specific 278, 363–7, 370 substantial 299 unwanted 316 vicarious 302 wrongful prevention of 362 performance of an existing duty 95–102, 111 existing contractual duty to promisor 96–101 existing contractual duty to a third party 101–2 existing public duty 96–7 personal injury 371 personal performance 302, 303 personal services 364, 366–7 personal skill 281 personal (subjective) reasons 349 physical harm 331 physical inconvenience and discomfort 332 physical performance 304 Pinnel’s case 99–101 placed ‘on inquiry’ 260–1 pleasure, relaxation and peace of mind 332–4 pointlessness 304–5 Pollock, Sir Frederick 43 Posner 371 postal rule 30–3, 35 practicalities of remedies 371 precondition, failure of 17–18 pre-contractual negotiations 129 pre-existing contractual relationship 104 pre-nuptial contracts (issue) 240–1 pressure see duress previous course of dealing 55, 125 price paid for services 400 price reduction 396 price-variation clause 26 principal 279, 280–1 Privity of Contract: Contracts for the Benefit of Third Parties (report) 275 privity rule 158, 274, 275, 280, 282, 402, 423 arguments against 288–9 arguments for 287–8 procedural fairness product liability 174 profit: account of 353, 355–7 compensation for loss of 348 and damages 371–2 made by defendant 352–7 promise 89, 91–106, 112 breach of 312 gratuitous 2, 108, 109, 287, 422 implied 101, 103 inconsistent oral 158 for part-payment 100 secondary 43 to keep an offer open 112 will be relied upon by the promisee 112 promised performance 344, 348 promisee 89–90, 93, 96, 105, 109, 112, 278 promisor 89–90, 91, 96, 105, 108, 112, 287 promissory estoppel 102–7, 110, 111, 320 property 400–1 post-nuptial agreement 241 proving custom 127 public at large, offers to 13–14 ‘public interest’ exception 246 public life, contracts tending to encourage corruption in 242 public safety, contracts prejudicial to 241–2 quality, mistake as to 214 quantum meruit (as much as is deserved) 244, 300, 306, 358, 360–2, 423 ‘reasonable contemplation’ test 336 reasonable notice 103, 107, 125 reasonable reliance on a promise 112 reasonable sum 355 reasonableness 54, 55, 162, 163–5, 174, 202, 237 431 CONL_Z03.qxd 4/1/09 9:45 AM Page 432 Index ‘reasonably foreseeable’ 339, 342 reciprocal rights, lack of 287 rectification 126, 224–5 referential tender 38 reform: consideration 111–12 illegality 246–7 minors 75 mistake 225–8 third parties 275 unfair contract terms 174–5 registered company 76–7, 423 regrating rejection of goods 396–8 of offer 18 of offer to perform 300 release under seal 369 reliance 105 reliance loss 345–6 relief of undue influence 264 remedies 330–85 action for an agreed sum 357–8 against minors 73–4 agreed by the parties 367–9 for breach of Sale of Goods Act 1979 395–8 for breach of Supply of Goods and Services Act 1982 implied terms 401 in common law 331–62 extinction of 369–70 problems with 370–2 restitution 357–62 undue influence 264 see also equitable remedies remoteness 200, 336–43, 346 of damages 200–1 and illegality 235 repair of goods 396–7 replacement 396 representation 122, 124, 125, 128, 423 repudiation 313, 315, 316 breach 313–14 wrongful 358 rescission 196–7, 201–2, 396, 397 bars to 197–9 432 restitution 198, 209, 225, 353, 354, 358–62, 372 Restitution: Mistakes of Law and Ultra Vires Public Authority Receipts and Payments (report) 209 restraint of trade, contracts in 236–7 restriction of contracting parties’ rights 287 restrictive covenants 278–9, 286 restrictive trade agreement 238 revocation of offer 19–23, 30, 33, 42–3 right in equity (trust) 243 Robbie Williams (issue) 313 –14 Royal Charter, corporations formed by 77 sale by description 392 sale of goods 318, 390–99 in the course of a business 391 excluding implied terms in contracts of sale 398 implied terms in contracts for the sale of goods 392–5 passing of ownership 398–9 remedies for breach of Sale of Goods Act 1979 395–8 sale of land 40–1, 318 sale ‘subject to contract’ 40–1 sample 395, 401 satisfaction 320, 369, 421 satisfactory quality 135, 165, 391, 392–3, 398, 401 scratch cards (issue) 155 services 318, 399–401 severable contract 245, 299–300, 423 sexual immorality, contracts promoting 240 shared mistake see common mistake shared winnings 62 shopping 15–17 signature 125, 152 electronic 85 silence 104, 189–90, 406 ‘simple alias’ 222 simple contracts 107 social agreements 61–2 solus agreement 237 special circumstances 339 special knowledge and skill 123 specialty contract 423 specific performance 278, 363–7, 370 Spice Girls (issue) 195 statement: of fact 190–1 importance of 123 of intention 191 of opinion 190 untrue 186–90 see also oral statements status society statutory controls on exemption clauses 159–65 dealing as a consumer 159–60 ‘guarantees’ of consumer goods 162 implied terms in miscellaneous contracts 163 implied terms in sale and hire-purchase contracts 162 indemnity clauses 162 misrepresentation 163 non-performance 162 reasonableness 163–5 statutory corporation 77, 423 statutory rights of third parties 276–9 statutory time limits 369–70, 371 strength of the inducement 125 subject matter, mistake as to existence of 213 subject to contract 424 subsequent falsity 188 CONL_Z03.qxd 4/1/09 9:45 AM Page 433 Index summary judgment 358 suspension notice 405 tax 351–2 telephone 31, 32 telex 31, 32 tender of money 301 tender of performance 300 tenders 37–40 tennis court brawl (issue) 130–1 terms of the contract 121–48, 424 collateral contracts 127–8 conditions 137–8 entire agreement clauses 135–7 implied by custom 135 implied by statute 54 implied by trade usage 135 implied in fact 131–4 implied in law 134–5 innominate terms 138–41 oral and written statements 128 unusual 154–5 warranties 138 see also express terms; unfair contract terms test of intention 221 third parties 95, 273–94 agency 279–81 assignment 281 bills of exchange 279 collateral contracts 284–6 common law controls 158–9 contractual rights conferred on 275–6 covenants relating to land 278–9 damages on behalf of another 282–4 exceptions in equity 286 innocent 228 insurance 278 negotiability 281–2 novation 282 privity rule 274, 287–9 reform of 275 rights 198 statutory rights 276–9 and undue influence 259–63 ‘ticket cases’ 153 tickets for transport 16–17 ‘tied garage’ agreements 237 time: breach of terms concerning 301–2 of formation of the contract 35 is of the essence 301–2 limits 369–70, 371, 404 of notice 152–3 offer remains open 17 passage of 369 for performance 302, 400 timetables for transport 16–17 timing of the statement 124 title 392, 401 mistake as to 213–14 tort: damages 200 of deceit 74 law of 339, 345 and law of contract 331 and minors 74 total failure of consideration 73, 358–9, 360, 392 transfer document (property) 41 transferred property 263–4 transport, timetables and tickets for 16–17 Treitel, Professor 5, 31, 33, 287 trust: constructive 286 relationship of 257, 366 trust devices 289 uberrimae fidei (‘of utmost good faith’) 186, 187, 424 ultra vires (‘outside the powers’) 76, 424 unavailability of party 303 uncertainty and illegality 246 undue influence 256–65 actual 256–7, 258–9 bargaining power, inequality of 265 presumed 257–9 relief, bars to 264 remedies 264 and third parties 259–63 transferred property 263–4 unenforceable contract 242, 243 unfair commercial practices 405 unfair contract terms 149–82 dangerous goods 174 product liability 174 reform 174–5 Unfair Contract Terms Act 1977 159–65, 173– ‘unfair term’, defining 168–70 Unfair Terms in Consumer Contracts Regulations 1999 166–74 see also exemption clauses Unfair Contract Terms Act 1977 159–65 compared with Unfair Terms in Consumer Contracts Regulations 1999 173–4 Unfair Contract Terms Unit 172 unfair practices 405 Unfair Terms in Consumer Contracts Regulations 1999 166–73 application 166–8 compared with Unfair Contract Terms Act 1977 173–4 effect 171 enforcement 171–2 ‘unfair term’, defining 168–70 Unfair Terms in Contracts (report) 175 unfairness 168, 172–3 unilateral contract 12, 29, 38, 90, 112, 424 acceptance of an offer 24–5 advertisements 14–15 third parties 287 withdrawal of an offer 22–3 433 CONL_Z03.qxd 4/1/09 9:45 AM Page 434 Index unilateral discharge 319 unilateral mistake 216 involving mistaken identity 218–23 over terms of contract 217–18 and rectification 225 unilateral offer 38, 42–2 United States 34, 43, 61, 289, 332 unjust enrichment 289, 353, 358 unliquidated claim 100, 424 unsolicited goods 405–6 utmost good faith, contracts requiring 186–8 434 valuable benefit 309–10 very young children 74 void contract 362, 424 voidable contract 424 voluntary assumption of responsibility 189–90 waiver 102–7, 111, 320 war cancellation clause 345 warranty 138, 141, 424 of authority 281 breach of 299, 314, 397 collateral 288, 289 implied 211 Wayne Rooney (issue) 71–2 Williston, Professor 66 winning the lottery (issue) 62 worry 335 written agreements 126–7 written contracts: and mistake 221–3 need for 83–4 and oral statements 127 and rectification 225 written document and rectification 224 written material 125 written promise 111 written statements 128, 135 written terms 125–7 CONL_Z03.qxd 4/1/09 9:45 AM Page 435 CONL_Z03.qxd 4/1/09 9:45 AM Page 436 CONL_Z03.qxd 4/1/09 9:45 AM Page 437 CONL_Z03.qxd 4/1/09 9:45 AM Page 438 CONL_Z03.qxd 4/1/09 9:45 AM Page 439 CONL_Z04.qxd 4/1/09 2:25 PM Page 440