Contract Law Key info, Statutes, Cases, Academics, Judges, EXPAND [F = facts, D = decision] Syllabus: (I) Formation of Contracts; (II) Requirements for a Binding Contract; (III) Privity of Contract and Third-Party Effects; (IV) Terms and Misrepresentation; (V) Mistake; Section I: Formation of Contracts (1) Intro; (2) Offer; (3) Acceptance; (4) Termination of an offer; (5) Special Cases; (6) Certainty and 'agreements to agree'; (7) Modern Commercial Approach to agreement; (8) Formalities (1) Intro - "A contract is an agreement giving rise to obligations which are enforced or recognised by law" (Peel, 2015)ff - Classical contract law elements; reciprocal agreement between parties, obligations are consensual and based on intentions, freedom of contract (issues now as modern times sees more state intervention) - Modern contract law: good faith notion, freedom of contract still vital - Freedom of contract: choice to enter contract & no liability without consent embodied in a valid contract - Contract has an important function of securing that expectations created by a promise of future performance are fulfilled, or compensation will be paid for its breachff - Damages not punitive (punishing breaker) but are compensatory in nature (place the claimant in the same situation as if the contract had been performed)ff - Contracts are voluntary agreements: requiring consensus ad idem (meeting of minds)ff - Essential agreements: Agreement [offer + acceptance], intention to create legal relations, considerationsff - Objective test considers whether a reasonable man would believe the parties entered into a contract, through observing their objective intentionsff o Smith v Hughes (1871) Judge Blackburn stated that it is the objective intentions, not the actual intentions, that a reasonable man considersff (Thus it is an objective test) o The Hannah Blumenthal [1983] Lord Diplock stated "what is necessary is the intention of each as it has been communicated to, and understood by the other". - Traditionally, to approach an agreement there must be and offer and an acceptance But Lord Steyn in Percy Trentham Ltd v Archital Luxfer Ltd [1993], where transactions are performed [executed] rather than being promised to be performed [executory], provides evidence of the intention to enter into legal relationsff (2) Offer - An offer is "An expression of willingness to contract on specified terms, made with the intention that it should become binding as soon as it is accepted by the person to whom it is addressed" (Peel, 2015)ff - Offers differ from invitations to treat (willing to negotiate but not to be bound by the terms) Gibson v Manchester City Council [1979] F: response to enquiry "council may be prepared to sell you the house for X ... "ff Also stated "this letter should not be regarded as a firm offer of a mortgage"ff Policy then reversed by new labour council, only kept legally binding contractsff D: Hol appeal - reversed decision due to invitation to treat lacking specific language, being open ended ("may"), thus not an offerff 1
-> Bigg v Boyd Gibbins [1971] agreement binding due to "I would accept X for