Mistake is one of the most difficult topics in the English law of contract. The principles have never been precisely settled, the decided cases are open to a number of varying interpretations. The position is complicated by the fact that there have been distinct changes in the attitude of the judges to the question of mistake during the last 150 years. This chapter examines the circumstances in which a contract will be held to be defective if one or both of the parties enter into it under some misapprehension or misunderstanding but would not have done so had they known the true position. The discussions cover categorizing mistakes, mistakes about contract terms, mistakes about the identity of the person to whom the contract is addressed, and mistakes of fact or law about the subject matter of the contract or the surrounding circumstances.
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Chapter
8. Mistake
Jack Beatson, Andrew Burrows, and John Cartwright
Chapter
6. The Contents of the Contract
M P Furmston
This chapter discusses the process of deciding what the contract is. This includes express and implied terms; the relative importance of contractual terms, the process of deciding what the contract mean; excluding and limiting terms; the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015.
Chapter
2. Objectivity in contract law
This chapter provides an overview of the concept of objectivity. In contract law, the intentions of parties are generally judged by their words and conduct and their ‘objective’ meaning. This is known as the ‘objective test’. The contents of a contract are determined objectively. The best evidence that a term has been incorporated into a contract and that a contract is binding is through the parties’ signatures, although entirely oral contracts are equally possible. Contractual communications, whether oral or written, are generally to be understood in the way that a reasonable person in the position of the recipient would have understood them.
Chapter
L’Estrange v Graucob Ltd [1934] 2 KB 394
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in L’Estrange v Graucob Ltd [1934] 2 KB 394. The document also includes supporting commentary from author Nicola Jackson.
Chapter
10. Implied Terms
This chapter discusses implied terms. Terms may be implied into contracts from three principal sources: statute, custom, and the courts. Parliament has, on a number of occasions, implied terms into contracts. The precise reason for the implication of the term depends upon the particular statute. It may be to give effect to the presumed intention of the parties; it may be to reduce uncertainty by enacting a default rule out of which the parties can contract if they do not like the term that Parliament has seen fit to imply; or it may be to protect one party to the transaction from the superior bargaining power of the other. Terms can also be implied into contracts by custom where the custom is certain, reasonable, and notorious. Customs and usages are an important source of obligations in commercial contracts. Terms implied by the courts can be divided into two groups, namely terms implied in fact and terms implied in law. A term is implied in fact when it is implied into the contract in order to give effect to what is deemed by the court to be the unexpressed intention of the parties and is implied because it is necessary to make the contract work. Terms implied in law ‘are those terms that are consistently implied into all contracts of a particular type because of the nature of the contract, rather than the supposed intentions of the parties’.
Chapter
12. Boilerplate Clauses
This chapter examines some standard clauses found in commercial contracts today (often known as ‘boilerplate clauses’). The focus is on commercial contracts and terms that will, in all probability, have been drafted by lawyers. After first setting out some general considerations that relate to the structure of modern contracts, the discussion moves on to examine some standard form clauses to be found in such contracts. These include general clauses, retention of title clauses, price escalation clauses, clauses making provision for the payment of interest, force majeure clauses, choice of law clauses, arbitration clauses, jurisdiction clauses, hardship clauses, entire agreement clauses, no oral modification clauses, termination clauses, assignment, and, albeit briefly, exclusion and limitation clauses.
Chapter
4. Contract III: contractual terms and statutory protection
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses contractual terms and statutory protection. Parties to a contract may express terms and/or terms may be implied. The sources and effects of implied terms are essential to the rights of the parties and obligations imposed on them. Terms can be implied through the courts, through customs, and from statute. Terms are identified as conditions, warranties, or innominate and this distinction is relevant when identifying remedies for breach. Statutes regulate the rights and obligations applicable to consumers and traders. These include the Sale of Goods Act 1979, the Unfair Contract Terms Act 1977, and the substantial changes in contracts between consumers and traders introduced through the Consumer Rights Act 2015.
Chapter
6. The Implied Terms of the Personal Employment Contract
This chapter first discusses the role played by implied terms of the employment contract. It then turns to the implied terms which impose obligations on the employer. These include the duty to provide work, pay wages, exercise reasonable care for the physical and psychiatric well-being of the employee; the implied term of mutual trust and confidence; and the discretionary benefit implied term and anti-avoidance implied term. The final section covers the implied terms imposing duties on employees. These include the duty to work and obey instructions and orders; the duty to adapt, exercise care, and co-operate; the duty of mutual trust and confidence; and the duty of loyalty, fidelity, and confidence.
Chapter
10. Implied Terms
This chapter discusses implied terms. Terms may be implied into contracts from three principal sources: statute, custom, and the courts. Parliament has, on a number of occasions, implied terms into contracts. The precise reason for the implication of the term depends upon the particular statute. It may be to give effect to the presumed intention of the parties; it may be to reduce uncertainty by enacting a default rule out of which the parties can contract if they do not like the term that Parliament has seen fit to imply; or it may be to protect one party to the transaction from the superior bargaining power of the other. Terms can also be implied into contracts by custom where the custom is certain, reasonable, and notorious. Customs and usages are an important source of obligations in commercial contracts. Terms implied by the courts can be divided into two groups, namely terms implied in fact and terms implied in law. A term is implied in fact when it is implied into the contract in order to give effect to what is deemed by the court to be the unexpressed intention of the parties and is implied because it is necessary to make the contract work. Terms implied in law ‘are those terms that are consistently implied into all contracts of a particular type because of the nature of the contract, rather than the supposed intentions of the parties’.
Chapter
12. Boilerplate Clauses
This chapter examines some standard clauses found in commercial contracts today (often known as ‘boilerplate clauses’). The focus is on commercial contracts and terms that will, in all probability, have been drafted by lawyers. After first setting out some general considerations that relate to the structure of modern contracts, the discussion moves on to examine some standard form clauses to be found in such contracts. These include general clauses, retention of title clauses, price escalation clauses, clauses making provision for the payment of interest, force majeure clauses, choice of law clauses, arbitration clauses, jurisdiction clauses, hardship clauses, entire agreement clauses, no oral modification clauses, termination clauses, assignment, and, albeit briefly, exclusion and limitation clauses.
Chapter
8. The Terms of the Contract
A contract is composed of terms, the number of which depends upon the importance of the transaction. The terms of the contract are of great significance to the parties because they define their rights and liabilities. This chapter examines two preliminary issues, the first of which relates to the identification of the terms of the contract. How do the courts decide what is and what is not a term of the contract? The second issue concerns the entitlement of the parties to lead evidence of terms not to be found in their written contract. Where the parties take the time, trouble, and expense of reducing their agreement to writing, are they still entitled to adduce evidence of terms other than those found in the written document, or is the written document the sole source of the terms of their contract?
Chapter
9. Incorporation of Terms
This chapter discusses the incorporation of terms into a contract. Three principal options are available to ensure the incorporation of terms, the first of which is to make sure that the other party to the contract signs the document that contains all the relevant terms. A party is generally bound by terms he has signed, whether or not he has read them. The second option is to take reasonable steps to bring the terms to the notice of the other party. In order to be effective the notice must have been given at or before the time of contracting, in a document that was intended to have contractual effect, and reasonable steps must have been taken to bring the terms to the attention of the other party. The third option is incorporation by course of dealing or by custom. In order to constitute a ‘course of dealing’ there must have been a series of transactions between the parties that was both ‘consistent’ and ‘regular’.
Chapter
15. Exclusion clauses and unfair terms
This chapter analyses the law on exclusion clauses and unfair terms. Exclusion clauses are terms which exclude or limit a defendant’s liability. The enactment of the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015 has reduced the importance of common law techniques for avoiding the worst effects of exclusion clauses. Both statutes enable the courts to control the substance of the contract. The Unfair Contract Terms Act 1977 only applies to non-consumer contracts. It empowers a court not to enforce exclusion clauses where they are unreasonable. Unlike the Unfair Contract Terms Act 1977, the Consumer Rights Act 2015 is not limited to exclusion clauses. A term will be unfair if, ‘contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer’.
Chapter
25. Conditions, warranties, and innominate terms
If a party fails to perform a promise in a contract, it is in breach and liable to pay damages. But some breaches of contract not only entitle the injured party to claim damages, but also to put an end to the contract. The nature of the term becomes important when considering the right to terminate. This chapter discusses the meaning and scope of conditions, warranties, and innominate terms. A party may terminate a contract for breach of condition, but never for breach of warranty. Terms that are neither conditions nor warranties are called ‘innominate’ terms. It may be possible to terminate a contract for breach of an innominate term if the breach is sufficiently serious. Breaches which justify termination are often called ‘repudiatory breaches’. The chapter also considers express termination clauses and another difficult sense in which the term ‘condition’ is used, namely to denote an ‘entire obligation’.
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11. Identifying the terms of a contract
This chapter discusses the terms of a contract. It first examines the distinction between a ‘term’ and a ‘representation’, before considering how those terms can be incorporated into a contract. It then discusses the nature of the contract being examined—even if the relevant term is not to be found in the ‘main’ contract, it may be found in a ‘collateral’, or ancillary, contract. Finally, the chapter addresses the ‘parol evidence rule’, which essentially states that where there is a written contract, extrinsic evidence cannot be used to establish other terms. This rule is riddled with exceptions and often dismissed, although it is suggested that it should not be entirely discarded.
Chapter
13. Implication
This chapter examines whether a term should be imported into the contract, although it was never expressed in words; should the term be implied? A term can be implied into a particular contract because it is necessary to give effect to the parties’ intentions. This is known as ‘implication in fact’. Whether a term should be implied ‘in fact’ has traditionally depended upon whether the term was so obvious to both parties that it went without saying, or whether the term was necessary to give ‘business efficacy’ to the contract. A term might be implied ‘in law’ into all contracts of a particular type. Such terms might be implied as a result of statute or judicial decisions. Where a judge decides that a term should be implied ‘in law’, courts can take into account policy reasons when deciding whether an implied term is necessary for the type of contract at issue.
Chapter
Goodlife Foods Ltd v Hall Fire Protection Ltd [2018] EWCA Civ 1371
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Goodlife Foods Ltd v Hall Fire Protection Ltd [2018] EWCA Civ 1371. The document also includes supporting commentary from author Nicola Jackson.
Chapter
Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433. The document also includes supporting commentary from author Nicola Jackson.
Chapter
Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, Court of Appeal. The document also includes supporting commentary from author Nicola Jackson.
Chapter
Lombard North Central plc v Butterworth [1987] QB 527
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Lombard North Central plc v Butterworth [1987] QB 527. The document also includes supporting commentary from author Nicola Jackson.
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