The Modern Law of Contract

579 Pages·2013·4.216 MB·English

by  Richard Stone

The Modern Law
of Contract
Tenth Edition
The Modern Law of Contract is a clear and logical introductory textbook, written by a
leading author and lecturer with over thirty years’ teaching and examining experience.
Offering a carefully tailored overview of all key topics for LLB and GDL courses, this
tenth edition has been thoroughly updated and presents learning features that will help
students to:
■ Understand and remember core topics: boxed chapter summaries offer a useful
checklist for students, while illustrative diagrams help to clarify diffi cult concepts
■ Identify important cases and assess their relevance : ‘Key Case’ features highlight
and contextualise the most signifi cant cases
■ Refl ect on how contract law operates in context: highlighted ‘For Thought’
features ask students to consider ‘what if’ scenarios, while ‘In Focus’ features offer
critical commentary on the law
■ Consolidate learning and prepare for assessment: the book’s Companion
Website presents chapter-b y-chapter Multiple-Choice Questions; a Flashcard glos-
sary; contract law skills advice; PowerPoint slides of the diagrams within the book;
and sample essay questions.
Clearly written and easy to use, T he Modern Law of Contract enables undergraduate
students of contract law to fully engage with the topic and gain a profound understanding
of this fundamental area.
Richard Stone is Professor of Law at the University of Lincoln.

THE MODERN LAW
OF CONTRACT
Tenth Edition
Richard Stone
Tenth edition published 2013
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2013 Richard Stone
The right of Richard Stone to be identifi ed as author of this work has been
asserted by him in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in
writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identifi cation and
explanation without intent to infringe.
First edition published by Cavendish 2002
Ninth edition published by Routledge 2011
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloguing in Publication Data
Stone, Richard, 1951 Mar. 7–
The modern law of contract / Richard Stone.—10th ed.
p. cm.
1. Contracts—England. 2. Contracts—Wales. I. Title.
KD1554.S758 2013
346.4202—dc23
2012038337
ISBN: 978–0–415–63094–8 (hbk)
ISBN: 978–0–415–63095–5 (pbk)
ISBN: 978–0–203–06875–5 (ebk)
Typeset in Helvetica Neue
by Refi neCatch Limited, Bungay, Suffolk
Contents
Preface xv
Guide to Using the Book xviii
Guide to the Companion Website xx
Table of Cases xxiii
Table of Legislation xlv
Table of International Instruments li
1 Introduction 1
2 Forming the Agreement 29
3 Consideration and Other Tests of Enforceability 89
4 Intention to Create Legal Relations 139
5 Privity 155
6 The Contents of the Contract 187
7 Clauses Excluding or Limiting Liability 227
8 Misrepresentation 273
9 Mistake 303
10 Duress 333
11 Undue Infl uence 349
12 Illegality and Public Policy 379
13 Frustration 409
14 Discharge by Performance or Breach 433
15 Remedies 459
Bibliography 509
Index 519

Detailed contents
Preface xv
Guide to Using the Book xviii
Guide to the Companion Website xx
Table of Cases xxiii
Table of Legislation xlv
Table of International Instruments li
1 INTRODUCTION
1.1 Overview 1
1.2 Introduction 2
1.3 Contractual theory 5
1.4 The classical law of contract 6
1.5 The subject matter of contract law 8
1.6 Discrete and relational transactions 13
1.7 Contract, tort and restitution 15
1.8 A law of contract or law of contracts? 16
1.9 Different approaches to analysing contract 19
1.10 International infl uences 22
1.11 Further reading 27
2 FORMING THE AGREEMENT
2.1 Overview 30
2.2 Introduction 30
2.3 Deeds and other formalities 31
2.4 General lack of formal requirement 32
2.5 The external signs of agreement 34
2.6 Historical background 35
2.7 Offer 35
2.8 Unilateral and bilateral contracts 44
VIII Detailed contents
2.9 Tenders 45
2.10 Auctions 46
2.11 Acceptance 49
2.12 Methods of acceptance 57
2.13 Acceptance and the termination of an offer 75
2.14 Retraction of acceptance 78
2.15 Certainty in offer and acceptance 82
2.16 Summary of key points 86
2.17 Further reading 87
3 CONSIDERATION AND OTHER TESTS OF ENFORCEABILITY
3.1 Overview 90
3.2 Introduction 90
3.3 Deeds 91
3.4 Consideration or reliance? 93
3.5 Benefi t and detriment 94
3.6 Mutual promises 95
3.7 Consideration need not be ‘adequate’ but must be ‘suffi cient’ 96
3.8 Past consideration is no consideration 100
3.9 Performance of existing duties 102
3.10 Consideration and the variation of contracts 115
3.11 The doctrine of promissory estoppel 117
3.12 Promissory estoppel and consideration 119
3.13 Promissory estoppel and the part payment of debts 125
3.14 Other types of estoppel 128
3.15 Alternative tests of enforceability 129
3.16 Summary of key points 136
3.17 Further reading 137
4 INTENTION TO CREATE LEGAL RELATIONS
4.1 Overview 139
4.2 Introduction 140
4.3 Domestic agreements 142
4.4 Commercial agreements 146
4.5 Collective agreements 150
4.6 Is a requirement of intention necessary? 152
Detailed contents IX
4.7 Summary of key points 153
4.8 Further reading 153
5 PRIVITY
5.1 Overview 156
5.2 Introduction 156
5.3 The rationale for the doctrine 157
5.4 Development of the doctrine 160
5.5 Evading the doctrine 163
5.6 The Contracts (Rights of Third Parties) Act 1999 164
5.7 Damages on behalf of another 169
5.8 The trust of a promise 173
5.9 Collateral contracts 174
5.10 The tort of negligence 175
5.11 Statutory exceptions 178
5.12 Privity and exclusion clauses 178
5.13 Imposing burdens: restrictive covenants 182
5.14 The role of the law of tort 184
5.15 Summary of key points 184
5.16 Further reading 185
6 THE CONTENTS OF THE CONTRACT
6.1 Overview 187
6.2 Introduction 188
6.3 Distinction between representations and terms 189
6.4 Remedies for pre- contractual statements 193
6.5 Express terms 198
6.6 Implied terms 209
6.7 Statutory controls 223
6.8 Summary of key points 224
6.9 Further reading 225
7 CLAUSES EXCLUDING OR LIMITING LIABILITY
7.1 Overview 227
7.2 Introduction 228
7.3 Common law rules 230