At common law, lapse of time does not affect contractual rights. But it is the policy of the law to discourage stale claims because, after a long period, a defendant may not have the evidence to rebut such claims and should be in a position to know that after a given time an incident which might have led to a claim is finally closed. Accordingly, in the Limitation Act 1980, the Legislature has laid down certain periods of limitation after the expiry of which no action can be maintained. Equity has developed a doctrine of laches, under which a claimant who has not shown reasonable diligence in prosecuting the claim may be barred from equitable relief.
Chapter
20. Limitation of Actions
Jack Beatson, Andrew Burrows, and John Cartwright
Chapter
21. Third Parties
Jack Beatson, Andrew Burrows, and John Cartwright
This Chapter deals with the scope of a valid contract when formed, and the question: to whom does the obligation extend? This question is considered under two separate headings: (1) the acquisition of rights by a third party, and (2) the imposition of liabilities upon a third party. At common law the general rule is that no one but the parties to a contract can be entitled under it, or bound by it. This principle is known as that of privity of contract.
Chapter
6. Exemption Clauses and Unfair Terms
Jack Beatson, Andrew Burrows, and John Cartwright
This chapter discusses the common law and statutory rules governing exemption clauses, and the control of unfair terms. Written contracts frequently contain clauses excluding or limiting liability. This is particularly so in the case of ‘standard form’ documents drawn up by one of the parties or a trade association to which one of the parties belong. At common law there are special rules on the incorporation of exemption clauses, special rules of construction applicable to them, and a few miscellaneous other common law rules designed to control them. The chapter first considers those common law rules before going on to the legislative control of exemption clauses and unfair terms. The focus of the discussion of statutory control is the Unfair Contract Terms Act 1977 for non-consumer contracts, and the Consumer Rights Act 2015 for consumer contracts.
Book
Cheshire, Fifoot & Furmston’s Law of Contract is a classic text on contract law. The first edition was published over seventy years ago. The book combines an account of the principles of the law of contract with analysis and insights, and the narrative brings understanding of complex contractual issues to a wider readership. It starts by providing a historic introduction, and goes on to look at issues such as modern contract law, agreement, consideration, and legal relations. The book details the contents of the contract and looks at unenforceable contracts, mistake, misrepresentation, duress, and undue influence. Chapters then examine contracts rendered void under statute, contracts illegal by statute or at common law, and contracts void at common law due to public policy. The text moves on to look at privity, rights and liabilities, performance and breach, and discharge under the doctrine of frustration. Finally, the book looks at remedies for breach of contract.
Chapter
10. Third parties
This chapter considers two principal questions: firstly, may a person who is not a party to a contract acquire rights under it? Secondly, can a contract impose duties on a person who is not a party to it? With some exceptions, the common law answered ‘No’ to both. A contract between A and B cannot be enforced by a third party, C, even if the contract is for the benefit of C. Nor can a contract between A and B impose burdens on C. Following the Contracts (Rights of Third Parties) Act 1999 there is now a statutory exception to the principle that C acquires no rights under a contract between A and B. Under this Act, a third party might be able to enforce a term of the contract if the contract expressly provides that they may, or if the relevant term purports to confer a benefit on them.
Chapter
7. Exemption Clauses and Unfair Terms
This chapter assesses exemption clauses and unfair terms. Exemption clauses are terms that either exclude or limit the liability of a party. The law relating to the use of such clauses is a mixture of rules found in both the common law and legislation; the common law rules apply to all contracts. In addition, the Unfair Contract Terms Act 1977 applies to the use of exemption clauses in contracts between two businesses. For consumers, the Consumer Rights Act 2015 provides wider protection from unfair terms including exemption clauses. The practical context of exemption clauses is simple. One party will be in breach and so the other will seek compensation for the loss caused by the breach. The party in breach will then defend the action by relying on an exemption clause. The dispute is then about whether or not the clause can be relied upon. The circumstances in which terms might be assessed for being ‘unfair’ can be wider than this. Typically, a business will take action against a consumer following the consumer’s failure to perform an obligation, which will then prompt the consumer to challenge the obligation as based on an unfair term.
Chapter
12. Third Party Rights (the Doctrine of Privity)
This chapter highlights the doctrine of privity of contract; that means it is about the rights and obligations of third parties. The starting point is the basic common law rule of privity. At common law, third parties have no general right to enforce contracts made by others. Likewise, contracts made by others cannot impose obligations on third parties. This is a fairly straightforward principle and is based on sound reasons, but in practice privity has become a complex area. The existence of the rule resulted in a range of clever devices being developed to get around it, all of which are of commercial importance. And the rule against parties enforcing contracts made by others in particular was also severely criticized over the years for various reasons. The basis for such criticism resulted in some partial exceptions being developed in the case law, and ultimately in a statute—namely the Contracts (Rights of Third Parties) Act 1999. This complicates matters further because the Act only applies in certain circumstances and its application can be excluded by the terms of the contract. As such, there will be circumstances in which the common law exceptions and devices remain relevant, and they must therefore be studied alongside it.
Chapter
14. Frustration
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines the doctrine of frustration, which can only be invoked where the parties have not allocated the risk of the relevant event in their bargain, such as by means of a force majeure clause. It explains that issues of frustration arise where circumstances change radically after the contract has been entered into, which show that an assumption held by both parties at the time of contracting no longer applies. It analyses the effects of frustration at common law and discusses the current test for frustration, as evidenced in emerging case law from the Covid-19 pandemic. This chapter also considers the provisions of the Law Reform (Frustrated Contracts) Act 1943.
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
14. Frustration
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines the doctrine of frustration, which can only be invoked where the parties have not allocated the risk of the relevant event in their bargain, such as by means of a force majeure clause. It explains that issues of frustration arise where circumstances change radically after the contract has been entered into, which show that an assumption held by both parties at the time of contracting no longer applies. It analyses the effects of frustration at common law and discusses the current test for frustration, as evidenced in emerging case law from the Covid-19 pandemic. This chapter also considers the provisions of the Law Reform (Frustrated Contracts) Act 1943.
Chapter
13. Privity of Contract
The Concentrate Questions and Answers series offers the best preparation for tackling exam questions. Each book includes typical questions, answer plans and suggested answers, author commentary, and other features. This chapter explores the privity of contract. Traditionally the doctrine of privity of contract regards contract as based upon agreement and consequently only the parties to that agreement can enforce it. This chapter discusses common law limitations to the doctrine of privity; common law attempts to evade privity; and statutory developments. It covers the Contracts (Rights of Third Parties) Act 1999, including the freedom given to the contracting parties to exclude the provisions of the Act, or to set out procedures for post-contractual variation of arrangements that avoid the need to obtain the third party’s consent.
Chapter
5. Exemption Clauses and Unfair Terms
The Concentrate Questions and Answers series offers the best preparation for tackling exam questions. Each book includes typical questions, answer plans and suggested answers, author commentary, and other features. This chapter focuses on the regulation of exclusion/exemption clauses and other potentially unfair terms. It discusses both common law (such as approaches to incorporation and interpretation) and statutory regulation (such as the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015). It also explores two key debates: the nature of an exemption clause, and the tension between freedom of contract and judicial and statutory intervention in the context of exemption clauses.
Chapter
13. Misrepresentation
This chapter explains the law relating to the requirements and remedies for misrepresentation. The rules that the chapter covers developed originally in the context of all types of contracts. However, more recent legislation has introduced some specific protection for consumers. Consequently, the common law rules and older legislation that the chapter covers are now more applicable to non-consumer contracts, i.e. contracts between businesses and those between private parties. The chapter starts by addressing the kind of false statements that can result in a remedy. It then addresses the common law and legislative remedies that could be available to the innocent party. Finally, the chapter turns to the impact of the more recent consumer legislation before finally examining the extent to which an exemption clause could cover liability for misrepresentation.
Chapter
13. Common mistake and rectification
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines the situation where both parties to a contract share a common mistake. It analyses several court cases indicating that certain sorts of mistake can render contracts void at the level of common law. It discusses the orthodox approach which asserts that there is a separate legal doctrine whereby certain sorts of common mistakes inevitably render a contract void; it also considers an alternative way of conceptualising common mistake cases, the ‘construction approach’, which argues that the effect of common mistake is ascertained by construing and interpreting the contract. This chapter also considers the scope of the equitable remedy of rectification for common and unilateral mistake, which gives the court the jurisdiction, in exceptional cases, to correct transcription mistakes in the parties’ written contractual document.
Chapter
13. Common mistake and rectification
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines the situation where both parties to a contract share a common mistake. It analyses several court cases indicating that certain sorts of mistake can render contracts void at the level of common law. It discusses the orthodox approach which asserts that there is a separate legal doctrine whereby certain sorts of common mistakes inevitably render a contract void; it also considers an alternative way of conceptualising common mistake cases, the construction approach, which argues that the effect of common mistake is ascertained by construing and interpreting the contract. This chapter also considers the scope of the equitable remedy of rectification for common and unilateral mistake, which gives the court the jurisdiction, in exceptional cases, to correct transcription mistakes in the parties’ written contractual document.
