Contract - Wikipedia, The Free Encyclopedia
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Contract From Wikipedia, the free encyclopedia
In common law legal systems, a contract is an agreement having a lawful object entered ente red into voluntarily by two or more parties, partie s, each of whom intends to create creat e one or more legal oblig obligations ations between them. The elements of a contract are "offer" and "acceptance" by "competent persons" having legal capacity who exchange "consideration" to t o create creat e "mutuality of obligation." obligation."
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Proof of some or all a ll of these elements may be done in writing, writing, though contracts contract s may be made entirely orally or by conduct. The remedy for breach of contract can be "damages" in the form of compensation of money or specific performance enforced e nforced through an injunction. B Both oth of these remedies award the party par ty at loss the "benefit of the bargain" or expectation damages, which are greater than mere reliance damages, as in promissory promis sory estoppel. The The parties may be natural persons or juristic persons. A contract is a legally legally enforceable enforcea ble promise promise or undertaking that something will will or will not occur. The word promise can be used as a [2]
legal synonym synonym for contract, contra ct, although care is required as a s a promise may not have tthe he full standing of a contract, contrac t, as when it is an agreement without consideration. Contract law varies greatly from one jurisdiction jurisdiction to another, anothe r, inclu including ding differences differences in common law compared to civil c ivil law, law, the impact of received law, particularly from Engl England and in comm c ommon on law countries, and a nd of law codified in regional regional legislation. legislation. Regarding Regarding Australian Australian Contract Law for example, e xample, there are 40 relevant acts which impact on the interpretation of contract at the Commonwealth (Federal / national) level, and an additional 26 acts at the level of the state of NSW NSW. In addition there are ar e 6 internat ional instruments instruments or conventions which are applicable for international inter national dealing dealings, s, such as the t he United Nations Convention on [3] Contracts for the t he International Sale of Goods.
Contents 1 History 1.1 Commercial use 2 Contract Management 3 Elements 3.1 Offer and acceptance 3.2 Intention to be legally bound 3.3 Consideration 4 Formation 4.1 Affirmative Affirmative defenses de fenses 4.2 Formalities and writing 4.3 Invitation to treat 4.4 Third parties 5 Performance 5.1 Uncertainty, Uncertainty, incompleteness and severance se verance 6 Contractual terms 6.1 Classification Classification of terms 6.2 Representations versus warranties 6.3 Implied terms 6.3.1 Terms implied in fact 6.3.2 Terms implied implied in law 7 Setting Setting aside the contract contra ct 7.1 Misrepresentation 7.2 Mistake 7.3 Duress and undue influence influence
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7.4 Incapacity 7.5 Illegal Illegal contracts contrac ts 8 Remedies for breach of contract 8.1 Damages 8.2 Specific Specific performance 8.3 Procedure 9 Contract theory 10 Gallery 11 See also 11.1 By country 12 Notes 13 References 14 External Externa l links links
History Main articles: artic les: History of contract contr act law and Roman law Contract law is based on the principl principlee expressed expresse d in the Latin Lat in phrase acta sunt servanda, which servanda, which is usually usually translated "agreements must be kept" but more literally means "pacts must be kept".
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Contract law can
be classified, as is is habitual in civil civil law law systems, as part of a g genera enerall law of obligations, obligations, along with tort, unjust enrichment, and a nd restitution. The common law law of contract contra ct originated with the writ of assumpsit, assumpsit, which was originally originally a tort action a ction based on reliance. re liance.[5] Jurisdictions vary in their principles of freedom Jurisdictions free dom of contract. contract . In common law jurisdictions such as the United Kingdom and the United States, a high hig h degree of freedom is expected. e xpected. For example, in American law, it was determined in the 1901 case of of Hurley Hurley v. Eddingfield Eddingfie ld that that a physician was was permitted to deny treatment trea tment to a patient despite de spite the lack of other available medical assistance and the patient's subsequent
Bill of sale of a male slave and a building in Shuruppak Shuruppak,, Sumerian Sumerian tablet,, circa 2600 BC tablet
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death. This is in contrast to the civil law, which typically applies certain certa in overarching principles principles to disputes arising out of contract, cont ract, as in the French Civil Code. Other legal systems such as Islami I slamicc law, socialist socialist legal systems, and customary law ha have ve their the ir own variations. However, in in the case ca se of the United State Statess the principle of freedom of contract contrac t has eroded er oded over time due to udicial deference to legislation legislation affecting contracts.
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For example, the Civil C ivil Rights Rights Act of 1964 restricted r estricted [8]
private racial rac ial discrimi discrimination nation against African-Americans. African-Americans. In the early ea rly 20th century the United State Statess underwent the "Lochner " Lochner era", era ", in which which the Supreme Court of the United State Statess struck down economic regulations on the basis of freedom of contract and the Due Process Clause; these decisions were eventually overturned and the Su Supreme preme Court established a deference defere nce to legislative statutes and regulations regulations which restrict restri ct freedom of contract.
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The U.S. U.S. Constitution contains a Contract Contra ct Clause, but this has been
interpreted as only restricting the retroactive impairment of contracts. [7] Not all agreements agreements are necessarily nec essarily contractual, as the parties pa rties generally must must have an intention to be legally legally bound (or the functional equivalent equivalent under the object objective ive theory of contracts). In American English, a gentlemen's gentlem en's agreement is one which is not intended intended to t o be legally legally enforceable; enforcea ble; the equivalent concept c oncept can ca n be expressed an agreement "binding in honor only."
Commercial Comm ercial u use se
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Contracts are widely used in commercial law, and form the legal foundation for transactions across the world. Common examples include construction contracts, product purchases (with associated warranties of quality), software licenses, employment contracts, insurance policies, real estate deeds to transfer title, professional services, wholesale merchandise supply, supply, and various other uses. use s. Online contracts have become common. E-signature laws have made the electronic contract and signature as legall leg ally y valid as a paper contract. c ontract. It has been estimated estimated that roughly roughly one hundred and ten electronic contracts are signed every second.[citation needed ]
Contract Management The professional practices solutions that are put in place to help with the design, implementation, and support of Contracts is referred to as the discipline of Contract Management.[9] Enterprises that include entities such as for profit, nonprofit, not-for-profit, and government organizations, often establish and practice pract ice Contract Management in support of agreements that tha t are made with vend vendors, ors, partners, partne rs, customers and other key stakeholders. The activities that are part of Contract Management include but are not limited to things like assigning ownership and accountability for contracts, designing the structure of contracts, reviewing contracts, signing the contracts, filing the contracts, ensuring records retention of contracts, executing the contracts, ensuring support for the contracts, and governing all such activities for quality and adherence to such contracts.
Elements At common law, the elements of a contract are offer, acceptance, intention to create legal relations, and consideration.
Offer and acceptance Main articles: artic les: Off er and acceptance acce ptance and Meeting Meet ing of the t he minds
In order for a contract to be formed, the parties must reach mutual assent (also called a meeting of the minds). This is typically reached through offer and an acceptance which does not vary the offer's terms, which is known as the "mirror image rule". If a purported acceptance does vary the terms of an offer, it is not an acceptance but a counteroffer and, therefore, simultaneously a rejection of the original offer. The Uniform Commercial Commercial Code disposes of the mirror image image rule in §2-207, although the UCC only governs transactions in goods in the USA. As a court cannot read minds, the intent of the parties is interpreted objectively from the perspective of a reasonable person, [10] as determined in the early English case of Smith v Hughes [1871]. Contracts may be bilateral or unilateral. A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other. For example, in a contract for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the seller's promise to deliver title to the property. propert y. These common contracts take ta ke place in the daily d aily flow flow of commerce transact tr ansactions, ions, and in cases with sophisticated or expensive promises may involve extensive negotiation and various condition precedent requirements, which are requirements that must be met for the contract to be fulfilled. Less common are unilateral contracts in which one party makes a promise, but the other side does not promise anything. In these cases, those accept ac cepting ing the offer are not required re quired to communicate their acceptanc acc eptancee to the offeror. In a reward contract, for example, a person who has lost a dog could promise a reward if the dog is found, through publication or orally. orally. The payment ccould ould be additionall ad ditionally y conditioned condit ioned on the dog being returned alive. Those who learn of the reward are not required to search for the dog, but if someone finds the
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dog and delivers it, the promisor promisor is required to pay. pa y. In the similar similar case of advertisements adver tisements of deals de als or bargains, a general rule is that these are not contractual offers but merely an "invitation to treat" (or bargain), but the applicability of this rule is disputed and contains various exceptions. [11] The High Court of Australia stated that the term unilateral contract is "unscientific and misleading". [12] In certain circumstances, an implied contract may be created. A contract is implied in fact if the circumstances imply that parties have reached an agreement even though they have not done so expressly. For example, a patient may implicitly enter a contract by visiting a doctor and being examined; if the patient refuses to pay after being examined, the patient has breached a contract implied in fact. A contract which is implied in law is also called a quasi-contract, because it is not in fact a contract; rather, it is a means for the courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other. Quantum meruit claims are an example.
Intention to be legally bound Main article: artic le: Intention Intent ion to be legally bound
In commercial agreements it is presumed that parties intend to be legally bound unless the parties expressly state the opposite as in a heads of agreement document. For example, in Rose & Frank Co v JR Crompton & Bros Ltd an an agreement between two business parties was not enforced because it contained an 'honour clause' which which stated the parties wish that the agreement not be reviewed or enforced by a court. c ourt. In contrast, domestic and social agreements such as those between children and parents are typically Balfour our v. Balfour a unenforc eable on the unenforceable t he basis of public policy. For For example, in the Engli E nglish sh case Balf a husband agreed to give his wife £30 a month while he was away from home, but the court refused to enforce the agreement when the husband stopped paying. In contrast, in Mer Merritt ritt v Merritt Mer ritt the the court enforced an agreement between an estranged couple.
Consideration Main article: artic le: Consideration Consider ation
Consideration is something of value given given by a promissor promissor to a promisee promisee in exchange exc hange for something of value gi given ven by a promisee to a promissor. promissor. Typically Typically,, the thing of value is a payment, although altho ugh it may be an act, a ct, or forbearance forbeara nce to t o act, act , when one is privileged to do so, such as an adult re refraining fraining from smoking. smoking. This This thing of value or forbearance from some legal right is considered to be a legal detriment. In the exchange of legal detriments, a bargain is created.[13] In the United States, the emphasis has shifted to the process of bargaining as exemplified by Hamer v. Sidway (1891). Roman law-based systems[14] (including Scotland) Scotland) do not require consideration, and some commentators have suggested that consideration be abandoned, and estoppel be used to replace it as a basis for contracts. [15] However, legislation, legislation, rather than t han judicial development, has been touted as the only way to remove this entrenched common law doctrine. Lord Justice Denning famously stated that "The doctrine of consideration is too firmly fixed to be overthrown by a side-wind."[16] Courts will typically not weigh the "adequacy" of consideration as long as the consideration is determined to be "sufficient", with sufficiency defined as meeting the test of law, wherea whereass "adequacy" "adequa cy" is the subjective subject ive fairness or equivalence. For instance, agreeing to sell a car for a penny may constitute a binding contract if a party desires de sires the penny.[17] This is known as the peppercorn rule r ule, but in some jurisdictions, the penny may constitute legally legally insufficient nominal consideration. Parties may do this for tax purposes, attempting to disguise gift transactions as contracts. Transferring money may be sufficient, particularly if there is accord and satisfaction. However, consideration must be given as part of entering the contract, not prior as in past consideration. For
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example, in the early e arly English English case of Eastwood v. Kenyon [1840], the guardian of a young youn g girl girl took out a loan to educate her. After she was married, her husband promised to pay the debt but the loan was determined to be past consideration. The insufficiency of past consideration is related to the preexist preexisting ing duty rule. In the early English case of Stilk v. Myrick [1809], [1809], a captain promised to divide the wages of two deserters among the remaining crew if they agreed to sail home short-handed; however, this promise was found unenforceable as the crew were already contracted to sail the ship. The preexisting duty rule also extendss to general legal duties; for example, extend e xample, a promise to refrain from committing a tort or crime is not sufficient.[18]
Formation In addition to the elements of a contract: A party must have capacity to contract.That means parties in a contract must justify their majority in age to understand terms of the contract and be mentally able. The purpose of the contract must be lawful The form of the contract must be legal The parties must intend to create a legal relationship The parties must consent As a result, there are a variety of affirmative defenses that a party may assert to avoid their obligation.
Affirmative defenses Vitiating factors constituting defences to purported contract formation include: Mistake (such as non est factum) Incapacity, including mental incompetence and infancy/minority Duress Undue influence Unconscionability Misrepresentation or fraud Frustration of purpose Such defenses operate to determine whether a purported contract is either (1) void or (2) voidable. Void contracts cannot be ratified by either party. Voidable contracts can be ratified. In the United States, persons under 18 are typically minor and their contracts are considered voidable; however, if the minor voids the contract, benefits received by the minor must be returned. The minor can enforce breaches of contract by an adult while the adult's enforcement may be more limited under the bargain principle. principle.[citation needed ] Promissory estoppel or unjust enrichment may be available, but generally are not.
Formalitiess and wr Formalitie writing iting Main article: artic le: Statute Statut e of fr frauds auds
Typically, contracts are oral or written, but written contracts have typically been preferred in common law legal systems; [19] in 1677 England passed the Statute of Frauds which influenced similar statute of frauds laws in the United States and other countries such as Australia. [20] In general, genera l, the Uniform Commercial Commercial Code as adopted in the United States requires a written contract for tangible product sales in excess of $500, and real estate contracts are required to be written. If the contract is not required required by law to be written, an oral contract is valid and therefore legally binding.[21] The United Kingdom Kingdom has since replaced the orig o riginal inal
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Statute of Frauds, but written contracts are still required for various circumstances such as land (through the Law of Property Act 1925). If a contract co ntract is in a written form, and somebody signs it, it, then the n the signer is typically bound by its it s terms regardless of whether they have actually read it [22] provided the document document is contractual in nature. [23] However, affirmative defenses such as duress or unconscionability may enable the signer to avoid the obligation. Further, reasonable notice of a contract's terms must be given to the other party prior to their entry into the contract.[24] An unwritten, unspoken contract, also known as "a contract implied by the acts of the parties", which can be either an a n implied-in-fact implied-in-fact contrac c ontractt or implied-in-law implied-in-law contract cont ract,, may also be legally binding. binding. Implied-in-fact Implied-in-fact contracts are real contracts contract s under which the parties receive the "benefit of the bargain". bargain". However, However, contracts implied in law are also known as quasi-contracts, and the remedy is quantum meruit, the fair market value of goods or services rendered.
Invitation to treat Main article: artic le: Invitation Invit ation to treat
Where a product in large quantities is advertised in a newspaper or on a poster, it generally is not considered an offer but instead will be regarded as an invitation to treat, since there is no guarantee that the store can provide the item ite m for everyone who might might want one. one . However, an exception to this th is rule may be made if an advertisement includes a reward, which is what happened in the famous case of Carlill v. Carbolic Smoke Ball Company,[25] decided in nineteenth-century England.
In Carlill , a medical firm, advertised a smoke ball marketed as a wonder drug that would, according to the instructions, protect users from catching the flu. If it did not work, buyers would receive £100 and the company said that they had deposited £1,000 in the bank to show their good faith. When sued, Carbolic argued the ad a d was not to t o be taken ta ken as a serious, legally binding binding offer. It was merely an invitation to treat, and a gimmick (a "mere puff"). But the court of appeal held that it would appear to a reasonable man that Carbolic had made a serious offer, and determined that the reward was a contractual promise.
Third parties The Carbolic Smoke Ball
Main article: artic le: Third party benef be neficiar iciaryy
offer
The doctrine of privity of contract means that only those involved in striking a bargain would would have standing st anding to enforce it. In general genera l this is is still the ca case, se, only parties to a contrac c ontractt may sue for the breach br each of a contract, contrac t, although in recent years ye ars the t he rule of privity has eroded somewhat and third party beneficiaries have been allowed to recover damages for breaches of contracts they were not party to. [citation needed ] In cases where facts involve third party beneficiaries or debtors to the original contracting party have been allowed to be considered parties for purposes of enforcement of the contract. A recent re cent advance has been seen in the case law as well as statutory recogni recognition tion to the dilution of the doctrine of privity of contract. The recent tests applied by courts have been the test of benefit and an d the duty owed test. The duty owed test t est looks to see if the third th ird party was wa s agreeing to pay a debt d ebt for the original party, and whereas the benefit test looks to see if circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. Any defense allowed to parties of the original contract extend to third party beneficiaries. A recent example is the UK's Contracts (Rights of Third Parties) Act 1999.
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Performance Performance varies according to the particular circumstances. While a contract is being performed, it is called an executory contract, and when it is completed completed it is an executed exe cuted contract. In some cases there may be substantial substant ial performance but not n ot complete performance, per formance, which allows the performing party to t o be partiall part ially y compensated.
Uncertainty,, in Uncertainty incom completeness pleteness an and d severance See also: Contra proferentem and Good faith (law)
If the terms of the contract are uncertain or incomplete, incomplete, the parties cannot have reached re ached an agreement in the eyes of the law.[26] An agreement to agree does not constitute a contract, and an inability to agree on key issues, which may include such things as price or safety, may cause the entire contract to fail. However, a court will attempt to give effect to commercial contracts where possible, by construing a reasonable construction constructio n of the contract.[27] Courts may also look to external standards, which are either mentioned explicitly in the contract [28] or implied by comm implied c ommon on practice prac tice in a certain c ertain field.[29] In addition, the court may also a lso imply imply a term; ter m; if price is excluded, the court may imply a reasonable price, with the exception of land, and second-hand goods, which are unique. If there are uncertain or incomplete clauses in the contract, and all options in resolving its true meaning have failed, it may be possible to sever and void just those affected clauses if the contract includes a severability clause. The test of whether a clause is severable is an objective test—whether a reasonable person would see the contract standing even without the clauses c lauses..
Contractual terms Main article: artic le: Contractual Contr actual term ter m
A contractual term is "an[y] provision forming part of a contract". [30] Each term gives rise to a contractual obligation, breach of which can give rise to litigation. Not all terms are stated expressly and some terms carry less legal weight as they are peripheral to the objectives of the contract. Standard form contracts contain "boilerplate", which is a set of "one size fits all" contract provisions. However, the term may also narrowly refer to conditions at the end of the contract which specify the governing law law provision, venue, assignment assignment and a nd delegation, waiver of jury trial, notice, notic e, and force f orce majeure. Restrictive provisions in contracts where the consumer has little negotiating power ("contracts of adhesion") attract consumer protection scrutiny.
Classification of terms Contractual terms are classified differently depending upon the context or jurisdiction. Terms establish conditions precedent prece dent.. English English (but not necessarily n ecessarily non-English) common common law distinguishes distinguishes between important conditions and warranties, with a breach of a condition by one party allowing the other to repudiate and be discharged while a warranty allows for remedies and damages but not complete [31]
[32]:150–1
discharge. Whether or not a term is is a condition is determined in part by the parties' intent. In a less technical sense, however, a condition is a generic term and a warranty is a promise. [31] Not all language in the contract is determined determined to be a contractual term. Representations, Representations, which which are often precontractual, are typically less strictly enforced than terms, and material misrepresentations historically was a cause of action
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for the tort of deceit. Warranties were enforced re regardless gardless of materiality; materiality; in modern United United State Statess law the distinction is is less clear but warranties may be enforced more strictly str ictly.. viewed as "mere puff".
[33]
Statements of opinion may be
In specific circumstances c ircumstances these terms are used differently. For example, in English English insurance law, vi violation olation of a "condition precedent" precede nt" by an insured is a complete defense aagains gainstt the payment pa yment of claims.
[34]:160
In general
[34]
insurance law, law, a warranty wa rranty is a promise that must be complied with. with. In product transactions, warranties promisee that the promis t he product will will continue to function for a certain period of time. In the United Kingdom Kingdom the courts determi dete rmine ne whether a term is a condition or warranty; for example, an actress' actre ss' obligation obligation to perform the opening night night of a theatrical theat rical production is a condition condition,,[35] but a singer's [36]
obligation oblig ation to rehearse re hearse may be a warranty. wa rranty.
Statute may also declare a term or nature of term to be a [37]
condition or warranty; for example the Sale of Goods Act 1979 s15A provides that terms as to title, description, quality and sample are generally conditions conditions.. The United United Kingdom has also contrived the concept of an "intermediate "inter mediate term" (also ( also called innominate), innominate), first eestablished stablished in Hong in Hong Kong Kong Fir Shipping Shi pping Co Ltd v Kawasaki Kawas aki Kisen Kaisha Ltd [1962]. [1962].
Representations Repre sentations versus warranties Statements of fact in a contract or in obtaining the contract are considered to be either warranties or representations. representa tions. Traditionall Traditionally y, warranties are factual factua l promises promises which are enforced through a contract contrac t legal [33]
action, regardless of materiality, materiality, intent, or reliance. Representations are traditionally precontractual statements which allow for a tort-based action (such as the tort of deceit) if the misrepresentation is negligent or fraudulent; [38] historicall historically y a tort was the only action available, but by 1778, breach of warra warranty nty [33]
became a separate sepa rate legal contractual contractua l action. unclear;
In U.S. law law,, the distinction between the two is somewhat
[33]
warranties are viewed as a s primarily primarily contract-based contra ct-based leg le gal action act ion while while negligent negligent or fraudulent fr audulent
misrepresentations misrepresenta tions are tort-based, tort- based, but there is a confusing mix of of case law la w in the United United States. [33] In modern English English law, law, sellers often avoid using the term t erm 'represents' in order to avoid claims under the [39]
Misrepresentation Act 1967, while in America 'warrants and represents' is relatively relat ively common. common. Some modern commentators suggest suggest avoidi a voiding ng the words and substituting 'state' or 'agree', and some model forms do not use the words;
[38]
however, others disagree.
[40]
Statements in a contract may not be upheld if the court finds that the statements are subjective or promotional promotio nal puffery. puffery. English English courts may weigh weigh the emphasis or relative knowledge knowledge in determining determining whether a statement is enforceable as part of the contract. In the English case of Bannerman v. White[41] the court upheld a rejection by a buyer of hops which had been treate t reated d with sulphur sulphur since the buyer expli e xplicitly citly expressed the importance of this requirement. The relative knowledg knowledgee of the pa parties rties may also be a factor, as [42]
in English case of Bissett of Bissett v. Wilkinson Wilkinson where the court did not find misrepresenta misrepresentation tion when a seller said that farmland being sold would would carry 2000 sheep if worked by one team; tthe he buyer was cconsidered onsidered sufficiently knowledg knowledgeable eable to t o accept acc ept or reject r eject the t he seller's opinion. opinion.
Implied Im plied terms A term may either be express or implied. implied. An express term ter m is stated by the parties during dur ing negotiation negotiation or written in a contractual contra ctual document. Implied Implied terms ter ms are not stated state d but nevertheless neverthe less form a provision provision of the contract. Terms implied impli ed in i n fact
Terms may be implied implied due to the factual fac tual circumstances or conduct of the parties. par ties. In the Australian case of
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[43]
BP Ref inery Westernport ester nport v. Shire of Hastings the UK Privy Council Council proposed a five stage test to to determine situations where the facts of a case may imply terms. The classic tests have been the "business efficacy test" and the "officious bystander test". Under the "business efficacy test" first proposed in The oorcock [1889], [1889], the minimum minimum terms necessary to give business efficacy to the contract will will be implied. implied. Under the officious bystander bystander test t est (named in Southern Foundries (1926) Ltd v Shirlaw [1940] Shirlaw [1940] but actually actua lly originating in Reigate in Reigate v. Union Manufacturing Manufactur ing Co (Ramsbottom) Ltd [1918]), [1918]), a term t erm can only be implied in fact if an "officious bystander" listening to the contract negotiations sug suggested gested that tha t the term te rm be included the parties would promptly promptly agree. agree. The difference between these t hese tests is questionable. Terms implied in law
Statutes or judicial judicial rulings rulings may create cre ate implied contractual contract ual terms, ter ms, particularly in standardized relationships such as emplo e mployment yment or shipping contracts. The Uniform Commercial Commercial Code of tthe he United States also a lso imposes imposes an implied implied covenant of good faith and fair dealing in performance and enforcement of contract c ontractss covered by the Code. In addition, Australia, Israel and a nd India imply a similar similar good faith term throug t hrough h laws. Most countries have statutes which deal directly with sale of goods, lease transactions, and trade practices. In the United States, prominent examples include, in the case of products, an implied implied warranty warra nty of merchantability and fitness for a particular purpose, and in the case c ase of homes an implied warranty of habitability. habitabili ty. In the United Kingdom, Kingdom, implied implied terms are created crea ted by the Sale of Goods Act 1979, the t he Consumer Protection Protec tion (Distance Selling) Selling) Regul Regulations ations 2000 and a nd the Su Supply pply of Goods and Services Act 1982.
Setting aside the contract There can be four different ways in which contracts can be set aside. A contract may be deemed 'void', 'voidable', 'voidabl e', 'unenforceable' 'unenforcea ble' or 'ineffective'. Voidness Voidness im implies plies that a contract c ontract never came c ame into existence. Voidability oidability implies implies that one or both parties par ties may declare a contract c ontract ineffective at their the ir wish. wish. Kill Kill fees are a re paid by magazine magazine publishers publishers to authors when their articles are submitted on time time but are subsequently s ubsequently not used for publication. When this occurs, the magazine magazine cannot claim copyright copyright for the "killed" assig a ssignment. nment. Unenforceabil nenforcea bility ity implies implies that neither ne ither party may have recourse to a court for a remedy. Ineffectiveness implies impl ies that the contract contra ct terminates te rminates by order of a court where a public body has failed to sa satisfy tisfy public public procurement law. law. T To o rescind is to set aside or unmake a contract. contrac t.
Misrepresentation Main article: artic le: Misrepresentation Misreprese ntation Misrepresentation means a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding regarding the quality or nature of the product that the t he seller has may constitute misrepresenta misr epresentation. tion. A finding of misrepresentation allow a llowss for a remedy of rescissi re scission on and a nd sometimes damages damages depending on the type of misrepresentation. There are two types of misrepresentation: fraud in the factum and fraud in inducement. Fraud in the factum focuses on whether the party alleging misrepresentation knew they were creating a contract. If the party did not know that they the y were entering ente ring into a contract, contrac t, there is no meeting of the minds, and the contract is void. void. Fraud in inducement focuses on misrepresentation attempting to get the party to enter into the contract. Misrepresentation of a material fact (if the party knew the truth, that party would not have entered into the contract) makes a contract voidable. According to Gordon v Selico [1986] Selico [1986] it is possible possible to misrepresent misrepresent either by words or conduct. c onduct. Generally, Generally, [44]
statements of opinion or intention are not statements of fact in the context of misrepresentation. If one party claims specialist specialist knowledge knowledge on the topic discussed, then it is more likely likely for the courts to hold a
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statement of opinion by that party as a statement of fact.
[45]
Mistake Main article: artic le: Mistake Mistak e (contract (contrac t law) A mistake mistake is an incorrect understanding b by y one or more parties to a contract and may be used as grounds to invalidate invali date the t he agreement. Common law law has identified three different ttypes ypes of mistake in contrac contract: t: common common mistake, mutual mistake, and unilateral mistake. mistake. A common mistake mistake occurs when both parties hold the same mistaken belief of the facts. This This is [46] demonstrated in the case of Bell of Bell v. Lever Brothers Ltd., Ltd. , which established that tha t common mistake mistake can only void a contract if the mistake of the subject-matter was sufficiently fundamental to render its identity different from what was contracted, contract ed, making the performance perf ormance of the contract c ontract impossible. impossible. A mutual mistake occurs when both parties of a contract are mistaken as to the terms. Each believes they are contracting contrac ting to something different. The court usually tries to uphold ssuch uch a mistake if a reasonable interpretation of the terms can be found. However, a contract based on a mutual mistake in judgment judg ment does not cause the contract c ontract to t o be voidable by the party that is adversely affec affected. ted. See Raff les v. Wichel Wichelhaus haus..[47] A unilatera unilaterall mistake mistake occurs when only one party part y to a contract contr act is mistaken as to the te terms rms or subjectsubjectmatter. The courts will will uphold uphold such a contract contr act unless it was determined that the non-mi non- mistaken staken party part y was aware of the mistake and tried to take advantage of the mistake. [48] It is also possible possible for a contract to be void if there was a mistake in the identity of the contra contracting cting party. party. An example is in Lewis v. v. Avery Avery [49] where Lord Denning MR MR held that the contract contrac t can only be avoided a voided if if the plaintiff can show that, at the time of agreement, the plaintiff believed the other party's identity was of vital importance. imp ortance. A mere mistaken mistaken belief as to t o the credibil cre dibility ity of the other othe r party is not sufficient.
Duress and undue influence Main articles: artic les: Duress (contract law l aw)) and Undue influence infl uence Duress has been defined as a "threat of harm made to compel a person to do something agai against nst his or her will or judgment; judgment; esp., a wrongful threat made by one person to compel a manifestation of seeming assent by [50]
another person to t o a transaction transa ction without real volition." volition." An example is in Barton in Barton v Armstrong [1976] [1976] in a person was threatened threatene d with with death deat h if they did did not sign sign the contract. contra ct. An innocent party wishing to set aside a contract duress to the need only to prove that was made and that that the it was a reason entry intofor the contract; theperson burden of proof then shifts to the the threat other party to prove threat had nofor effect in causing the party to enter into the contract. There can also be duress to goods and sometimes, 'economic duress'. Undue influence is an equitable e quitable doctrine that involves involves one person pe rson taking advantage of a position of power over another person through a special relationship relationship such as between pa parent rent and child c hild or solicitor solicitor and client. As an equitable doctrine, the court c ourt has discretion. When no spec special ial relationship relationship exists, the question que stion is whether there ther e was a relationshi re lationship p of such trust and confidence that it should give give rise to such a [51]
presumption.
See Odorizzi v. Bloomfield School District .
[citation needed ]
Incapacity Main article: artic le: Capacity Capacit y (law) Sometimes the capacity of either natural or artificial persons to either enforce contracts, or have contracts enforced against them is restricted. For instance, very ve ry small children children may not be held to t o bargains bargains they have made, on the assumption that they lack the maturity to understand what they are doing; errant employees or
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directors may be prevented from contracting for their company, because they have acted ultra vires (beyond vires (beyond their power). Another example e xample might might be people who are mentally incapacitated, either e ither by disability disability or [52]
drunkenness.
In these cases the contract is either void or voidable.
Illegal contracts Main article: artic le: Illegal Ill egal agreement If based on an a n illegal illegal purpose or contrary to public policy, policy, a contract c ontract is void . In the 1996 Canadian case of Royal Bank of Canada v. v. Newell [53] a woman forg forged ed her husband's signature, signature, and her husband signed agreed to assume "all liability liability and responsib re sponsibili ility" ty" for the t he forged checks. However, the agreement a greement was unenforceable unenforc eable as it was intended to "stifle a criminal prosecution", and the bank was forced to return the payments made by the husband. In the U.S., U.S., one unusual type of unenforceable unenforcea ble contract is a personal employment employment contract contr act to work as a spy or secret agent. This is because the very secrecy of the contract is a condition of the contract (in order to maintain plausible plausible deniability). deniability). If the spy subsequently sues the government on the ccontract ontract over issues like salary or benefits, then the spy has breached the contract by revealing its existence. It is thus unenforceable on that ground, as well as the public policy of maintaining national security (since a disgruntled agent might try to reveal all the the government's government's secrets secre ts during his/her lawsuit).[54] Other types of unenforceable employment employm ent contracts c ontracts include contracts agreeing to work for less than minimum minimum wage wage and forfeiting the right rig ht to workman's compensation compensation in cases c ases where workman's compensation is due.
Remedies for breach of contract Main article: artic le: Breach of contract contrac t Breach of contract c ontract is defined in the Unfair Contract Terms Terms Act 1977 as: [i] non-performance, [ ii] poor performance, [iii] part-per part-performance, formance, or [iv] performance which is is substantially different from what was reasonably expected. Innocent parties may repudiate (cancel) the contract only for a major breach (breach of condition) c ondition),,[55][56] but they may always recover compensatory damages, provided that the breach has caused foreseeable loss. It was not possible to sue the Crown in the UK for breach of contract contra ct before 1948. However, it it was appreciated that contractors might be reluctant to deal on such a basis and claims were entertained under a petition of right right that needed nee ded to be endorsed by the Home Secretary and Attor Attorney-General. ney-General. S S.1 .1 Crown Proceeding Proce edingss Act 1947 opened the Crown C rown to ordinary contractual cclaims laims through the courts as for any other othe r person.
Damages Main article: artic le: Damages There are several different types of damages. Compensatory damages, damages, which are given to the party which was detrimented detrimented by the t he breac h of contract.. With compensatory contract compensatory damages, there are a re two heads hea ds of loss, consequential damage damage and direct damage. Liquidated are andamages estimateand of loss agreed to in greater the contract, so that the court avoids clauses calculating damages compensatory compensatory the parties pa rties have certainty certa inty. . Liquidate Liquid ated d damages may be called "penalty "pena lty clauses" in ordinary language, language, but the t he law distinguishes distinguishes between liquidated liquidated damages (legitim (legitimate ate)) and penalties pe nalties (invalid). A test for f or determini deter mining ng which which category ca tegory a clause falls into was establi esta blished shed by the English English House of Lords in in Dunlop Dunlop Pneumatic Tyre Tyre Co. Ltd v. New Garage Garage &
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[57]
Motor Co. Ltd Nominal Nomi nal damages consist consist of a small cash amount where the court concludes c oncludes that the defendant def endant is in breach but the plaintiff has suffered no quantifiable quantifiable pecuniary loss, and m may ay be sought to obtain a legal legal record of who was at fault. Punitive or exemplary damages damages are used to punish the party at fault; but even e ven though such damages are not intended primarily to compensate, nevertheless the claimant (and not the state) receives the award. Exemplary damages are not recogn rec ognised ised nor permitted in some jurisdictions. jurisdictions. In the UK, exemplary damages are not available for breach of contract, but are possible after fraud. Although vitiating factors (such as misrepresentation, mistake, undue influence and duress) relate to contracts, they are not contractual actions, and so, in a roundabout way, a claimant in contract may be able to get exemplary damages. Compensatory damages damages compensate the plaintiff for actual losses suffered as acc accuratel urately y as possible. possible. They may be "expectation damages", "reliance damages" or "restitutionary damages". Expectation damages are awarded to put the party in as good of a position as the party would have been in had the contract been performed as promised. promised. Reliance damages are usuall usually y awarded where no reasonably reliable estimate of expectation loss can be arrived at or at the option of the plaintiff. Reliance losses cover expense suffered in reliance to the promise. Examples where reliance damages have been awarded because profits are too speculative include the Australian case of McRae of McRae v. Commonw Commonwealth ealth Disposals Commission[58] which concerned a contract for the rights to salvage a ship. In Anglia In Anglia Telev Television ision Ltd v. v. Reed [59] the English Court of Appeal awarded the plaintiff expenditures incurred prior to the contract in preparation of performance. After a breach has occurred, the innocent party has a duty to mitigate loss by taking any reasonable steps. Failure to mitigate mitigate means that damages may be reduced or even denied de nied altogether.[60] However, Professor Michael Furmston
[61]
has argued that "it is wrong to express (the mitigation) mitigation) rule by stating sta ting that the plaintiff
is under a duty to mitigate his loss",[62] citing Sotiros Shipping Inc v. Sameie Sameiet, t, The Solholt .[63] If a party provides notice notice that the contract contra ct will not not be completed, an anticipatory ant icipatory breach occurs. Damages may may be general or consequential. General damages are those damages which naturally flow from a breach of contract. cont ract. Consequential damages are those damages whi which, ch, although not naturally natur ally flowing flowing from a breach, are naturally supposed supposed by both parties at the time t ime of contract formation. An example woul would d be when someone rents a car ca r to get to a business meeting, meeting, but when that person arrives to pick pic k up the ca car, r, it is not not there. General Gener al damages would would be the cost c ost of renting a different car. Consequential damages would would be the lost business business if that person was unable to t o get to the meeting, if both parties knew the re reason ason the party part y was renting the car. However, there is still a duty to mitigate the losses the fact that the car was not there does not give the party a right to not attempt to rent another car. To recover damag da mages, es, a claimant must show that the breach bre ach of contract cont ract caused c aused forceable forcea ble loss. Hadley v. v. Baxendale establis esta blished hed that the test of foreseeabili foreseea bility ty is both objective and/or subjective. In other ot her words, is iitt foreseeable to the objective bystander, and/or to the contracting parties, who may have special knowledge? On the facts fact s of this case, where a miller miller lost production because a carrier c arrier delayed t aking broken mill mill parts for repair, the court held that no damages were payable since the loss was foreseeable neither by the "reasonable man" nor by the carrier, c arrier, both of whom would would have expected the miller miller to have h ave a spare part in store.
Specific performance Main article: artic le: Specifi Speci ficc perf ormance There may be circumstances circumstance s in which it would would be unjust to permit per mit the defa defaulting ulting party simply simply to buy out the injured party with damages. damages. For example where an art collector purchases a rrare are painting pa inting and the vendor refuses to deliver, the collector's damages would would be equal e qual to the sum paid.
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The court may make an order of what is called "specific performance", requiring that the contract be performed. In some circumstances circumstances a court will will order a party to perform his or her promise promise (an order of "specific performance") or issue an order, known known as an "injunction", that a party refrain refr ain from doing doing something that would breach the contract. A specific performance is obtainable for the breach of a contract to sell land or real estate estat e on such grounds that the t he property has a unique value. In the United State Statess by way of the 13th Amendment to the United Stat States es Constitution, specific performance in personal service contracts contract s is only legal "as "as punishmen punishmentt for f or a cr ime whereof whereof the criminal shall be dully convicted ." ."
[64]
Both an order for specific performance and an injunction are discretionary rremedies, emedies, originating originating for the most part in equity. equity. Neither is available available as of right and in in most jurisdictions jurisdictions and most circumstances circumstances a court will not normally order specific performance. A contract for the sale of real property is a notable exception. In most jurisdictions, jurisdictions, the sale of real property is enforceable enforcea ble by specific performance. Even in this case the defenses to an action in equity (such as laches, the bona fide purchaser fide purchaser rule, or unclean hands) may act as a bar to specific performance. Related to orders for specific performance, an injunction may be requested when the contract prohibits a certain certa in action. Action for injunction would would prohibit prohibit the person from performing the a ct specified in the contract.
Procedure In the United States, in order to obtain damages for breach of contract or to obtain specific performance or other equitable e quitable relief, the ag a ggrieved inj injured ured party may file a civil (non-criminal) (non-criminal) lawsuit in state court c ourt (unless there is diversity diversity of citizenship givin giving g rise rise to federal jurisdiction). jurisdiction). If the t he contra ct contains c ontains a valid arbitration arbitrat ion clause, the agg a ggrieved rieved party must submit submit an arbitration ar bitration claim in in accordance accordanc e with the procedures p rocedures set forth in the clause. Many contracts contract s provide that all disputes arising arising thereunder will be resolved by arbitration, arbitrat ion, rather than litigated litig ated in courts. c ourts. Customer claims against against securities brokers and dealers are almost always resolved by arbitration because beca use securities dealers are required, under the terms te rms of their membership membership in self-regul self-regulatory atory organizations organi zations such as the Financial Financial Industry Regul Re gulatory atory Authority (formerly the NASD) NASD) or NYSE NYSE to arbitrate disputes with their customers. The firms then began includin including g arbitration agreements in their customer [65]
agreements, requiring their customers to arbitrate disputes. On the other hand, certain claims have been held to be non-arbitrable if they implicate implicate a public interest that goes beyond the na rrow interests of the parties to the agr a greement eement (i.e., claims that a party violated a contr contract act by engagi engaging ng in illeg illegal al anti-competitive conduct or civil rights rights violations). Arbitration judgments judgments may generally be enforc enforced ed in the same sa me manner as ordinary court judgments. judgments. However, arbitral decisi dec isions ons are generally enera lly immune immune from appeal appea l in the United States unless there is a showing showing that the arbitrator's decisi dec ision on was irrational or tainted by fraud. fra ud. Virtually Virtually all state statess have adopted adopte d the Uniform Uniform Arbitration Act to facilitate the enforcement of ar arbitrated bitrated judgments. judgments. Notably, Notably, New York York State State,, where a sizable portion portion of major commercial commercial agreements are executed execut ed and performed, pe rformed, has not adopted the Uniform Uniform Arbitration Act.[66] In England and Wales, Wales, a contract cont ract may be enforced e nforced by use of a claim, or iin n urgent cases by applying for an interim injunction injunction to prevent a breach. brea ch. Likewise, in the United State States, s, an aggrieved aggrieved party pa rty may apply for injunctive relief to prevent a threatened breach of contract, where such breach would result in irreparable harm that could not be adequately adequate ly remedied by money money damages.
Contract theory Main article: artic le: Contract Contr act theory theor y Contract theory is the body of legal theory that addresses normative and conceptual questions in contract law.. One of the most important questions asked in contract ttheory law heory is why contracts are ar e enforced. enforc ed. One
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prominent answer to this question focuses on the economic prominent economic benefits of enforcing barg bargains. ains. Another approach, associated associat ed with Charles Fried, m maintains aintains that the purpose of contract law is to enforce promises. This theory is developed in Fried's book, Contract as Promise. Other Promise. Other approaches to contract theory are found in the writings writings of legal realists and critical legal studies theorists. More generally, generally, writers have propounded Marxist and feminist interpretations of contract. contrac t. Attempts at overarching understandings of the purpose and nature of contract as a phenomenon have been made, notably relational contract contrac t theory the ory originally originally developed by U.S. U.S. contracts scholars Ian Roderick Macneil Macne il and Stewart Macaulay, building at least in part on the contract theory work of U.S. scholar Lon L. Fuller, while U.S. scholars have been at a t the forefront fore front of developing economic economic theories of contract contrac t focussing on questions of transaction cost and so-called 'efficient breach' theory. Another dimension dimension of the theoretical theore tical debate in contract is its place within, and relationsh relat ionship ip to a wider law of obligations. oblig ations. Obligations Obligations have traditionally traditionally been bee n divided into contracts, contract s, which are voluntarily voluntarily undertaken unde rtaken and owed to a specific person or persons, per sons, and obligations obligations in tort which are based ba sed on the wrongful wrongful infliction infliction of harm to certain cer tain protected protec ted interests, interest s, primarily primarily imposed imposed by the law, law, and typically typica lly owed to a wider class of persons. Recent ly it has been accepted Recently acce pted that tha t there is a third category, category, restitutionary obligations, obligations, based on the unjust enrichment of the defendant de fendant at the plaintiff's expense. Contractual Contractua l li liabili ability, ty, reflecting the constitutive c onstitutive function of contract, contract , is generally generally for failing failing to make things things better (by not rendering the expected expec ted performance), liability liability in tort is generally generally for action (as opposed to omission) omission) making things things worse, and liability in restitution is for unjustly taking or retaining the benefit of the plaintiff's money or work.
[67]
The common common law describes the circumstances under which the law will will recognise the existence existe nce of rig r ights, hts, privilege privil ege or power arising arising out of a promise. promise.
Gallery
A contract from the German marriage Tang dynasty that contract, 1521 records the purchase of a 15 year-old year-old slave for f or six bolts of plain silk and five Chinese coins
Thomas Boylston to Fire insurance contract Thomas Jefferson, Jefferson , Ma May y of 1796 1786, Maritime Insurance Premiums
See also Contract (conflict) Contract of sale Contract awarding Contracting
Negotiation Negotiation Option contract Order (business ( business)) Peppercorn Pepperc orn (legal) (legal)
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Contractual clauses (category) Design Desig n by contract c ontract Document automation Estoppel Ethical implicat implications ions in contracts Force majeure Gentlemen's agreement Good faith Implicit contract (disambiguation) Indenture
Perfect tender t ender rule Principal–agent Principal–ag ent problem Quasi-contract Remedy Restitution Social contract contrac t Specification (technical standard) sta ndard) Standard form contract Stipulation Tortious interfe interference rence
Information asymmetry Invitation to treat Memorandum of understanding understa nding
Unjust enrichment Voidable contract Letters of Assist
By countr country y Australian contract law English Engl ish contract law German contract law Indian contract law United States contract law South African contract law
Notes 1. ^ Elements of a Contract - Contracts (http://contracts.uslegal.com/elementsof-a-contract/) 2. ^ promise legal definition of promise. promise synonyms by the Free Online Law Dictionary (http://legal-dictionary.thefreedictionary.com /promise) 3. ^ Willmott, L, Christensen, S, Butler, D, & Dixon, B 2009 Contract Law, Law, Third Edition, Oxford University Press, North Melbourne Wehberg, Pacta ta Sunt Servanda, The Servanda, The 4. ^ Hans Wehberg, Pac American Journal of International Law, Vol. 53, No. 4 (Oct., 1959), p.775. (http://www (http://www.trans-l .trans-lex.org ex.org /129500); Trans-Lex.org Principle of Sanctity of contracts (http://www (http://www.trans-lex.org/919000) 5. ^ Atiyah PS. (1986) Medical Malpractice and Contract/Tort Boundary (http://scholarship.law.duke.edu /cgi/viewcontent.cgi?article=3852&context=lcp). Law and Contemporary Problems. Problems. 6. ^ Blake V. (2012). When Is a Patient-Physician Relationship Established? (http://virtualmentor.ama-assn.org/2012/05 /hlaw1-1205.html). Virtual Mentor . a b c 7. ^ Bernstein DE. (2008). Freedom of Contract (http://papers.ssrn.com /sol3/papers.cfm?abstract_id= /sol3/papers.cfm ?abstract_id=1239749). 1239749). George George Mason Law & Economics Research Paper No. 08-51.
8. ^ Douglas D. (2002). Contract Rights and Civil Rights Righ ts (http://scholarship.law (http://scholarship.l aw.wm.edu .wm.edu /cgi/viewcontent.cgi?article=1113& context=facpubs). Mich context=facpubs). Michigan igan Law Review. Review. "Contract ontract Management" Management" (http://www.if4it. (http://www.if4it.com com 9. ^ "C /SYNTHESIZED/GLOSSARY /C/Contract_Manag /C/Co ntract_Managemen ement.html). t.html). The International Foundation for Information Technology. Retrieved 17 February 2014. 10. ^ DiMatteo L. (1997). The Counterpoise of Contracts: The Reasonable Person Standard and the Subjectivity of Judgment (http://www.cisg.law.pace.edu/cisg/biblio /dimatteo5.html). South Carolina Law Review. Review . 11. ^ Feinman JM, Brill SR. (2006). Is an Advertisement an Offer? Why it is, and Why it Matters (h (http://paper ttp://papers.ssrn.com s.ssrn.com /sol3/papers.cfm?abstract_id=943315& download=yes). Hastings download=yes). Hastings Law Journal . 12. ^ Wilmot et al, 2009, Contract Law, Law, Third Edition, Oxford University Press, page 34 13. ^ Bronaugh R. (1976). Agreement, Mistake, and Objectivity in the Bargain Theory of Conflict (http://scholarship.law.wm.edu /cgi/viewcontent.cgi?article=2434&context=wmlr). William & Mary Law Review. Review . 14. ^ e.g. In Germany, § 311 BGB 15. ^ e.g. P.S. Atiyah, 'Consideration: A Restatement' in in Essays Essays on Contract (1986) (1986) p.195, Oxford University Press
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16. ^ Central London Property Trust Ltd. v. High Trees House Ltd. [1947] KB 130 Ltd [1959] 2 17. ^ Chappell & Co Ltd v. Nestle Co Ltd [1959] All ER 701 in which the wrappers from three chocolate bars was held to be part of the consideration for the sale and purchase of a musical recording. 18. ^ Collins v. Godefroy (1831) Godefroy (1831) 1 B. & Ad. 950. 19. ^ Michida S. (1992) Contract Societies: Japan and the United States Contrasted (http://digital.law.washington.edu/dspacelaw/bitstream/handle/1773.1 /997/1PacRimLPolyJ199.pdf?sequence=1). Pac Pacific ific Rim Law & Policy Policy Journal . 20. ^ In Australia, the Sales of Goods Act applies. 21. ^ Trans-Lex Trans-Lex.org: .org: international principle (http://www.trans-lex.org/923000) 22. ^ L'Estrange L'Estrange v. v. Graucob [1934] Graucob [1934] 2 KB 394 23. ^ Curtis v. Chemical Cleaning and Dyeing Co [1951] 1 KB 805 24. ^ Balmain Balmain New Ferry Company Ltd v. v. Robertson (1906) 4 CLR 379 25. ^ [1893] 2 QB 256 26. ^ Fry v. Barnes (1953) 2 D.L.R. 817 (B.C.S.C) 27. ^ Hillas Hillas and Co. Ltd. v. Arcos Arcos Ltd. (1932) Ltd. (1932) 147 LT
39. ^ Ferara LN, Philips J, Runnicles J. (2007). Some Differences in Law and Practice Between U.K. and U.S. Stock Purchase Agreements (http://www.jonesda (http://www .jonesday y.com/some-differences-in-lawand-practice-between-uk-and-us-stock-purchaseagreements-04-13-2007/). Jones agreements-04-13-2007/). Jones Day Publications Publications.. 40. ^ Telman J. (2012). Representations and Warranties (http://lawprofessors.typepad.com /contractsprof_blog/2012/05/representationsand-warranties.html). ContractsProf Blog. 41. ^ (1861) 10 CBNS 844 42. ^ [1927] AC 177 43. ^ (1977) 180 CLR 266 44. ^ Bisset Bisset v Wilkinson Wilkinson and and others [1927] AC 177 45. ^ Esso Esso Petroleum Petroleum Co Ltd v Mardon [1976] Mardon [1976] 2 Lloyd's Rep. 305 46. ^ Bell Bell v. v. Lever Brothers Ltd. [1931] Ltd. [1931] ALL E.R. Rep. 1, [1932] A.C. 161 47. ^ Raffles Raffles v. Wichelhaus Wichelhaus (1864) (1864) 2 Hurl. & C. 906. 48. ^ Smith v. Hughes [1871] 49. ^ Lewis Lewis v. v. Avery Avery [1971] [1971] 3 All ER 907 50. ^ Black's Law Dictionary (8th ed. 2004) 51. ^ Johnson Johnson v. v. Buttress (1936) Buttress (1936) 56 CLR 113 52. ^ see in the UK e.g. s.3(2) Sale of Goods Act 1979
503 28. ^ Whitlock v. Brew (1968) Brew (1968) 118 CLR 445 29. ^ Three Rivers Rivers Trading Co., Ltd. v. Gwinear & District Farmers, Farmers, Ltd. (1967) Ltd. (1967) 111 Sol. Sol. J. J . 831 30. ^ Martin, E [ed] & Law, J [ed], Oxford Dictionary of Law, Law, ed6 (2006, London:OUP). London:OUP). a b Law , p. 31. ^ Gillies P. (1988). Concise Contract Law, 105 (http://books.google.com /books?id=H0MdPMgEMbAC&pg=PA105). Federation Press. 32. ^ Koffman L, MacDonald E. (2007). The Law of Contract . Oxford University Press. a b c d e 33. ^ West GD, Lewis WB. (2009). Contracting to Avoid Extra-Contractual
Royal Bank Bank of Canada v. Newell 147 147 D.L.R 53. ^ Royal (4th)) 268 (N.C.S.A.). 1996 case (h (4th (http://can ttp://canlii.ca lii.ca /en/ns/nssc/doc/1996/1996canlii5486 /1996canlii5486.html) and 1997 appeal (http://canlii.ca/en/ns/nsca/doc /1997/1997canlii9871/1997canlii9871.html). Doe , 544 U.S. 1 54. ^ Tenet v. Doe, (http://supreme.justia.com/us/544/1/case.html) (2005). 55. ^ Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 1 All ER 474, 56. ^ The Mihailis Angelos [1971] 1 QB 164 57. ^ [1915] AC 79 at 86 per Lord Dunedin. 58. ^ (1951) 84 CLR 377 59. ^ [1972] 1 QB 60 60. ^ The UCC states, "Consequential damages... include any loss... which could not reasonably be prevented preven ted by cover or otherw otherwise." ise." UCC 2-715.In 2-715.In English law the chief authority on mitigation is British Westinghouse Westinghouse Electric Electric and Manufacturing Co. v. Underground Electric Railway Co. of London[1912] London [1912] AC 673, see especially 689 per Lord Haldane. 61. ^ M.P. Furmston, Cheshire, Fifoot & Furmston's Law of Contract , 15th edn (OUP: Oxford, 2007) p.779. 62. ^ M.P. Furmston, Cheshire, Fifoot & Furmston's Law of Contract , 15th edn (OUP: Oxford, 2007) p.779 n.130. 63. ^ [1983] 1 Lloyd's Lloyd's Rep 605. 64. ^ "13th Amendment to the United States Constitution" Constituti on" (http://www.law.cornell.edu (http://www.law.cornell.edu /constitution/constitution.amendmentxiii.html). Retrieved 2008-10-10.
Liability—Can Your Contractual Deal Ever Really Be the "Entire" Deal? D eal? (http://www.weil.co (http://www.weil.com/files m/files /Publication/563ccf98-648d4e5b-b3e5-129805230615/Presentation /PublicationAttachment/fb77618af943-4797-98a1-2a69d92a4522/ExtraContractual%20Liability%20Article.pdf) The Business Lawyer . a b 34. ^ Burling JM. (2011). Research Handbook on International Insurance Law and Regulation. Edward Elgar Publishing. Pu blishing. 35. ^ Poussard Poussard v. v. Spiers and Pond (1876) (1876) 1 QBD 410 36. ^ Bettini Bettini v Gye (1876) Gye (1876) 1 QBD 183 37. ^ As added by the Sale of Goods Act 1994 s4(1). a b
38. ^ Primack MA. (2009). Representations, Warranties and Covenants: Back to the Basics in Contracts (http://www.natlawreview (http://www.natlawreview.co .com/article m/article /representations-warranties-and-covenants-back-to basics-contracts). basics-cont racts). National National Law Review. Review.
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- an 65. ^ Introduction to Securities Arbitration Overview from SECLaw.com the online leader in securitiess law news, information securitie information and comm c ommentary entary (http://www.seclaw.com/arbover.htm)
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66. ^ New York Civil Procedure Law and Rules § 7501, et seq. 67. ^ Beatson, Beatson, A Anson's nson's Law of Contract (1998) (1998) 27th ed. OUP, p.21
References Ewan McKendrick, Contract Law - Text, Text, Cases and Materials Material s (2005) Oxford University Press ISBN 0-19-927480-0 P.S. Atiyah, Atiya h, The Rise and Fall of Freedom of Contract (1979) (1979) Clarendon Press P ress ISBN 0-19-825342-7 Randy E. Barnett, Contracts Contracts (2003) (2003) Aspen Publishers ISBN 0-7355-6525-2 Scott Fruehwald, "Reciprocal Altruism Altruism as the Basis for Contract," 47 University University of Louisvi Lo uisville lle Law Review 489 (2009).
External links Australian Contract Law La w (http://www.australiancontract (http://www.australiancontractlaw law.com/) .com/) Uniform Commercial Code (United States Contract Law) Law) (http://www.law (http://www.law.cornell.edu/ucc) .cornell.edu/ucc) Cornell Law La w School (http://www.law (http://www.law.cornell.edu/topics/contract .cornell.edu/topics/contracts.html) s.html) contracts: an overview Principles of European Contract Law (http://www ( http://www.jus.u .jus.uio.no/lm io.no/lm/eu.contra /eu.contract.principles.part1.1995/) ct.principles.part1.1995/) United Nations Convention on Contracts Contrac ts for the International I nternational Sale of Goods, Vienna, Vienna, 11 April 1980 (http://www.tititudorancea.c (http://www .tititudorancea.com/z om/z/united_nations_convention_i /united_nations_convention_internat nternational_sal ional_sale_goods. e_goods.htm) htm) LexisNexis Capsule Ca psule Summary: ummary: Contracts (http://www.lexisn (http://www.lexisnexis.com/law exis.com/lawschool/study/outlines school/study/outlines /word/contracts.doc)
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