The Origins of Contract Law

   One of the main definitions of a 'contract' engaged with by law students in the United Kingdom is indisputably Treitel's interpretation. This can be found in his book 'The Law of Contract'. He states that a contract is 'An agreement giving rise to obligations which are enforced by law'. However, this statement is met with a series of important qualifications, which serve to highlight why it is so difficult to provide your typified, one sentence long, definition to the word. In English law, there is no set definition of what a contract actually is, perhaps because the law is continually evolving and more heavily based upon the precedent gathered from cases in the past and various works by jurists.

Qualifications to Treitel's definition: 

1. The law focuses strongly on objectivity, as opposed to drawing attention to the actual agreement. 

2. Parties to contracts are expected to conform to certain standards of behaviour, terms can be implied as a matter of law.

3. There must be a qualification based on the principles of the freedom of contract. McKendrick in 'Contract Law' provides an example of this in Parliament's attempts to protect the weaker parties within contracts. The party that can better tolerate the loss should always be the one that procures the greater inconvenience, as this will provide a more efficient and quickly produced resolution.

Why don't we need a clear definition of a contract?

Contract law in the United Kingdom developed from the 'action of the assumpsit', a form of action at common law. This focused on procedural considerations rather than substantive ones. Forms of action were then abolished in 1852 via the Common Law Procedure Act 1854 (http://www.legislation.gov.uk/ukpga/Vict/17-18/125/introduction/enacted). This change in the law coincides with an increase in academic thought around the area of contract, as scholars sought to provide clear principles for existing contract cases. This meant that the procedural components of contract law began to take a backseat as focus turned to the substance of claims.

How can we identify a contract without one?

1. Agreement

The typical approach to contract identification is determining whether there has been an acceptance. The orthodox approach to agreement is noting when an offer has been made and when it has been accepted. This can be considered via assessing whether there are set terms and finality within the supposed contract. There must also be an 'expression of willingness to contract on specified terms' (Treitel). Both parties must also assent to the same terms, otherwise there will not be a contract due to the absence of 'consensus ad idem' (or a 'meeting of the minds'). It would be unfair and inequitable to enforce a contractual relationship without consensus ad idem, as an agreement would be enforced whereby one party may not have even realised what they were consenting to.

2. Consideration

Consideration is 'anything given or exchanged or forborne in return for the promise or undertaking of another'. Ultimately, it serves to protect parties to contracts by ensuring that there is an element of mutual exchange as a guiding principle of contract law is that individuals should not be able to 'get something for nothing'. Contracts can also be identified by determining whether the consideration requirement has been fulfilled. In bilateral contracts, ie. agreements in which both parties exchange mutual promises, each promise is regarded as valid consideration for the other. In unilateral contracts, where an agreement is entered into by one party in exchange for the other party's promise to act, the promise is consideration for the performance and the performance provides consideration for the promise. However, it is key to remember that the need for consideration can be removed when promissory estoppel can be applied, therefore may not be an intrinsic or core counterpart of ALL contracts.

3. Intent to create legal relations

The law takes the stance that people should only be forced to adhere to the contracts that they may have generated when they actually intended to be held to the terms under the law. It would be unfair to force someone who had joked about making a payment of a million pounds when they had not made the statement seriously. This need for intent also serves to maintain efficiency in the courts by ensuring that only serious claims are brought forward.