This chapter discusses how the manner in which a contract is concluded can potentially affect its validity. Before discussing the terms and details of a contract, it is important to note that a contract may fail due to one or both parties not possessing the capacity to establish a contract. Some of the common reasons includes a mistake by one or both parties, a provision that has been misrepresented in the negotiations, or the use of undue influence or placing the other party under duress in the process of concluding the contract. Some of the reasons listed in this chapter may be common, but the emphasis here is to identify where problems may occur that could prevent the successful operation of the contract despite fulfilling the essential features discussed in the previous chapters.
Chapter
7. Factors Affecting The Validity of a Contract
Chapter
6. The formation of the contract
This chapter examines the legal requirements relating to the formation of a contract. It discusses the five essential elements of a contract, namely offer, acceptance (offer and acceptance are collectively referred to as ‘agreement’), certainty, consideration, and the intention to create legal relations. It analyses these individual requirements in detail and considers the courts’ approach in determining whether an enforceable contract is present or not. This chapter also explains the principles of different types of contracts, namely the distinction between bilateral and unilateral contracts, and how the normal rules of contractual formation are modified in the cases involving unilateral contracts.
Chapter
10. Vitiating factors
This chapter focuses on the vitiating factors in a contract, namely those that can render a contract void ab initio or voidable (the distinction between void and voidable contracts is discussed). These include misrepresentation, mistake, duress, undue influence, unconscionable bargains, and illegality and public policy. Certain vitiating factors like mistake will render a contract void ab initio whilst others such as misrepresentation will render the contract merely voidable. It also shows that contracts are not beyond challenge once formed and describes several cases where the courts have held that a contract should not be enforceable despite the validity of the contract’s formation.
Chapter
9. Unfair terms
This chapter examines unfair terms and exclusion clauses in a contract. It explains that exclusion and limitation clauses can be used by the parties to exclude or limit their liability and that they are regulated by statute and common law. It highlights the fact that an exclusion clause can only be effective if it is incorporated into a contract and if it was brought to the other party’s attention prior to the contract being formed. This chapter also discusses the relevant provisions of the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015, and ongoing efforts to clarify the law in this area.
