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OUTLINE CONTENTS
1 I N T RODUC T ION 1
PA RT 1 F OR M AT IO N OF C O N T R AC T
2 T H E AGR E E M E N T 31
3 F OR M 77
PA RT 2 C O N T E N T S OF T H E C O N T R AC T
5 T H E T E R M S OF T H E C ON T R AC T 139
6 E X E M P T ION C L AUSE S A N D U N FA I R T E R M S 18 3
PA RT 3 FAC T OR S T E N DI N G T O DE F E AT
C O N T R AC T UA L L I A B I L I T Y
7 I NC A PAC I T Y 2 33
8 M I S TA K E 265
10 DU R E S S , U N DU E I N F LU E NC E , A N D U NC ON S C IONA BL E
BA RG A I N S 371
11 I L L E G A L I T Y 405
PA RT 4 PE R F OR M A N C E A N D DI S C H A RG E
12 PE R F OR M A NC E 4 37
15 DI S C H A RGE F OR BR E AC H 503
PA RT 5 R E M E DI E S F OR B R E AC H OF C O N T R AC T
17 DA M AGE S 531
18 SPE C I F IC R E M E DI E S 575
PA RT 6 L I M I T S OF T H E C O N T R AC T UA L O B L IG AT IO N
21 T H I R D PA RT I E S 613
2 2 A S SIG N M E N T 6 61
2 3 AGE NC Y 680
In d e x 697
DETAILED CONTENTS
Preface v
Table of Statutes xx
Table of Statutory Instruments xxviii
Table of European Union Legislation xxx
Table of International and Other National Legislation and Restatements xxxi
Table of Cases xxxii
Some Abbreviations Used in Reference lxxxiv
1 I N T RODUC T ION 1
1. The Nature and Function of Contract 1
(a) Promise or Agreement 1
(b) Functions of Contract 2
(c) Freedom of Contract 4
(d) Sanctity of Contracts 7
(e) The Interest Protected by Contract 8
2. The History of Contractual Obligations in English Law 10
(a) The Early Actions 10
(b) Assumpsit 13
(c) Subsequent Developments 16
3. European and International Influences 20
4. The Content of Contract Law 22
(a) A Law of Contract or of Contracts 22
(b) Effect of Vitiating Factors 23
5. Contract as Part of the Law of Obligations 24
(a) Concurrence of Claims in Contract and Tort 25
(b) Contract and Unjust Enrichment 26
6. Contract and Property 26
PA RT 1 F OR M AT IO N OF C O N T R AC T
2 T H E AGR E E M E N T 31
1. Establishing an Agreement 31
(a) Offer and Acceptance 31
(b) The Test of Intention 34
2. The Offer 35
(a) Offers and Invitations to Treat 35
(b) General Offers 39
(c) Communication of the Offer 41
x Detailed Contents
3. The Acceptance 42
(a) Offer and Acceptance Must Correspond 42
(b) Communication of the Acceptance 45
(c) Acceptor Must Have Knowledge of Offer 52
(d) Prescribed Mode of Acceptance 53
(e) Revocation of the Acceptance 54
4. Termination of the Offer 54
(a) Revocation of the Offer 54
(b) Rejection of the Offer 60
(c) Lapse of the Offer 61
(d) Effect of Death 62
5. Uncertain and Incomplete Agreements 62
(a) Certainty of Terms 63
(b) Incomplete Agreement 69
6. Intention to Create Legal Relations 72
(a) Social Engagements 72
(b) Family Arrangements 73
(c) Determining Intention 73
3 F OR M 77
1. Formal Requirements 77
2. Contracts by Deed 78
(a) How a Contract by Deed is Made 78
(b) When it is Essential to Contract by Deed 80
3. Contracts for Which Writing is Required 80
(a) Statutory Requirements of Writing 80
(b) Contracts of Guarantee 81
(c) Contracts for the Sale or Other Disposition of Land 85
(d) Electronic Contracts 91
4. Formalities Agreed by the Parties: ‘No Oral Variation Clauses’ 92
4 C ON SI DE R AT ION A N D PROM I S S ORY E S TOPPE L 94
1. Consideration 94
(a) Consideration Defined 94
(b) Necessity for Consideration 96
(c) Executory and Executed Consideration 97
(d) Past Consideration 98
(e) Consideration Must Move from the Promisee 100
(f) Consideration Need Not be Adequate 102
(g) Consideration Must be Real 103
(h) Performance of, or Promise to Perform, an Existing Duty 107
(i) Discharge of a Debt 114
(j) Letters of Credit 118
2. Promissory Estoppel 119
(a) Emergence of Promissory Estoppel 120
(b) Scope of Promissory Estoppel 122
Detailed Contents xi
PA RT 2 C O N T E N T S OF T H E C O N T R AC T
5 T H E T E R M S OF T H E C ON T R AC T 139
1. Terms, Collateral Warranties, and Representations 139
(a) Terms and Representations 139
(b) Collateral Warranties 142
(c) Extrinsic Evidence 144
2. Conditions, Warranties, and Innominate Terms 146
(a) Introduction 146
(b) Conditions 147
(c) Warranties 150
(d) Evaluation of the Ab Initio Classification of Terms 150
(e) Innominate Terms 151
(f) Distinguishing Innominate Terms and Conditions 153
(g) Loss of the Right of Discharge 156
(h) Part 1 of the Consumer Rights Act 2015 157
3. Implied Terms 158
(a) Terms Implied by the Courts and by Statute 158
(b) Terms Implied by the Courts 158
(c) Terms Implied by Statute 168
(d) Part 1 of the Consumer Rights Act 2015: Terms Treated as Included 175
4. Interpretation of Terms 175
(a) The Objective and Contextual Approach 176
(b) Particular Rules of Interpretation 180
PA RT 3 FAC T OR S T E N DI N G T O DE F E AT C O N T R AC T UA L
LIA BILIT Y
7 I NC A PAC I T Y 233
1. Grounds of Contractual Incapacity 233
2. The Crown and Public Authorities 234
(a) The Crown 234
(b) Public Authorities 238
3. Corporations and Unincorporated Associations 243
(a) Corporations 243
(b) Unincorporated Associations 246
4. Minors 247
(a) Common Law: Introduction 248
(b) Contracts for Necessaries 248
(c) Voidable Contracts 252
(d) Other Contracts: Unenforceable Unless Ratified 254
(e) The Nature of the Liability of Minors 254
(f) Liability of Minors in Tort 256
(g) Liability of Minors in Unjust Enrichment 257
(h) Restitution in Favour of Minors 261
(i) Third Parties 261
5. Persons Lacking Mental Capacity and Drunken Persons 262
8 M I S TA K E 265
1. Introduction 265
2. Categorizing Mistakes 267
3. Mistakes about the Terms of the Contract 268
(a) ‘Subjective’ and ‘Objective’ Agreement in the Formation of a Contract 268
(b) The ‘Objective Test’ 269
(c) Mistake in Relation to a Written Document 275
(d) Equitable Remedies for Mistakes about the Terms 283
4. Mistakes about the Identity of the Person with
Whom the Contract is Made 285
(a) An Offer can be Accepted only by the Person to Whom it is Addressed 286
(b) The Need for an Identifiable Third Person 288
(c) Written Contracts 291
(d) Transactions Concluded in the Parties’ Presence 291
(e) The Current State of the Law; Critique 293
Detailed Contents xiii
10 DU R E S S , U N DU E I N F LU E NC E , A N D U NC ON S C IONA BL E
BA RG A I N S 371
1. Introduction 371
2. Duress 372
(a) Nature of Duress 372
(b) Unlawful Pressure 374
(c) Duress Distinguished from Legitimate Renegotiation 377
(d) Threats of Lawful Action 379
(e) Rescission 381
3. Undue Influence 382
(a) Nature of Undue Influence 382
(b) Actual Undue Influence 384
(c) Presumed Undue Influence 385
(d) Rescission 391
(e) Undue Influence by a Third Party to the Contract 393
4. Unconscionable Bargains 397
xiv Detailed Contents
PA RT 4 PE R F OR M A N C E A N D DI S C H A RG E
12 PE R F OR M A NC E 437
1. Performance Must be Precise and Exact 437
(a) Standards of Contractual Duty 437
(b) Deviation from Contractual Terms 438
2. Time of Performance 438
(a) Stipulations as to Time at Common Law 438
(b) Stipulations as to Time in Equity 439
(c) Law of Property Act 1925, section 41 439
(d) Mercantile Contracts 440
3. Place of Performance 441
4. Order of Performance 441
5. Payment 441
(a) Introduction 441
(b) Interbank Transfers 442
(c) Payment by Negotiable Instrument or Documentary Credit 443
(d) Payment by Credit or Charge Card 443
6. Vicarious Performance 444
7. Alternative Modes of Performance 445
Detailed Contents xv
15 DI S C H A RGE F OR BR E AC H 503
1. Discharge at Option of the Injured Party 503
(a) Effect of Unaccepted Repudiation 504
(b) Failure of Performance 505
(c) Affrmation of Contract 506
(d) Effect of Election to Accept Breach 506
(e) No Reason or Bad Reason for Claiming to be Discharged 507
(f) Consumer Sale and Supply Contracts: Interaction
with Other Remedies 508
2. Forms of Breach which Justify Discharge 510
(a) Renunciation 510
(b) Impossibility Created by One Party 514
(c) Failure of Performance 516
3. Consequences of Discharge 522
(a) Release from Future Obligations 522
(b) Contract Not Rescinded Ab Initio 522
(c) Accrued Obligations Remain 523
(d) Restitutionary Claims 524
4. Loss of the Right of Discharge 524
16 DI S C H A RGE BY OPE R AT ION OF L AW 525
1. Merger 525
(a) Acceptance of Higher Security 525
(b) Rights Vesting in Same Person 526
2. Discharge by Judgment of a Court 526
(a) Effect of Bringing Action 526
(b) Effect of Judgment for Claimant 526
(c) Effect of Judgment for Defendant 527
3. Alteration or Cancellation of a Written Instrument 527
(a) Rule as to Alteration 527
(b) Bills of Exchange 528
(c) Cancellation and Loss 528
4. Bankruptcy 528
Detailed Contents xvii
PA RT 5 R E M E DI E S F OR B R E AC H OF C O N T R AC T
17 DA M AGE S 531
1. Damages and Other Remedies for Breach of Contract 531
2. Compensatory Nature of Damages 532
(a) Compensation for Loss 532
(b) Damages are Not Punitive 532
(c) Difficulty of Assessment No Bar 533
(d) The Date for Assessment 533
(e) Compensation for Inconvenience or Mental Distress 534
(f) Loss of Reputation 536
3. Basis of Assessment of Damages 537
(a) The ‘Performance’ or ‘Expectation’ Measure 538
(b) The Reliance Measure 540
4. Causation 542
5. Remoteness 542
(a) The Basic Two-Branched Rule 542
(b) The Impact of The Achilleas 546
(c) Should there be a Difference Between the Tests of
Remoteness in Contract and Tort? 548
(d) Type of Damage 549
(e) Damage Arising in the Usual Course of Things 550
(f) Damage Reasonably Supposed to be in the Contemplation
of the Parties 553
6. Mitigation 554
(a) Acting Reasonably 554
(b) Compensating Advantages may Reduce Damages 555
7. Assessment of Damages in Contracts for the Sale of Goods 556
(a) Non-Delivery 557
(b) Late Delivery 557
(c) Non-Acceptance 558
(d) Breach of Warranty 559
8. Claimant’s Contributory Negligence 561
(a) No Apportionment at Common Law 561
(b) Law Reform (Contributory Negligence) Act 1945 561
9. The Tax Element in Damages 562
10. Interest 563
11. Negotiating Damages 565
12. Agreed Damages Clauses 567
(a) Liquidated Damages and Penalties 567
(b) Application of the Traditional Test 569
(c) Necessity for Breach 572
(d) Amounts Recoverable 573
xviii Detailed Contents
18 SPE C I F IC R E M E DI E S 575
1. Actions for the Agreed Sum 575
2. Specific Performance 578
(a) Adequacy of Damages 578
(b) Want of Mutuality 581
(c) Contracts of Personal Service 581
(d) Uncertainty 582
(e) Constant Supervision by the Court 582
(f) Conduct and Hardship 583
(g) Miscellaneous 584
3. Injunctions 584
(a) Prohibitory Injunctions 585
(b) Mandatory Injunctions 588
4. Equitable Damages 588
19 R E S T I T U T IONA RY AWA R D S 589
1. The Recovery of Money Paid 589
(a) Recovery by the Innocent Party 589
(b) Recovery by the Party in Breach 593
2. Restitution in Respect of Services or Goods 596
(a) Introduction 596
(b) Restitutionary Claims by the Innocent Party 596
(c) Quantum Meruit Compared with Damages 597
(d) Restitutionary Claims by the Party in Breach 598
3. An Account of Profits 599
(a) Introduction 599
(b) Attorney-General v Blake 600
PA RT 6 L I M I T S OF T H E C O N T R AC T UA L O B L IG AT IO N
21 T H I R D PA RT I E S 613
1. Introduction 613
2. The Acquisition of Contractual Rights by Third Parties 614
Detailed Contents xix
2 2 A S SIG N M E N T 661
1. Assignment 661
(a) No Assignment at Common Law 661
(b) Assignment in Equity: the Historical Background 662
(c) Assignment under the Law of Property Act 1925 663
(d) Equitable Assignment 666
(e) Assignee Takes ‘Subject to Equities’ 670
(f) Priorities 672
(g) Rights Not Assignable 673
(h) Liabilities Cannot be Assigned 676
2. Vicarious Performance 677
3. Novation 677
4. Assignment by Operation of Law 678
(a) The Effect of Death 678
(b) Bankruptcy 679
2 3 AGE NC Y 680
1. Modes of Creation 681
(a) Actual Authority 681
(b) Ratification 682
(c) Ostensible Authority 685
(d) Usual Authority? 687
2. Effects of Agency 688
(a) The Contractual Relations Between the Principal and the Third Party 688
(b) The Contractual Relations Between the Agent and the Third Party 692
Index 697
TABLE OF STATUTES
Administration of Justice Act (Act for the better Civil Jurisdiction and Judgments Act 1982
preventing frivolous and vexatious Suits 8 & s 34 . . . 527
9 Will III, c 11) 1696, Civil Liability (Contribution) Act 1978 . . . 18, 19
s 8 . . . 567 Coinage Act 1971 . . . 447
Agricultural Holdings Act 1986 Companies Act 1948
s 12 . . . 103 s 43 . . . 344
Sch 2, para 1(1) . . . 103 Companies Act 1985
Apportionment Act 1870 . . . 576 s 35 . . . 245
s 2 . . . 448, 523, 576, 577 s 35A . . . 246
s 7 . . . 576 s 35B… 245
Arbitration Act 1996 Companies Act 1989 . . . 245
s 41 . . . 489 s 108 . . . 245, 246
s 41(3) . . . 457 Companies Act 2006 . . . 243, 244, 245, 246
s 41(6) . . . 33 s 8 . . . 243
Bills of Exchange Act 1882 . . . 18, 81, 167, 626 s 17 . . . 243
s 3(1) . . . 81 s 28(1) . . . 243
s 17 . . . 693 s 31(1) . . . 243
s 17(2) . . . 79 s 33 . . . 34, 625
s 22 . . . 250 s 39 . . . 246
s 25 . . . 693 s 39(1) . . . 245, 686
s 26 . . . 693 s 40(1) . . . 246
s 27(1) . . . 100 s 40(2) . . . 246
s 31(5) . . . 693 s 40(2)(b)(i) . . . 245
s 61 . . . 526 s 41 . . . 246
s 62 . . . 457 s 43 . . . 246
s 64 . . . 528 s 44 . . . 79, 246
s 69 . . . 528 s 46(1) . . . 79
Bills of Lading Act 1855 . . . 649 s 51(1) . . . 684, 694
Bills of Sale Act 1878 . . . 679 s 83 . . . 693
Carriage by Air Act 1961 s 171 . . . 246
Sch 1, Art 23 . . . 228 s 544 . . . 663
Sch 1A, Art 26 . . . 228 Competition Act 1998 . . . 5, 429
Sch 1A, Art 47 . . . 228 Consumer Credit Act 1974 . . . 5, 223, 368, 402
Carriage of Goods by Road Act 1965 . . . 228 s 55 . . . 368
Sch 1, Art 41 . . . 228 s 60 . . . 78, 81, 368
Carriage of Goods by Sea Act 1971 . . . 650 s 64 . . . 78, 81
s 3 . . . 437 ss 67–8 . . . 78
Sch . . . 196, 202, 646 s 76 . . . 464
Sch 1, Art III.8 . . . 228 s 86B . . . 464
Carriage of Goods by Sea Act 1992 . . . 619, 625, s 86D . . . 464
626, 642 s 86E . . . 464
s 2 . . . 649 s 87 . . . 464
s 2(1) . . . 626 s 88 . . . 464
s 2(1)(a) . . . 642 s 100 . . . 572
s 2(5) . . . 642 s 105(1) . . . 83
s 3(1)(a) . . . 642 ss 137–40 . . . 402
s 3(3) . . . 642 ss 140A–140C . . . 402, 403
Cheques Act 1957 ss 140A–140D . . . 229
s 3 . . . 442 s 173(1) . . . 228
Table of Statutes xxi
Fig. 200
TUBERCULOUS ARTHRITIS.
Tuberculous disease of the joints is one of the most frequent of
surgical lesions. It has produced characteristic appearances which
have been known under the name of “scrofula of joints,” until a
clearer recognition of the pathology of the condition led to the
abandonment of the term scrofula. Tumor albus, or white swelling,
was another term commonly applied to these lesions, because of the
anemic appearance of the surface of the swollen joint.
Tuberculous arthritis assumes different phases in proportion to the
involvement of the different component structures of the joint. Some
cases begin purely as a tuberculous synovitis, and may for a long
time be limited to the synovial structures. Others begin within the
spongy texture of the expanded joint ends of the long bones, the
disease spreading from such foci and involving everything in the
path which its products take in the effort to secure spontaneous
evacuation, products of softening and infection travelling in the
direction of least resistance.
It has been the writer’s custom to always follow Savory, in his
suggestion to students to let their mental pictures of consumption of
the lungs and pleuræ serve for illustration in similar disease of joints.
Thus the cancellous bone structure much resembles the lung tissue
in its spongy character. In both a capsule surrounds the mass of
tubercle, and in each, by breaking down of its contents, a cavity is
formed. Moreover, the pleura bears practically the same
resemblance and relation to the lung and the chest wall that the
synovialis does to the bone end and the joint cavity; as we may have
pleuritis with phthisis, so we may have synovitis with tuberculous
ostitis; and as adhesions tend to form in the pleural cavity, so also do
they in the synovial cavity. Furthermore, in each case obliteration of
deeper veins causes the more prominent appearance of the
subcutaneous veins, and as tuberculous pleurisy often terminates in
empyema, so does tuberculous hydrarthrosis often terminate in
pyarthrosis, perhaps with fungous ulceration. In almost every
feature, then, the progress and effect of tuberculosis in the lung and
bone end may be likened to each other.
In some clinics bone and joint tuberculosis constitute nearly one-
third of the total of cases treated. Joints of the lower limb are the
ones most frequently involved in children, while in the adult those of
the upper extremity are generally attacked. It is not often that more
than one joint is involved at one time. The relation of traumatism to
this disease has been frequently discussed, and is variously
regarded. The disease is more common in those who are
predisposed to it by environment or by heredity, in the latter case
hereditary evidences usually being well marked. In such predisposed
individuals, especially in the early years of life, severe injuries are
usually promptly repaired, while the milder traumatisms, which are
often frequent and to which too little attention is paid, seem often to
so far lower tissue resistance as to favor an infection to which the
individual is already favorably predisposed. The true position to take,
then, would appear to be this, that traumatisms rarely lead directly to
joint tuberculosis, but only indirectly by affecting tissue susceptibility.
Thus lesions which begin in the epiphyses lead to what is known
as osteopathic joint disease, while those which have their origin in
the synovia give rise to the arthropathic forms. The former are more
common in children and the latter in adults (Fig. 202).
Pathology.—In regard to the pathology of these conditions it does
not vary from that mentioned in the earlier portion of
this work in connection with the general subject of Surgical
Tuberculosis. The deposit of tubercle in the tissue whose resistance
has been weakened is followed by the formation of granulation
tissue, which, so long as the germs survive, tends to increase and to
make room for itself at the expense of surrounding tissue. At the
same time there occurs a tissue struggle by which the attempt is
made to throw around an active focus a protecting barrier, which in
soft tissues consists of condensed fibrous and connective tissue,
and, in bone, of a sclerotic capsule, as though the intent were to
imprison the disturbing cause, and, by completely enclosing it, effect
protection. When this attempt at encapsulation is successful
spontaneous recovery follows. It will be made successful, to some
extent at least, by treatment whose most important local feature is
physiological rest. On the other hand, when the attempt is
unsuccessful and the barrier is transgressed by granulation tissue,
the lesion will advance in the direction of least resistance, while its
progress will be made known, especially as it approaches the
surface, by very significant signs: adhesion of the overlying
structures and finally of the skin, with purplish discoloration of the
latter. Finally softening occurs with escape of granulation tissue,
which, so soon as it is freed from pressure, will grow more luxuriantly
and with more color, constituting the fungous granulation tissue, to
which German pathologists so often allude, or so-called “proud
flesh.” When this appears upon the surface it is soon infected with
pyogenic organisms, breaks down, and an abscess cavity results,
connecting with the original focus and its extensions. This may be so
placed as to lie outside the joint capsule, which, in some respects, is
fortunate for the patient. The joint function may then be
compromised to only a minor degree.
Fig. 202
Often the direction of least resistance is toward the joint cavity, this
fungous tissue loosening and perforating cartilage or periosteum
before it enters the joint. Having penetrated it again it grows
extensively until the cavity is distended, its rapidity of growth
diminishing with the degree of pressure produced by its
surroundings. This pressure will also make it less vascular, and
when such a joint is opened it at first appears pale and anemic. In
proportion as the joint distends it loses in motility, while should
recovery occur spontaneously or as the result of treatment this tissue
will to some extent disappear, to be replaced by adhesions by which
pseudo-ankylosis is produced. The extent of the intra-articular
involvement will cause obstruction to the deeper return circulation,
and thus is brought about the prominence with which the
subcutaneous veins appear. The degree of hydrarthrosis is
apparently not limited except by the distensibility of the joint. In the
articular or arthropathic forms there is always more or less synovial
outpour.
Fig. 203
Tuberculous panarthritis. (Ransohoff.)
Fig. 204
Fig. 207