AN INTRODUCTION TO THE LAW OF CONTRACT

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1 AN INTRODUCTION TO THE LAW OF CONTRACT P. S. ATIYAH Formerly Professor of English Law in the University of Oxford FIFTH EDITION CLARENDON PRESS OXFORD 1995

2 Contents Table of Cases i. The Development of the Modern Law of Contract i 1. Contracts and the Law of Obligations I 2. Contracts and Economic Exchange 3 3. Classical Contract Law 7 4. The Decline of Freedom of Contract Developments since 1980: Return to Classical Principles? The Purposes of Contract Law 34 a. Definition and Classification of Contracts Definition Classification Contracts Made by the Parties: Offer and Acceptance The Making of a Contract The Offer The Acceptance Termination of the Offer The Effect of Mistake in the Making of Offer or Acceptance Contracts Made by the Courts A Second Function of Contract Law Implied Warranty of Authority The Request Principle Informal Property Transactions Collateral Contracts The Relationship of Negotiating Parties Tort Damages and Other Remedies as a Contract Price Certainty in 6. Consideration The Nature of the Doctrine of Consideration Executed, Executory, and Past Consideration The Value of Consideration Benefit as a Consideration The Protection of Detrimental Reliance Consideration for the Variation and Discharge of Contracts The Future of the Doctrine of Consideration 149 xi

3 viii CONTENTS 7. The Intention to Create Legal Relations Express Agreements not to be Bound Social and Family Arrangements Collective Bargaining Agreements Agreements'Subject to Contract' Formalities The Different Kinds of Contractual Duties Conditions and Warranties Intermediate Terms Fundamental Terms Contractual Duties Fixed by the Parties Terms and Representations Written Contracts Oral Contracts The Interpretation of Express Terms Contractual Duties Not Fixed by the Parties The Nature of Implied Terms Implied Terms in Standardized Contracts Reasonableness and Necessity Widely Applicable Implied Terms Implied Terms in Special Cases No General Implied Duty of Good Faith a. The Construction of the Contract Strict Duties in the Law of Contract Common Mistake and Pre-existing Facts Frustration and Subsequent Occurrences The Duty to Disclose Material Facts Non-contractual Duties The Disclosure of Material Facts Misrepresentation The Nature of Misrepresentation Fraudulent and Innocent Misrepresentation Negligent Misrepresentation Exclusion of Liability for Misrepresentation Remedies for Misrepresentation Misrepresentation in the Performance of Contracts Duress and Undue Influence Duress Undue Influence Unfair Contracts Fairness and Contract Law 282

4 CONTENTS j x 2. Contract Law and Substantive Justice The Striking Down of Express Contract Terms at Common Law The Unfair Contract Terms Act The EC Directive on Unfair Contract Terms Void Contracts Agreements to Oust the Jurisdiction of the Court Contracts Prejudicial to Family Relations Contracts in Restraint of Personal Liberty Contracts in Restraint of Trade Wagering Contracts Contracting Out of Statutes The Consequence of a Void Contract Illegal Contracts Contracts to Commit a Crime Contracts Involving Sexual Immorality Other Agreements Contrary to Public Policy The Consequences of Illegality The Enforcement of Contractual Rights by Third Parties The Distinction between Contract and Property Enforcement by the Promisee Assignment Agency Insurance Contracts Trusts Commercial Cases Privity and the Law of Tort The Enforcement of Contractual Rights Against Third Parties 386 r. Novation Obligations Running with Property Other Ways of Enforcing Obligations Against Third Parties 391 a 1. Termination and Rescission of Contracts Unilateral Termination Termination and Rescission The Effects of Termination The Effects of Rescission Limits on the Rights of Termination and Rescission 412 a a. Remedies for Breach of Contract The Purpose of Contractual Remedies Self-Help Specific Performance and Injunction The Action for An Agreed Sum 431

5 CONTENTS 5. The Action for Damages Expectation, Reliance and Restitutionary Claims Consequential Losses and Remoteness of Damage 464 Index 471

CONTRACT LAW IN THE SOUTH PACIFIC

CONTRACT LAW IN THE SOUTH PACIFIC Jennifer Corrin Care Senior Lecturer TC Beirne School of Law University of Queensland Cavendish Publishing Limited London Sydney CONTENTS Preface Table of Cases Table