16. Illegality

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. A contract may be deemed illegal or void on grounds of public policy. This chapter examines the illegality of contracts under English law, contracts prohibited by statute (express prohibition), and contracts that are illegal in their performance. It considers contracts that are void on grounds of public policy, focusing on contracts in restraint of trade, covenants between employer and employee, exclusive dealing agreements, exclusive service agreements, and severance of the objectionable parts of covenants. The chapter also discusses the recovery of money or property transferred under an illegal contract, along with the UK Law Commission’s proposed reform of the law governing illegal contracts and the supreme court decision of Patel v Mirza over controversy concerning the nature of illegality, the basis for intervention in illegal contracts and the ability to recover under an illegal contract.

14. Misrepresentation

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. A contract may include a statement that is a mere puff, a representation, or a contractual term. In the case of a representation, the maker asserts the truth of certain facts and thus induces the contract. In case of an actionable misrepresentation (an unambiguous false statement of fact which induces the other party to enter into the contract), the contract may be rendered voidable, that is, liable to be set aside or rescinded. In some instances, the injured party may claim for damages designed to restore him to his original position. This chapter examines the identification of actionable misrepresentation, duties of disclosure, types of misrepresentations, rescission as a remedy, damages for misrepresentation, including the damages available in section 2 of the Misrepresentation Act 1967, and the effect of contributory negligence in any damages award. Finally, the chapter examines exclusion of liability for non-fraudulent misrepresentation and the effect of ‘non-reliance’ clauses in contracts. In the consumer context, it also notes the criminal offences in certain instances of misrepresentation under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the extension to include civil remedies for misleading actions.

9. Damages for breach of contract

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. Contractual damages aim to compensate the injured party for the loss suffered due to breach of contract. Damages for breach are compensatory and not punitive so that it is possible to recover only for the actual loss suffered by the injured party. This chapter considers the different measures to achieve compensation for loss suffered as a result of the breach and the limitations on the ability to be fully compensated in a breach of contract claim. It also discusses agreed damages provisions and their enforceability.

8. Breach of contract

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. The performance obligations of the parties to a contract are determined by contractual terms. A breach of contract arises when a party fails to fully comply with a performance obligation, without lawful excuse. If a contractual obligation is strict, failure to comply constitutes a breach of contract regardless of fault. Subject to an enforceable exemption clause, the injured party is entitled to damages to compensate for the loss suffered as a result of the breach. This chapter focuses on breach of contract and its legal consequences. It discusses the election on repudiatory breach, termination or affirmation of a contract, the classification of terms: conditions, warranties and innominate or intermediate terms, the ‘entire obligation rule’, and anticipatory breach.

7. Exemption clauses and unfair contract terms

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter deals with exemption clauses and unfair contract terms. An exemption clause is a term in a contract or notice that can be either an exclusion clause (excluding liability or remedies) or a limitation clause (limiting liability to a specified sum). The chapter primarily focuses on the requirements that must be satisfied before an exemption clause can be relied upon, the question of construction and the natural and ordinary meaning of the clause, contra proferentem, liability for negligence, limitation clauses, inconsistent terms and fundamental breach. It then examines the legislative regulation of exemption clauses, emphasizing the growing distinction between commercial and consumer contracts in this context. It considers in some depth the enforceability of exemption clauses in a B2B context in accordance with the Unfair Contract Terms Act 1977 and its interpretation in case law. In the B2C context, it discusses control of unfair terms in accordance with Part 2 of the Consumer Rights Act 2015 and the case law interpreting the previous legislative regulation of unfair terms.

4. Enforceability of promises: consideration and promissory estoppel

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. In order to be enforceable, a promise must either be supported by consideration or be expressed in the form of a deed. This stems from the assumption in English contract law that only bargains should be enforced. This chapter examines the enforceability of promises, focusing on consideration and promissory estoppel. The case law has addressed what can constitute consideration and whether a promise can be enforced in the absence of consideration. The chapter focuses particularly on the enforceability of alteration promises, discusses part-payment of a debt, when and how the doctrine of promissory estoppel will operate, and how far the doctrine can be extended.

1. Guidance on reading cases

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter offers tips for students on how to read cases relating to contract law. In reading a case, it is important to understand how it relates to the legal principles taught in lectures. The chapter also discusses the basics of reading a case and how to read a case in practice, using the case Carlill v Carbolic Smoke Ball Co. so that the student will learn to appreciate contract case law.

15. Duress, undue influence, and unconscionable bargains

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines further vitiating factors which relate to the way in which the contract was entered into and render it voidable. It discusses the doctrines of duress and undue influence and whether contracts are affected by a general doctrine of unconscionability relating to the manner of formation and content relative to the nature and position of the contracting parties. The doctrine of economic duress allows for any contract to be set aside where unlawful threats to financial position were made in order to secure agreement. This doctrine is still evolving but represents a mechanism to prevent the enforceability of promises not freely given. Under the doctrine of undue influence, a contract may be set aside if one party has put unfair and improper pressure on the other in the negotiations leading up to the contract. The courts of equity have developed undue influence as one of the grounds of relief to prevent abuse of the influence of one person over another, particularly where the influence results from the nature of the relationship between the parties. The chapter examines types of undue influence, actual undue influence, presumed (or evidential) undue influence, undue influence exercised by a third party, the legal effect of undue influence, and the relationship between undue influence and unconscionability.

11. Privity of contract and third party rights

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines privity of contract, its relationship with consideration, and the ability of third parties to enforce contractual provisions for their benefit. The doctrine of privity of contract provides that the benefits of a contract can be enjoyed only by the parties to that contract and only parties can suffer the burdens of the contract. At common law, third party beneficiaries could not enforce a contractual provision in their favour so various devices were employed seeking to avoid privity. Statute now allows for direct third party enforcement but in limited circumstances. This chapter examines the background to privity and the attempted statutory reform in the Contracts (Rights of Third Parties) Act 1999 as it has been interpreted in the case law. The chapter also discusses the common law means of avoiding privity as illustrated by the case law, e.g. agency, collateral contracts, and trusts of contractual obligations. Finally it assesses the remedies available to the contracting party to recover on behalf of the third party beneficiary of the promise, including the narrow and broad grounds in Linden Gardens Trust. It concludes by briefly considering privity and burdens—and the exceptional situations where a burden can be imposed on a person who is not a party to the contract.

10. Remedies providing for specific relief and restitutionary remedies

The Casebook series provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter deals with remedies providing for specific relief and so-called ‘restitutionary’ remedies. It first considers debt claims (agreed sums), before turning to specific performance and injunctions. It concludes by discussing restitution—recovery where there has been a total failure of consideration, and recovery on a quantum meruit (as where a contract fails to materialize)—following the Supreme Court decision of Morris-Garner and another v One Step (Support Ltd) and its impact on ‘Wrotham Park damages and the availability and nature of the account of profits in Attorney General v Blake.