contract + promises Flashcards
lecture 1
contract
a legally enforceable agreement involving one or more promises
post contract formation
- parties liable for non-fulfilment of contract
- no need to wait until there has been reliance
two main issues in contract law
- interpreting the parties words/conduct -> is it reasonable to understand this person is making a binding commitment, if so what are they promising?
- which promises should be enforced -> not all promises are legally binding contracts, (use offer + acceptance, legal relations, consideration)
morality of promise seeking
- justifies the enforcement of promises
- associated with idea that contract is an expression of the ‘will’ of parties and involves consensus or ‘meting of minds’ between contracting parties
(counter) - scepticism about the role of promises in contract law
[do promises play a central role?]
- Patric Atiyah argues:
-> courts often work backwards from conclusion by deciding that there should be an obligation then finding/not a promise
- s1 of argument: law often imply promises in stereotypical situations where it is reasonable to expect legal liability (getting on a bus, ordering food)
-
scepticism of promises: not all promises are legally enforceable
- not all promises are legally enforceable, “if there are good reasons for enforcing some promises and not others, might those reasons provide better explanation for contractual liability than that of the importance of promise keeping itself?”
most common contract
sale of goods
conferring of benefits; unjust enrichment
- usually a reason for imposing legal liability that is more pressing than the notion the promises have been made and need to be kept
- reason being the need to make sure the benefits conferred via the parties exchange have been paid for
conferring of benefits; unjust enrichment: example
- take car but don’t pay for it, either return or be liable for value
- a) lost promises payment and b) has the car
- no explicit promises are made in simple sales good; do not seem like paradigmatic/typical contracts
the liberal contract theory
Charles Fried:
- enforcing promises promotes the dignity and autonomy of promisors because of the convention of promise-making allows people to “determine their own values”
orthodox position on conferring benefits:
- if you sue for goods you are enforcing a promise
- if you want to make a person liable for not breaking a promise, but for receiving a benefit they did not pay for; you need to invoke a different branch of law -> unjust enrichment/restitution
unjust enrichment
a legal principle that states that no one should receive a benefit at the expense of another without compensating the other party
British Steel Crop v Cleveland Bridge & Engineering Co Ltd [1984] ER QBD
- claimant made steel nodes by request of defendant
- (even though parties were at odds on the terms of the draft contract, no formal agreement was ever signed)
- held there was no contract because there was too much left to be agreed
- judge awarded claimant a quantum meruit for work that had been supplied
- C could claim a reasonable sum for the work supplied
restitution in the absence of a contract
where work is done in the anticipation go a contract which never materialises, it may be possible to claim payment for the reasonable value of the work via the restitutionary remedy of quantum merit
quantum merit
quantum meruit is a common law method of assessing damages that allows a claimant to recover a reasonable amount for services rendered or goods supplied
law of contract redundant? -> no
- existence of a contract precludes a claim in unjust enrichment
(Barton v Morris [2023])
Barton v Morris
- contract was for Mr B to get a fee only if the buyer he introduced paid 6.5 million for the property
- SC held Mr B couldn’t get around this by making a claim in unjust enrichment for his trouble in finding the buyer who ended up paying 6m for the property
the existence/or non of a contract is vital for determining the terms on which the good/servicrs were supplied
- in issues like British Steel usually come around because of the existence or non of terms governing what should happen in the event if delay and whether there is any limit or exclusion of the contractors liability
contracts and reliance
some argue the purpose of enforcing a contract is primarily to ensure that someone who relies on a promise should not suffer loss as a result of that reliance
main implications of contract + reliance theory:
- contracts are rather made to make people responsible for the consequences of inducing reliance in others -> emphasis “will” of the parties
- contract law would be hard to separate from tort
- contracts ought not to be enforced when no one has performed or relied
in favour of reliance theory: more consistent with harm principle
[Mindy Chen-Wishart, Contract Law, 2022 7th edn 21]
- arguable that enforcing contracts to protect against detrimental reliance is more consistent with the harm principle (Mill on Liberty)
- only interfere an individuals liberty to prevent harm from others, any other interference is “paternalism” and to be deprecated
- for reliance theorists, moralistic paternalism involved in holding people to their promises simply because it is good for you to be held by them
in favour of reliance: more psychologically realistic
- people are more sensitive to losses than gains
in favour of reliance: fits with the object test of intention
- the idea that contracts are enforced to protect against detrimental reliance arguably fits better with the objective test of intention than theories that the emphasis voluntary nature of a promise
- since the objective approach looks to how a reasonable person would interpret the relevant words and not what the promisor actually meant to say
difficulties with reliance theory
- the clear orthodox position in English Law is that contractual liability arises as soon as agreement is made before any act of reliance
- main remedies for breach of contract are expectation based, not reliance ->
- hard to explain why certain statements and not others generate liability without invoking the idea of a voluntary commitment
