Contract Law

355 Pages·2007·5.21 MB·English

by  Mary Charman

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Contract Law
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Contract Law
Fourth edition
Mary Charman
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Published by
Willan Publishing
Culmcott House
Mill Street, Uffculme
Cullompton, Devon
EX15 3AT, UK
Tel: [phone]
Fax: [phone]
e-mail: [email protected]
Website: www.willan.publishing.co.uk
Published simultaneously in the USA and Canada by
Willan Publishing
c/o ISBS, 920 NE 58th Ave, Suite 300,
Portland, Oregon 97213-3786, USA
Tel: [phone]
Fax: [phone]
e-mail: [email protected]
Website: www.isbs.com
© Mary Charman, 2007
The right of Mary Charman to be identified as the author of this book has been asserted by her in
accordance with the Copyright, Designs and Patents Act of 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 the prior written permission of the Publishers or a licence permitting copying in
the UK issued by the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London
EC1N 8TS.
First edition published 2001
Second edition published 2002
Third edition published 2005
Fourth edition published 2007

ISBN 978-1-84392-358-9 paperback
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Project managed by Deer Park Productions, Tavistock, Devon
Typeset by Pantek Arts, Maidstone, Kent
Printed and Bound by TJ International, Padstow, Cornwall
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Contents
Preface xi
Table of Cases xiii
Table of Statutes xix
1 Principles of the law of contract 1
Why do we need a law of contract? 1
Are all promises enforced by law? 2
The form of a contract 3
The basis of contract law 3
Part 1:The formation of a contract 5
2 Offer and acceptance 7
Offer 7
Offers and ‘non-offers’ 10
Termination of an offer 13
Acceptance 20
Certainty in a contract 31
Auction sales 32
Tenders 34
Contracts for the sale of land 35
Some non-standard situations 36
Distance trading 39
Electronic trading 40
Summary 41
Questions 44
3 Consideration 46
Executed and executory consideration 47
Consideration must be sufficient but need not be adequate 47
Consideration must not be vague 48
Consideration must move from the promisee 49
Past consideration 49
Forebearance to sue 51
Performance of an existing duty 52
Part-payment of a debt 56
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vi Contract law
The current state of the doctrine 63
Summary 64
Questions 65
4 Legal intent 67
Social and domestic arrangements 67
Commercial agreements 71
Summary 74
Questions 75
5 Capacity 77
Corporations 78
Mental disability and intoxication 78
Diplomats and sovereigns 79
Minors 80
General concerns 89
Summary 89
Questions 91
Part 2:The contents of a contract 93
6 Incorporation of terms 95
Terms and representations 95
Incorporating terms into oral contracts 97
Written contracts 101
Implied terms 102
Collateral contracts 106
Summary 106
Questions 108
7 Types of terms within a contract 109
Conditions and warranties 109
The effect of a breach 110
Condition or warranty? 110
Terms specified by the parties 111
Reference to statute 112
Consideration of the terms by the courts 112
‘Course of dealing’ 113
Innominate terms – the Hong Kong Firapproach 113
The debate continues 115
Summary 117
Questions 118
8 Exemption clauses 119
Incorporation 120
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Contents vii
Construction 121
Legislation 122
The Unfair Contract Terms Act 1977 122
The Unfair Terms in Consumer Contract Regulations 1999 126
The current position 128
Summary 129
Questions 131
9 Privity of contract 132
The rule of privity 132
Established exceptions to the doctrine of privity of contract 136
Attempts to avoid privity of contract 138
The Contracts (Rights of Third Parties) Act 1999 141
Summary 144
Questions 145
Part 3:Vitiating factors 147
10 Duress and undue influence 149
Duress 149
Undue influence 154
Summary 162
Questions 164
11 Misrepresentation 166
Representations and terms 166
Definition 166
Silence and misrepresentation 170
Misrepresentation pa ssed on via a third party 174
Inducement 174
Remedies 174
Fraudulent misrepresentation 175
Non-fraudulent misrepresentation 176
The Misrepresentation Act 1967 177
Indemnity 178
Rescission 179
Bars to rescission 179
Comparison with remedies for breach of contract 181
Summary 181
Questions 183
12 Mistake 185
Common mistake 185
Where the subject matter is non-existent 186
Mistake over title 187
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viii Contract law
Mistake over quality of subject matter 188
Mutual mistake 190
Unilateral mistake 191
Mistake relating to documents 195
The doctrine of mistake in general 196
Summary 197
Questions 198
13 Illegality 200
The nature of illegality 200
Restraint of trade 201
The effect of European law 205
Summary 206
Questions 207
Part 4:Discharge and remedies 209
14 Discharge of a contract 211
Performance 211
Agreement 214
Breach 215
Frustration 216
Summary 222
Questions 223
15 Remedies 225
Damages 225
Basis of assessment 226
Mental distress and non- pecuniary loss 227
Remoteness of damage 228
Mitigation 229
Other remedies 229
Stop now orders 230
Summary 230
Questions 232
Part 5:Consumer protection 233
16 Consumer protection 235
The contract 236
The consumer 236
The Sale of Goods Act 1979 as amended by the Sale and
Supply of Goods Act 1994 237
The Supply of Goods and Services Act 1982 243
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Contents ix
The Consumer Protection Act 1987 243
The Unfair Contract Terms Act 1977 245
The Unfair Terms in Consumer Contract Regulations 1999 247
Consumer protection other than through the law of contract 247
The current state of consumer protection 248
Summary 249
Questions 252
Part 6:General questions on contract law 253
17 Additional questions 254
Part 7:Studying contract law 259
18 Contract law in context 260
Fairness in contract law 261
Law and morals 262
Policy issues 263
Contextual skills in examination 264
Module 6: concepts of law, for AQA 264
19 Sources of contract law 265
Case law 265
Statute law 265
European law 266
OCR Special study: synoptic assessment based on legal sources 266
A strategy for using the material 279

20 Key skills 283
Key skills to be assessed 283
Answers guide 290
Legal terms and expressions 328
Legal resources 332
Index 335