CONTRACT LAW

A introduction of contract law :

This book has three principal aims. The first is to provide an exposition of the rules that make up the law of contract. To this end it seeks to describe and to analyse the central doctrines of the modern law of contract and to explore the principal controversies associated with these doctrines. It seeks to fulfi l this aim through a combination of text, cases, and materials.

The function of the text is both to explain and to evaluate the principal rules and doctrines of contract law and to provide a commentary on the leading cases and statutes. The cases chosen for inclusion in the book are the leading cases on the law of contract. I have chosen to rely on longer extracts from a smaller range of cases rather than try to include short extracts from every case that can claim to have made an important contribution to the development of the law of contract. Th e decision to restrict the number of cases was made for two reasons. contract law

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First, it is important to allow the judges to speak for themselves. Too great a willingness on the part of an editor to use scissors and paste can create a misleading picture, particularly where the extract consists of the conclusions reached by the judge without setting out the reasoning that led him or her to that conclusion. Secondly, it is important that law students get used to reading cases. Th e ability to read judgments and to extract from them the principle that is to be applied to the facts of the case at hand is an important skill that lawyers must acquire. contract law

They will not acquire that skill if their legal education does not expose them to judgments and instead provides them with books that do all the editing for them. Th e ‘materials’ consist of statutes, statutory instruments, re-statements of contract law, extracts from textbooks, and academic articles. I have used the extracts from academic articles largely for the purpose of illustrating particular points or diff erent interpretations of a case. It has not been possible, for reasons of space, to include lengthy extracts from major theoretical writings on the law of contract.contract law

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Secondly, the book aims to explore the law of contract in its transactional context. It is not confi ned to an analysis of the doctrines that make up the law of contract but extends to the terms that are to be found in modern commercial contracts and the principles that are applied by the courts when seeking to interpret these contracts. Many of the ‘rules’ that
regulate modern contracts are to be found, not in the rules of law, but in the terms of the contract itself. The rules of law are oft en ‘default’ rules, that is to say they apply unless they have been excluded by the terms of the contract. contract law

Many modern commercial contracts do displace the rules that would otherwise be applicable, especially in the case of contracts concluded between substantial commercial entities. Th ese are oft en substantial documents that make elaborate provision for various eventualities. It is therefore important to have regard to the standard terms that are to be found in modern commercial contracts (oft en referred to as ‘boilerplate clauses’). Th e book does not attempt to provide detailed guidance on the
draft ing of contract clauses. But nor does it ignore draft ing issues.

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On a number of occasions I have included the text of the clause that was in issue between the parties for the purpose of trying to identify the issues that can and do confront lawyers in practice. Th is is particularly so in relation to the draft ing of clauses such as exclusion clauses (see Chapter 13), force majeure clauses (see pp. 397–398, Chapter 12, Section 3(e)), entire agreement clauses (see pp. 402–403, Chapter 12, Section 3(j)), and liquidated damages clauses (see pp. 913–919, Chapter 23, Section 11). contract law

It is important to understand why it is that lawyers insert such clauses into
their contracts and why, in the case of clauses such as exclusions and limitations of liability, they can be the subject of vigorous negotiation between the parties (or their lawyers). The third aim is to explore English contract law from a transnational and comparative perspective. This is not a book on comparative contract law but it is no longer possible to ignore the fact that transactions in the modern world are frequently entered into on a crossborder basis. contract law

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As the Lord Chancellor’s Advisory Committee on Legal Education stated in its First Report on Legal Education and Training (HMSO, 1996) at para 1.13: Legal transactions are increasingly international in character. An understanding of the different ways that civilian lawyers approach common law problems can no longer be regarded as the preserve of a few specialists. contract law

Legal education in England and Wales must be both more European and more international. It should not, however, be thought that the mere fact that the parties to the contract are from diff erent jurisdictions has the inevitable consequence that their contract is regulated by rules that diff er from those applicable to purely domestic transactions. contract law

The law aff ords to contracting parties considerable freedom to choose the law that is to govern their contract (see further pp. 398–399, Chapter 12, Section 3(f)) and they will generally select as the applicable law the law of a nation state (usually, but not always, the domestic law of one of the parties to the contract). In the ‘choice of law’ stakes English law has done remarkably well.contract law

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The volume of international trade that has been done on contracts governed by English law is enormous. A glance at the law reports will tell you that some of the leading contract cases have been litigated between parties who had no connection with England other than the fact that their contract was governed by English law. The explanation for this undoubtedly lies in this country’s great trading history, which has been of great profi t to the City of London and to English law, if not to other parts of the United Kingdom. contract law

Some commodities markets have had their centres in England and many standard form commodity contracts are governed by English law. London has also been, and continues to be, a major centre for international arbitration. However, it can no longer be assumed that international contracts will continue to be governed exclusively by the laws of a nation state. Developments are taking place at a number of diff erent levels.

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