Law of contract

587 Pages·2007·3.561 MB·English

by  Paul Richards

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POWERED BY
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Paul Richard’s Law of Contract, now in its eighth edition, is a trusted,
clear and engaging explanation of the main principles of contract
law. This area of law is growing in complexity and importance, and
it is essential that you gain a firm grasp of the main principles. This o
book lights a clear path through the various issues, explaining the
f
law as it stands but also considering proposals for reform so that an
understanding of the development of the law is achieved. c
This new edition has been revised to include recent developments in the
o
law including:
• The Law Commission report and suggested bill on unfair contract
terms. n
• New case law been integrated throughout.
www.mylawchamber.co.uk/richards This text
is supported by a Mylawchamber website t
Key Features:
including:
• Clearly distinguished case summaries help you to quickly recognise r
For students: regular case and legislation
the key cases and differentiate them from surrounding commentary. updates, web links, interactive self-test a
• New colour text design and larger format to enable you to use the questions, practice assessment questions, an
online glossary and key term flashcards.
text with ease.
• Chapter summaries highlight the main points covered in each For lecturers: a testbank of multiple choice c
questions which can be used to assess
chapter, cementing your understanding. students’ progress.
CASE t
NAVIGATOR powered by

Visit www.pearsoned.co.uk/casenavigator
for unique online support that helps improve
case reading and analysis skills in contract
law.
About the Author
The lexisNexis element of case Navigator is only
Paul RichaRds is Head of the Department of Law, available to those who currently subscribe to
lexisNexis Butterworths online. The publishers are
University of Huddersfield. He has many years’ experience as r
endeavouring to make case Navigator available from
a lecturer in contract, land law and trusts, and is an examiner early summer 2007. ic
and moderator for various bodies. h paul richards
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Law of Contract
Case Navigator
Visit www.pearsoned.co.uk/casenavigatorto find unique
online support to help improve your case reading and
analysis skills. This resource can also be used as an
effective seminar preparation tool.
Please note that access to Case Navigator is free but you
must register with us for access. Full registration
instructions are provided at www.pearsoned.co.uk/casenavigator.
Case Navigator provides:
n Short introductionsto a selection of core cases in Contract Law, providing
guidance on what to look out for while reading cases.
n Direct deep linksto the core cases in Contract Law.
n Questionsto test knowledge and understanding. Answer guidance is provided
after the test has been completed.
n Summariesoutlining and contextualising the cases, pointing you towards
further reading so that you are fully prepared for seminars and discussions.
For more information about Case Navigator please contact your local Pearson
Education sales representative or visit www.pearsoned.co.uk/casenavigator.
The LexisNexis element of Case Navigator is only available to those who
currently subscribe to LexisNexis Butterworthsonline. The Publishers are
endeavouring to make Case Navigator fully available from early Summer 2007.
Visit the Law of Contract, 8theditionCompanion Website at
www.mylawchamber.co.uk/richardsto find valuable studentlearning material
including:
■ Interactive multiple choice questions to test your factual knowledge of the topics
■ Exam-style questions and answer guidance to test your ability to apply
knowledge
■ Interactive online flashcards that allow you to check definitions against the
key terms during revision
■ Links to relevant sites on the web
■ Regular updates on major legal changes affecting the book
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Eighth Edition
Law of Contract
PAUL RICHARDS
Head of Huddersfield University Law School

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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 1992
Second edition 1995
Third edition 1997
Fourth edition 1999
Fifth edition 2002
Sixth edition 2004
Seventh edition 2006
Eighth edition 2007
© Longman Group UK Limited 1992
© Pearson Professional Limited 1995
© Financial Times Professional Ltd 1997
© Pearson Education Limited 1999, 2006, 2007
The right of Paul Richards to be identified as author of this work has
been asserted by him 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,
90 Tottenham Court Road, London W1T 4LP.
ISBN 978-1-4058-4691-2

British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
10 9 8 7 6 5 4 3 2 1
10 09 08 07
Typeset in 9.5/12.5pt Stone Serif by 35
Printed and bound by Ashford Colour
The publisher’s policy is to use paper manufactured from sustainable forests
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Contents
Guided tour x
Preface xii
Table of cases xvi
Table of statutes xxxiii
Part 1 The formation of a contract
1 The evolution and definition of the modern contract 3
Evolution 3
Definition 9
2 The fact of agreement 13
Introduction 13
Offer 16
Acceptance 26
The fact of acceptance 28
The termination of offers 44
Certainty of terms 51
3 Consideration 59
Introduction 59
The definition of consideration 60
Consideration may be executed or executory but not past 61

Consideration must move from the promisee though not necessarily
to the promisor 64
Consideration must be sufficient though not necessarily adequate 65
4 Intention to create legal relations 88
Introduction 88
Social and domestic arrangements 88
Commercial agreements 90
5 Capacity 95
The scope of this chapter 95
The capacity of natural persons 95
The capacity of corporations 102
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vi CONTENTS
6 Formalities 111
Introduction 111
Contracts required to be made by deed 111
Contracts required to be in writing 112
Contracts required to be evidenced in writing 117
Part 2 The contents of the contract
7 The terms of the contract 127
Introduction 127
Express terms 127
Implied terms 136
The classification of contractual terms 158
8 Exemption clauses 165
Introduction 165
Incorporation of the exclusion clause into the contract 165
Construing exemption clauses 170
Other factors limiting the effectiveness of exemption clauses 175
The future of exemption clauses and unfair terms 209
Part 3 Factors that vitiate a contract
9 Misrepresentation 217
Introduction 217
The nature of the inducement 217
The fact of the inducement 221
The nature of the misrepresentation 224
The remedies a vailable for misrepresentation 227
Exclusion of liability for misrepresentation 236
10 Mistake 241
Introduction 241
Mistake at common law 242
Mistake in equity 264
Mistake as to the nature of the document signed 270
11 Duress, undue influence and inequality of bargaining
power 275
Introduction 275
The common law concept of duress 275
The equitable concept of undue influence 280
Inequality of bargaining power 302
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CONTENTS vii
12 Illegality 308
The classification of illegality 308
The unlawful manner of performance 309
Acts illegal by statute 310
Acts illegal at common law 311
The effects of illegality 329
Severance 333
Part 4 Discharge of contracts
13 Discharge by performance and breach 341
Performance 341
Breach 347
14 Discharge by agreement 363
Introduction 363
Bilateral discharge 363
Unilateral discharge 366
15 Discharge by frustration 368
Introduction 368
The development of the modern doctrine 369
Applications of the doctrine of frustration 371
Factors affecting the operation of the doctrine 375
The legal effects of the doctrine of frustration 377
Part 5 Remedies for breach of contract
16 The comm on law remedy of damages 387
Introduction 387
Assessment of the basis on which damages are awarded 388
Limitations on the availability of damages 405
17 Equitable remedies and limitation of actions 430
Equitable remedies 430
Limitations of actions 437
18 Quasi-contract 441
Introduction 441
Actions to recover moneys paid 442
Actions for payments made under a mistake of law 446
Claims in quantum meruit 450
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viii CONTENTS
Part 6 The rights and liabilities of third parties to the contract
19 Privity of contract 457
The general rule 457
The effect of the doctrine of privity of contract 458
Avoiding the doctrine of privity of contract 462
Exceptions to the doctrine of privity of contract 463
Reform of the doctrine of privity of contract 478
20 Agency 494
Introduction 494
The creation of the agency relationship 494
The effects of agency 502
The termination of the agency 510
The effect of European law on the agency relationship 512
21 Assignment of contractual rights 523
Introduction 523
Voluntary assignment at common law 524
Voluntary assignment in equity 525
Statutory assignment 531
Other factors affecting all types of assignments 532
Assignment of liabilities 535
Index 537

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To my darling wife, Val,
with all my love for now and forever

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