CONTRACT LAW

WHAT IS CONTRACT LAW?

 

Contract Law is a broad subject with many specific applications in different areas of law and aspects of our daily personal and professional lives. It is mainly a Common Law subject. This means that the judiciary has expressed and established its rules and principles when they make judgments in real-life cases. 

 

The main period of development of the Common Law of Contract was in the nineteenth century, which saw an increasing number of contract disputes brought before the courts as a period of considerable commercial and industrial expansion.

 

STUDYING CONTRACT LAW

 

Contract Law is one of the seven core subjects that the Law Society and the Bar Council deem essential in a qualifying law degree. Contract Law is also the foundation of any commercial activity. As a student of law, it is vital that you successfully pass this subject because you will use this knowledge every day practising as a contract law solicitor.

 

Additionally, Contract Law forms the basis of other subjects and is needed in order to study subjects such as Commercial Law, Employment Law and the Law of International Trade.  The problem that many law students encounter when studying contract law is:  knowing everything. There is so much to read and so little time to do it. If you skip some material or a case, you are none the wiser.

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A UNILATERAL CONTRACT

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Unilateral contracts arise where A promises to do something in return for an Act to be performed by B. They can be best seen, then, as ‘If you do this’ types of contract. This is a type of contract where commencing performance is the requisite acceptance.

 

Example: If, during my contract law lecture, I say, “I will pay £10,000 to the first student to swim the length of the river Thames by the end of the day,” I have just created a unilateral contract that can potentially be accepted by any one of the recipients. If an hour later, a student comes to my office drenched, claiming to have been the first to swim a length of the Thames and claiming the evidence has been put on YouTube, I am contractually bound.

 

General Principle: In unilateral contracts, the performance of a requested action amounts to the acceptance and binds the offeror to give a reward.

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Carlill v Carbolic Smoke Ball Co. [1892] 1 QB 256

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Facts: At the time of an influenza epidemic, the defendants advertised the sale of a device called a ‘smoke ball’. They posted the advert in the newspapers, which stated that they would pay £100 to anybody who ‘caught influenza, a cold, or any other kind of disease that came from catching a cold’ after they used the ‘smoke ball’ three times a day for fourteen days, in accordance with the instructions they provided with each ball.

 

Carbolic Smoke Ball Company also mentioned in the advertisement that they had put aside £1000 in a bank account to be able to pay such fees. Mrs Carlill bought a smoke ball and followed all of the instructions but caught influenza and, as such, went on to claim £100 from the company. The company responded by saying that the advert was nothing but a ‘sales puff,’ or a piece of sales talk (e.g. Red Bull gives you wings), and thus there was no offer; furthermore, they argued it would be unreasonable and impossible to contract to the entire world at large.

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Ratio: The Court of Appeal held that the offer was actually a unilateral one, one with the intention to create relations with anyone who met the conditions of the offer to claim £100. The court also rationalised that because it was a unilateral offer, there was no need for communication of acceptance.  The court finally addressed the point that an offer to the world at large could be made if it was capable of acceptance, so long as the conditions stated were fulfilled. Mrs Carlill was, therefore, able to claim £100.

 

Application: Carbolic Smoke Ball Co. claimed that its advertisement was too vague to be treated as a definite offer.  However, if an advertisement is precise and detailed to the point where completing the stated conditions would fulfil a contract, then it is an enforceable unilateral contract and not merely a “sales puff.” 

 

CONTRACT LAW TUTOR

 

Our Contact Law Tutors have been called to the Bar and are experienced lecturers. We have pooled together and written a book for our students, which is a fully-fledged source of basic information which tries to give law students a comprehensive understanding of this module. Our contract law book is available to buy on Amazon now.

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FAQ's

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What constitutes a contract's seven fundamental components?

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• Contract Basics.

• Contract Classification.

• Offer.

• Acceptance.

• Meeting of the Minds.

• Consideration.

• Capacity.

• Legality.

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What is the difference between an agreement and a contract?

An agreement is a legally binding understanding between two or more parties. A contract is a written agreement that has precise terms and provisions that have legal force. To create a contract, one party must put in an offer, and another party must accept it. There must also be considered, which is something of value exchanged by both parties for the performance of the contract. When these elements are present, a contract is formed and can be legally enforced.

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