H418/04 - Contract, freedom and protection

Parties and proof

Contract law concerns obligations people voluntarily undertake, such as paying for a bicycle or delivering a promised service.

The parties are the people or legal organisations making the contract. A company can contract in its own name; its customer does not necessarily contract with the employee who serves them. A claimant brings a civil claim; a defendant answers it. Either buyer or seller may occupy either role. A customer claiming for undelivered goods must first identify the supplier who promised delivery.

An agreement is not automatically enforceable. Ordinary contract formation requires agreement, usually identified through offer and acceptance, intention to create legal relations, and consideration, the exchange supporting the promise. Terms must be sufficiently certain. Capacity and any required formalities can also matter. Most everyday contracts need no signature: spoken words and conduct can create them. A friendly promise to attend a party does not become a contract simply because someone accepts it.

The claimant normally bears the burden of proof for the facts establishing the contract and its breach. The civil standard of proof is the balance of probabilities: is the fact more likely than not? A receipt, messages and delivery records may matter. This differs from proving a criminal offence beyond reasonable doubt. A defendant asserting a particular defence may bear the burden for that defence; saying “the claimant has every burden on every issue” is too broad.

Original example: Nia pays a company for a desk. The desk never arrives. She identifies the company, proves the agreed delivery obligation and missed date, and proves loss. The claim is not against the driver merely because the driver was expected to deliver it. If the messages instead show that no order was ever accepted, non-delivery alone does not prove breach of contract.

Sources and remedies

Contract rules come from both judicial decisions and legislation, so a legal argument must identify which source supplies the relevant rule.

Common law develops through cases. Under precedent, lower courts follow binding legal principles from higher courts where the material facts fall within them. A decision about ordinary shop displays does not automatically decide the status of every reward advertisement: differences in the promise matter. Parliament also creates statutory rules, including the Consumer Rights Act 2015 and Contracts (Rights of Third Parties) Act 1999. A statutory exception can change a common-law outcome. Read the provision's conditions rather than treating an Act's title as an answer.

A remedy is the legal response to a wrong. Damages usually compensate contract loss by putting the claimant, so far as money can, in the position proper performance would have produced. They are ordinarily compensatory, rather than a fine for bad behaviour. The claimant must establish recoverable loss; causation, remoteness and reasonable mitigation limit recovery. Mitigation means taking reasonable steps to avoid unnecessary loss, not doing everything imaginable.

Specific performance orders performance of the promise. It is discretionary and generally requires damages to be inadequate; courts do not routinely force personal service. An injunction orders someone to do, or refrain from doing, a particular act, subject to its legal requirements. A right to terminate for a sufficiently serious breach can release future performance obligations; it does not automatically erase all accrued rights. Rescission sets aside a contract for an applicable vitiating reason, such as actionable misrepresentation, subject to its own restrictions. It is not another name for every termination.

Original example: a seller wrongfully refuses to deliver ordinary chairs. Buying equivalent chairs elsewhere may make damages adequate. A unique item creates a stronger argument for specific performance, but the remedy remains discretionary. This outline identifies possible responses; later lessons develop their precise conditions.

Freedom and fault

Freedom of contract allows people to decide whether, with whom and on what terms to contract, within legal limits.

The theory values autonomy, personal choice, and predictable bargains. If someone agrees to sell a used table cheaply, a court ordinarily does not replace the price simply because it thinks the bargain unequal. The consideration rules later studied generally require a legally sufficient exchange, rather than equal economic value. Enforcing promises enables businesses and individuals to plan and invest.

However, voluntary agreement is not permission for every possible term. Rules concerning illegality, duress, misrepresentation and consumer protection constrain freedom. A person may formally choose a standard contract while lacking realistic power to alter it. Freedom to reject a deal may be of little practical value where all available suppliers impose similar terms.

The principle of fault asks how far liability should depend on blameworthy behaviour. Contract liability commonly depends on breaking the promised obligation, even if the defendant was honest or took care. A seller promising to deliver goods cannot ordinarily answer breach merely by saying “I tried hard.” Some obligations, however, require a standard of conduct, such as the reasonable care and skill required of a service provider under section 49 of the Consumer Rights Act 2015. Here the content of the obligation makes care relevant. Frustration, addressed later, may also discharge a contract in exceptional circumstances; every difficulty is not frustration.