Contract Law
Formation, terms, breach, and remedies in agreements enforceable by law.
Introduction
Contract law governs legally binding agreements between parties. In England & Wales, a valid contract requires offer, acceptance, consideration, intention to create legal relations, and capacity. The law draws heavily on both common law principles developed through centuries of case law and key statutes such as the Sale of Goods Act 1979 and the Consumer Rights Act 2015.
Core Principles
Offer and Acceptance — A contract requires a clear offer by one party and unqualified acceptance by another (Hyde v Wrench [1840]).
Consideration — Each party must provide something of value; past consideration is not good consideration (Re McArdle [1951]).
Intention to Create Legal Relations — Commercial agreements are presumed binding; social/domestic agreements are not (Balfour v Balfour [1919]).
Capacity — Parties must have legal capacity (age, mental capacity) to enter contracts.
Privity of Contract — Only parties to a contract can enforce it, subject to the Contracts (Rights of Third Parties) Act 1999.
Terms and Representations — Distinction between conditions, warranties, and innominate terms (Hong Kong Fir Shipping [1962]).
Vitiating Factors — Misrepresentation, duress, undue influence, and illegality can render contracts voidable or void.
Remedies for Breach — Damages (compensatory, expectation, reliance), specific performance, injunctions, and rescission.
Key Statutes
Leading Cases
Common Scenarios
Buying goods online that arrive faulty
Under the Consumer Rights Act 2015, goods must be of satisfactory quality, fit for purpose, and as described. You have a short-term right to reject within 30 days.
Verbal agreement for building work
Oral contracts are generally enforceable but harder to prove. Key terms (price, scope, timeline) should ideally be in writing. The Supply of Goods and Services Act 1982 implies terms of reasonable care and skill.
Employer changes your contract terms
Employment contracts cannot be unilaterally varied. Changes require agreement, and imposed changes may constitute breach, potentially amounting to constructive dismissal.