1
Contract Law
LECTURE 1: INTRODUCTION TO CONTRACT LAW............................................................................................ 1
LECTURE 2: AGREEMENT; OFFER AND ACCEPTANCE.......................................................................................9
LECTURE 3: TERMINATION OF OFFERS AND ACCEPTANCE............................................................................24
LECTURE 4: CERTAINTY AND INTENTION TO CREATE LEGAL RELATIONS........................................................36
LECTURE 5: CONSIDERATION....................................................................................................................... 48
LECTURE 6: CONSIDERATION PT 2 AND PROMISSORY ESTOPPEL..................................................................57
LECTURE 7: PRIVITY..................................................................................................................................... 66
LECTURE 8: CONTRACTUAL TERMS (IDENTIFYING TERMS)............................................................................73
LECTURE 9: CONTRACT TERMS II – EXEMPTION CLAUSES AND STATUTORY CONTROLS ON UNFAIR TERMS...94
LECTURE 11 CRITICAL PERSPECTIVES ON CONTRACT LAW & PROBLEM SOLVING........................................107
LECTURE 12 AND 13 MISREPRESENTATION................................................................................................110
IDENTIFYING A MISREPRESENTATION........................................................................................................ 115
................................................................................................................................................................. 115
LECTURES 14 AND 15: DURESS & UNDUE INFLUENCE.................................................................................119
LECTURE 16: MISTAKE............................................................................................................................... 131
LECTURE 17: FRUSTRATION....................................................................................................................... 144
LECTURE 18: TERMINATION FOR BREACH..................................................................................................153
LECTURE 19: DAMAGES............................................................................................................................. 164
LECTURE 20: REMEDIES FOR BREACH - SPECIFIC PERFORMANCE................................................................172
LECTURE 21: ADDRESSING CONTRACT LAW ESSAY QUESTIONS..................................................................179
Lecture 1: Introduction to Contract Law
Learning Outcomes
Understand the structure and expectations in the course
Discuss the key components of the course including the method of learning,
assessments etc. including an identification of possible issues in factual matrix
relating to Jamal
Define a contract (whether positively or negatively)
Discuss the role and function of contracts
Critically discuss the theories and models of contract law
Issues throughout the course
When does an offer exist?
Certainty
Potential of holding goods for one party
Conditional acceptance
Can one by bound by silence?
Dr E Chloe Romanis Durham Law School (2021-2022)
, 2
How is an agreement sealed? By conduct?
Potential distinction between a condition and a warranty
Intention to create legal relations
Exemption clauses
Limiting liability for damage
Excluding liability for negligence
Promissory estoppel – attempting to change an already executed contract
Privity of contract
What is a Contract?
● Def. a promise or a set of promises that create an agreement
binding on the parties and protected by the law
● Brownsword (2000): Key concepts:
(i) ability to recognise one when one sees it;
(ii) an enforceable agreement;
(iii) a thing anchored to the concept of enforceability;
(iv) bargained-for exchanges
● Poole (2016): Legally enforceable binding agreement
● Restatement of Contracts (1932): Promise or set of promises for
which the law provides a remedy
3 elements from a contract
1. Promise
a. One-sided
b. Emphasizes the seriousness of undertaking given by the
promisor
2. Agreement
a. Bilateral / multilateral
b. Emphasizes the consensus between contract parties as to
their future rights and liabilities
3. Recognition by law (can be understood in 2 senses)
a. The state which provides the legal apparatus to enforce
contracts
b. Whatever the parties intend, if a disagreement lands the
parties in court, it is contract law that determines
i. Whether, when, and what the parties have agreed
ii. Whether one party can escape from the contract
iii. How breach should be remedied
iv. What happens when the contract is silent or uncertain
on a disputed matter
Legal questions arising in the life of a contract
1. Was a contract made?
2. Can a contract be set aside?
3. Is the challenged term enforceable?
Dr E Chloe Romanis Durham Law School (2021-2022)
, 3
a. No - term is unenforceable but try misrepresentation
4. Was the term breached
a. No - contract may be a) frustrated or b) valid/binding on both
parties
5. Can a third party beneficiary claim for the breach?
6. Can and does the innocent party elect to end the contract
a. No - contract remains binding. Innocent party may get
damages, specific performance, or agreed remedy
b. Yes - contract is terminated. Innocent parties may get
damages or agreed remedy.
Contract law in private law
- Torts - rights one person has before there was any contract with
the person who allegedly infringed those rights
- Contract - rights arise from legally binding agreements, deals with
voluntary agreements between parties
- Restitution -
- Property -
Roles and functions of Contract Law
Ensures stability in the enforcement of promises
EXAMPLE: Party receives benefit of the contract but does not
perform the burden under the contract – A sells car to B – B
receives the car but refuses to pay for the car
Allocation of risk where the circumstances may be within the
parties’ control
EXAMPLE: A, a farmer, contracts to provide 10,000 bales of hay to
B; A knows that if he is unable to cut and dry the grass within tight
deadlines, that he would not be able to render performance under
the contract; thus, within the contract, he includes some clause
which may reduce his full liability if full performance is not rendered
Allocation of risk where the circumstances may be outside
the parties’ control
EXAMPLE: A offers to sell B a car but before the car is delivered, it is
struck by lighting and explodes; A may be able to use the contract
(and by extension the doctrine of frustration) to avoid the liability in
the event that this occurs
Must every contract be written?
General rule is no. Exceptions: contracts linked to legislative enactments; contracts which
are not enforceable unless evidenced by writing.
Theories
The Purpose of Theory in Contract Law
Dr E Chloe Romanis Durham Law School (2021-2022)
, 4
Helps us to understand why the law is giving effect to the parties’ agreement
Helps us to understand why the law refuses to give effect to what one or more party
believed to be a contract
Helps us to understand how the court would decide a future case
Some theories of Contract Law
Will
theory?
Conse-
Reliance
quential-
ism? theory?
Areatic Equity
? Theory
Deon-
tology
Will Theory/‘Promise Principle’
Gives effect to a person’s exercise of their free will
Where a person’s free will has been affected, the court will not give effect to the
underlying agreement
Application: On the basis of theory, the court would not enforce a contract where
there is misrepresentation as the individual (unknown to them) has not been
allowed to exercise his/her free will in light of the true affairs.
Chen-Wishart (2018)
Can explain
Who is affected by a contract and why third parties are generally excluded
When the parties become bound (based on their promises)
Why only promises and not merely statements are binding – I will fix your car vs I
promise to fix your car
Contents of the contract (whatever the parties agreed)
Doctrines like misrepresentation as there is a defect in consent
Why the courts can compel performance
Cannot explain
Inconsistency with objective test of intention (We will do this next week)
Why the promise should benefit other than on the basis of the statement of the
promise
Dr E Chloe Romanis Durham Law School (2021-2022)
Contract Law
LECTURE 1: INTRODUCTION TO CONTRACT LAW............................................................................................ 1
LECTURE 2: AGREEMENT; OFFER AND ACCEPTANCE.......................................................................................9
LECTURE 3: TERMINATION OF OFFERS AND ACCEPTANCE............................................................................24
LECTURE 4: CERTAINTY AND INTENTION TO CREATE LEGAL RELATIONS........................................................36
LECTURE 5: CONSIDERATION....................................................................................................................... 48
LECTURE 6: CONSIDERATION PT 2 AND PROMISSORY ESTOPPEL..................................................................57
LECTURE 7: PRIVITY..................................................................................................................................... 66
LECTURE 8: CONTRACTUAL TERMS (IDENTIFYING TERMS)............................................................................73
LECTURE 9: CONTRACT TERMS II – EXEMPTION CLAUSES AND STATUTORY CONTROLS ON UNFAIR TERMS...94
LECTURE 11 CRITICAL PERSPECTIVES ON CONTRACT LAW & PROBLEM SOLVING........................................107
LECTURE 12 AND 13 MISREPRESENTATION................................................................................................110
IDENTIFYING A MISREPRESENTATION........................................................................................................ 115
................................................................................................................................................................. 115
LECTURES 14 AND 15: DURESS & UNDUE INFLUENCE.................................................................................119
LECTURE 16: MISTAKE............................................................................................................................... 131
LECTURE 17: FRUSTRATION....................................................................................................................... 144
LECTURE 18: TERMINATION FOR BREACH..................................................................................................153
LECTURE 19: DAMAGES............................................................................................................................. 164
LECTURE 20: REMEDIES FOR BREACH - SPECIFIC PERFORMANCE................................................................172
LECTURE 21: ADDRESSING CONTRACT LAW ESSAY QUESTIONS..................................................................179
Lecture 1: Introduction to Contract Law
Learning Outcomes
Understand the structure and expectations in the course
Discuss the key components of the course including the method of learning,
assessments etc. including an identification of possible issues in factual matrix
relating to Jamal
Define a contract (whether positively or negatively)
Discuss the role and function of contracts
Critically discuss the theories and models of contract law
Issues throughout the course
When does an offer exist?
Certainty
Potential of holding goods for one party
Conditional acceptance
Can one by bound by silence?
Dr E Chloe Romanis Durham Law School (2021-2022)
, 2
How is an agreement sealed? By conduct?
Potential distinction between a condition and a warranty
Intention to create legal relations
Exemption clauses
Limiting liability for damage
Excluding liability for negligence
Promissory estoppel – attempting to change an already executed contract
Privity of contract
What is a Contract?
● Def. a promise or a set of promises that create an agreement
binding on the parties and protected by the law
● Brownsword (2000): Key concepts:
(i) ability to recognise one when one sees it;
(ii) an enforceable agreement;
(iii) a thing anchored to the concept of enforceability;
(iv) bargained-for exchanges
● Poole (2016): Legally enforceable binding agreement
● Restatement of Contracts (1932): Promise or set of promises for
which the law provides a remedy
3 elements from a contract
1. Promise
a. One-sided
b. Emphasizes the seriousness of undertaking given by the
promisor
2. Agreement
a. Bilateral / multilateral
b. Emphasizes the consensus between contract parties as to
their future rights and liabilities
3. Recognition by law (can be understood in 2 senses)
a. The state which provides the legal apparatus to enforce
contracts
b. Whatever the parties intend, if a disagreement lands the
parties in court, it is contract law that determines
i. Whether, when, and what the parties have agreed
ii. Whether one party can escape from the contract
iii. How breach should be remedied
iv. What happens when the contract is silent or uncertain
on a disputed matter
Legal questions arising in the life of a contract
1. Was a contract made?
2. Can a contract be set aside?
3. Is the challenged term enforceable?
Dr E Chloe Romanis Durham Law School (2021-2022)
, 3
a. No - term is unenforceable but try misrepresentation
4. Was the term breached
a. No - contract may be a) frustrated or b) valid/binding on both
parties
5. Can a third party beneficiary claim for the breach?
6. Can and does the innocent party elect to end the contract
a. No - contract remains binding. Innocent party may get
damages, specific performance, or agreed remedy
b. Yes - contract is terminated. Innocent parties may get
damages or agreed remedy.
Contract law in private law
- Torts - rights one person has before there was any contract with
the person who allegedly infringed those rights
- Contract - rights arise from legally binding agreements, deals with
voluntary agreements between parties
- Restitution -
- Property -
Roles and functions of Contract Law
Ensures stability in the enforcement of promises
EXAMPLE: Party receives benefit of the contract but does not
perform the burden under the contract – A sells car to B – B
receives the car but refuses to pay for the car
Allocation of risk where the circumstances may be within the
parties’ control
EXAMPLE: A, a farmer, contracts to provide 10,000 bales of hay to
B; A knows that if he is unable to cut and dry the grass within tight
deadlines, that he would not be able to render performance under
the contract; thus, within the contract, he includes some clause
which may reduce his full liability if full performance is not rendered
Allocation of risk where the circumstances may be outside
the parties’ control
EXAMPLE: A offers to sell B a car but before the car is delivered, it is
struck by lighting and explodes; A may be able to use the contract
(and by extension the doctrine of frustration) to avoid the liability in
the event that this occurs
Must every contract be written?
General rule is no. Exceptions: contracts linked to legislative enactments; contracts which
are not enforceable unless evidenced by writing.
Theories
The Purpose of Theory in Contract Law
Dr E Chloe Romanis Durham Law School (2021-2022)
, 4
Helps us to understand why the law is giving effect to the parties’ agreement
Helps us to understand why the law refuses to give effect to what one or more party
believed to be a contract
Helps us to understand how the court would decide a future case
Some theories of Contract Law
Will
theory?
Conse-
Reliance
quential-
ism? theory?
Areatic Equity
? Theory
Deon-
tology
Will Theory/‘Promise Principle’
Gives effect to a person’s exercise of their free will
Where a person’s free will has been affected, the court will not give effect to the
underlying agreement
Application: On the basis of theory, the court would not enforce a contract where
there is misrepresentation as the individual (unknown to them) has not been
allowed to exercise his/her free will in light of the true affairs.
Chen-Wishart (2018)
Can explain
Who is affected by a contract and why third parties are generally excluded
When the parties become bound (based on their promises)
Why only promises and not merely statements are binding – I will fix your car vs I
promise to fix your car
Contents of the contract (whatever the parties agreed)
Doctrines like misrepresentation as there is a defect in consent
Why the courts can compel performance
Cannot explain
Inconsistency with objective test of intention (We will do this next week)
Why the promise should benefit other than on the basis of the statement of the
promise
Dr E Chloe Romanis Durham Law School (2021-2022)
