3.4 Law of contract


Additional information

The rules of contract law

Rules and principles of contract law concerning formation, terms, vitiating factors, discharge of a contract and associated remedies.

Theory of contract law

Analysis and evaluation of the voluntary nature of a contract and of principles governing contract law, with particular reference to the issues specified below:

  • outline of the theory of freedom of contract and the competing need to protect the consumer
  • outline of the distinction between offers, offers in unilateral contract and invitation to treat; outline of acceptances including the rationale for the postal rule and its relationship to electronic communications
  • outline of the rationale for consideration, and of the relationships between consideration and privity, and between consideration and economic duress
  • outline of the nature and effectiveness of exemption clauses
  • outline of the nature and effectiveness of remedies including specifically consumer remedies.

Essential requirements of contract

  • Offer and acceptance.
  • Consideration (including privity of contract).
  • Intention to create legal relations.

Contract terms: general

  • Express and implied terms.
  • Conditions, warranties and innominate terms.

Contract terms: specific terms implied by statute law in relation to consumer contracts

Consumer Rights Act 2015

  • Terms implied into a contract to supply goods:
    • s9 (satisfactory quality)
    • s10 (fitness for particular purpose)
    • s11 (description).
  • Remedies for the breach of a term implied into a contract to supply goods:
    • s20 (short term right to reject)
    • s23 (right to repair or a replacement)
    • s24 (right to a price reduction or a final right to reject).
  • Terms implied into a contract to supply services:
    • s49 (reasonable care and skill)
    • s52 (performance within a reasonable time).
  • Remedies for the breach of a term implied into a contract to supply services:
    • s55 (right to repeat performance)
    • s56 (right to a price reduction).

Contract terms: exclusion clauses

  • Basic understanding of the nature of exclusion and limitation clauses.
  • Common law control of exclusion clauses: rules relating to incorporation; brief understanding of the rules relating to construction.
  • Statutory control of exclusion clauses: Unfair Contract Terms Act 1977 (s2 and s3); Consumer Rights Act 2015 (s31, s57 and s65).

Vitiating factors

  • Misrepresentation (nature, types and remedies).
  • Economic duress (definition and remedies).

Discharge of a contract

  • Performance.
  • Breach (actual and anticipatory breach).
  • Frustration.


  • Compensatory damages (including categories of recoverable loss, causation, remoteness and mitigation).
  • Equitable remedies of specific performance and rescission.
  • Termination of contract for breach.