18. Duress

A contract can be set aside on the ground that it has been entered into under duress. This chapter presents cases illustrating the different forms of duress, namely duress of the person, duress of goods, and economic duress. The case-law establishes that there are two principal elements to a duress claim: (i) lack of consent/coercion of the will and (ii) the illegitimacy of the pressure exerted. The chapter examines the idea of ‘illegitimacy’, in particular whether a threat to breach a contract is always illegitimate and the scope of ‘lawful act’ duress.

17. Misrepresentation

A misrepresentation induces a party to enter into a contract but typically is not part of the contract itself. The chapter examines the different types of misrepresentation (fraudulent, negligent, or innocent) and the remedies that the law provides in respect of a misrepresentation. The chapter focuses on the liability for misrepresentation. Section 2 begins by examining the definition of a misrepresentation. Section 3 considers the extent to which English law recognizes the existence of a duty of disclosure. Section 4 discusses the concept of rescission while Section 5 explores how misrepresentation gives rise to a claim for damages, with a particular focus on section 2 of the Misrepresentation Act 1967. Section 6 examines the possibility of excluding liability for misrepresentation.

14. Unfair Terms in Consumer Contracts

This chapter focuses on Part 2 of the Consumer Rights Act 2015. The Act gives to the courts much broader powers to regulate terms in contracts which have been concluded between traders and consumers. Section 2 examines the individual sections of Part 2 of the Act and the leading cases decided under the Regulations which preceded the Act. Particular attention is given to key concepts such as ‘significant imbalance’, ‘good faith’, the exclusion of certain terms from assessment for fairness, the indicative and non-exhaustive list of terms that may be regarded as unfair, and the role of regulators in the enforcement of the legislation. Section 3 draws on work done by Professor Susan Bright in relation to the role of the Unfair Contract Terms Unit in the early days of the enforcement of the legislation.

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. The discussions cover general clauses, retention of title clauses, price escalation clauses, interest, force majeure clauses, choice of law clauses, arbitration clauses, jurisdiction clauses, hardship clauses, entire agreement clauses, termination clauses, assignment, and exclusion and limitation clauses.

11. The Interpretation of Contracts

This chapter focuses on the principles applied by the courts when interpreting contracts, as set out by the House of Lords in Investors Compensation Scheme Ltd v. West Bromwich Building Society and the Supreme Court in Arnold v. Britton and Wood v. Capita Insurance Services Ltd. The chapter discusses the scope of these principles (in particular, the ‘factual matrix’, the exclusion of pre-contractual negotiations, the meaning of words, ‘corrective interpretation’, and the balance to be struck between the natural and ordinary meaning of the words and giving to the words a commercial sensible construction.

6. Formalities

Requirements of form (such as writing) are not as important today as they were in the past. As a general rule, contracts can be made in any form and can be proved by any means, although there remain exceptional cases where the law does insist upon requirements of form. This chapter, which considers the reasons for continued reliance upon requirements of form, along with the criticisms levelled against such requirements, begins by explaining why legal systems impose formal requirements upon contracting parties. It then outlines the formal requirements in English contract law, followed by a discussion of the future of formal requirements, noting the distinction between cases where the contract must be made in writing and cases in which contracts must be evidenced in writing.

5. Consideration and Promissory Estoppel

The doctrine of consideration is one feature of English contract law that readily distinguishes it from the law of contract in civilian jurisdictions. Its essence is that a promisee cannot enforce a promise unless he has given or promised to give something in exchange for the promise, or unless the promisor has obtained (or been promised) something in return. In other words, there must have been a bargain between the parties. This chapter analyses the current scope of the doctrine of consideration, particularly the rule that consideration must be sufficient but need not be adequate; the pre-existing duty rule and the question whether a promise to pay, or part payment of a debt, is good consideration for the discharge of the entire deb; and the rule that past consideration is not good consideration. It also examines the role of promissory estoppel in contract cases. An estoppel gives (at least limited) effect to a promise that would otherwise be unenforceable, thus the effect of an estoppel may be to supplement, or even supplant, the doctrine of consideration. The chapter concludes with a brief discussion of the future of the doctrine of consideration and, in particular, draws on the critique of consideration developed by Professor Atiyah.

1. Introduction

This introductory chapter begins by setting out the book’s three principal aims: to provide an exposition of the rules that make up the law of contract, to explore the law of contract in its transactional context, and to explore English contract law from a transnational and comparative perspective. The discussions then turn to the scope of the law of contracts; the growth in the use of standard form contracts and the increasing complexity of the form and the content of modern contracts; transnational contract law; and conflicting policies that underpin the law of contract.

20. Unconscionability and Inequality of Bargaining Power

This chapter considers a group of cases in which the courts have been asked to grant relief on the basis that the contract concluded between the parties was, in some way, unfair, outlining examples drawn both from the common law (including equity) and from statutes. The rise and fall of a doctrine of inequality of bargaining power is also noted. It then considers the arguments in favour of drawing these disparate cases together into one general doctrine, and concludes by drawing on some academic reflections on the case-law and the role of fairness in the law of contract more generally.

16. Mistake

This chapter examines the effects of a mistake on the validity of a contract. A mistake may prevent parties from reaching agreement. First, a court may decide that no contract has been concluded where one party knows that the other is labouring under a mistake in relation to the terms of the agreement and fails to inform that other party of the mistake. Secondly, it may conclude that the terms of the offer and acceptance suffer from a latent ambiguity such that the parties cannot be said to have reached agreement. The third case in which a mistake may prevent the formation of a contract is where there has been a mistake as to the identity of the party who is said to be a party to the contract. The discussion then turns to the leading cases on common mistake, mistake in equity, and rectification. The chapter concludes by considering the non est factum defence, which can be invoked by someone who, through no fault of his own, has no understanding of the document that he has signed.