⇒ A contract is a legal enforcement of agreements and promises OR an undertaking by someone (usually this is a unilateral 'promise, pledge, or engagement' to use Black's Law Dictionary definition).

⇒ Not all agreements are contracts.

⇒ A contract requires offer, acceptance, intention to create legal relations, and consideration.

⇒ In a unilateral contract, there is just one party e.g. if you lose your pen and offer a general reward to anyone who finds it, you are the only one bound but it is still a contract.

⇒ In a bilateral contract, there are two parties making a promise to each other.

⇒ In a trilateral contract, there are three parties making promises to each other.

⇒ In a multilateral contract, there are more than three parties making promises to each other e.g. a treaty.

⇒ Form:

• Contracts can be made orally, in writing, by deed, conduct, and/or electronically.
• In most formal cases, the terms of a contract are written down: this is proof/evidence and ensures there is no ambiguity of contract.
• A deed historically was a fancy document. Now you simply need to state a document is a deed for it to be one. A deed is a special contract usually used in special circumstance, most commonly when dealing with land.
• You can contract through conduct e.g. if you ask a group of people ‘Who would like to buy this pen?’ and someone raises their hand, that person, by conduct, has agreed to the contract.

⇒ Nature:

• Contract terms may be express e.g. written down.
• Or, they can be implied into a contract e.g. if you live in London and say "Let's meet at King's Cross Station", it is clearly implied you mean King's Cross Station in London and not in some foreign country.

⇒ The doctrine of objectivity means that the law is NOT concerned by what is in your mind but by what you have actually said or done.

⇒ Therefore subjectivity is rarely considered.

⇒ For example, in Crest Nicholson Ltd v Akaria Investments Ltd [2010] Sir John Chadwick said that "the question is 'what did the parties intend by the words used in the agreement which they made'" i.e. the only relevant thing for the court is what has actually been said/done and not what was in the head of either party.

⇒ In Storer v Manchester City Council [1974], Lord Denning said "In contracts you do not look into the actual intent in a man’s mind" but at "what he said and did" → a contract is formed when "to all outward appearances" that a contract has been formed

⇒ Also see the case of Scriven Bros & Co v Hindley & Co [1913].

⇒ Freedom of contract (i.e. the freedom to make a contract): if you are of a certain age and sound mind you can enter a contract freely.

⇒ Freedom from contract (i.e. the freedom not to make a contract): if you are forced to make a contract, the contract is invalid (e.g. if someone points a gun at you and tells you to sign a contract). If you enter a contract freely then you are bound by it.

⇒ Public policy: a contract is invalid if the law does not enforce it. For example, if you smuggle drugs into another country and it was agreed you would get £20,000 for doing so, but then you were not paid, the law will NOT enforce that contract.

⇒ Note the growing influence of unequal bargaining and fairness particularly in legislation.

• English law is not interested in the fairness of a contract. It is only interested in whether you have actually entered into a contract or not.
• By definition, if parties enter a contract freely then it IS fair.
• Contract law emphasises the subjectivity of values: what is fair is up to the parties making the agreement, and not the law.

⇒ There is no requirement of any form (Beckham v Drake [1841]) i.e. a contract can be made orally, in writing, by conduct, etc.

• However, there are exceptions to this:
• Contracts to do with land must be in writing: see below.
• Bills of Sale must be in writing
• Bills of exchange must be inwriting
• Consumer hire purchase and credit contracts: see below.

⇒ A contract for the sale of land, or of any interest in land, is void unless it complies with the Law of Property (Miscellaneous Provisions) Act 1989, section 2 i.e. it must be made in writing.

• However, see the exception to this requirement in Keay v Morris Homes (West Midlands) Ltd [2012].
• Variations to a contract for the sale of land must also be made in writing.

⇒ Bill of Sale (Bill of Sales Act 1882):

• Bills of sale must also be written.
• Bills of sale allow for the legal transfer of rights of personal property and goods from the seller to the purchaser e.g. a receipt after buying a chocolate bar is a bill of sale.
• Bills of sale are useful to show that the purchaser now has ownership of the item.
• However, in Hitchens v General Guarantee Corp [2001], it was held that an oral agreement by a finance company was enough to make a binding bill of sale.

⇒ Bill of Exchange (Bill of Exchange Act 1882):

• This must also be made in writing.
• A bill of exchange is a writing by a party (marker) ordering another party (payor) to pay a certain amount to a third party (payee) e.g. a bill of exchange drawn on a bank account is a "cheque" – hence why cheques must be made in writing!

⇒ Consumer hire purchase and credit contracts (Consumer Credit Act 1974):

• The Consumer Credit Act 1974 says that for a credit card contract to be enforceable it must be in writing and signed by the consumer.

⇒ A contract of guarantee is a contract to perform a promise (or discharge the liability) of a third party in case he/she fails to perform the contract themself.

⇒ It, therefore, makes the third party a second debtor e.g. if you don't pay for your tenancy the guarantor will pay or fulfil the contract for you.

⇒ Whereas a contract of guarantee makes a third party a second debtor, indemnity is where the guarantor becomes the primary debtor.

• Thus, if you provide indemnity the claimant can approach you first for recovery of a debt (unlike in a contract of guarantee where you are a secondary debtor).
• In Yeoman Credit Ltd v Latter [1961] and Sutton & Co. v Grey [1894] the court decided that an oral indemnity was enforceable.

⇒ The law tries to adapt to new technology.

⇒ The Electronic Communications Act 2000 (around the time email started) established that you can have electronic signatures:

• In other words, you can validly sign something electronically.
• In J. Pereira Fernandes SA v Mehta [2006], it was held that to have an electronic signature there must be something in the body of the email saying it is yourself e.g. writing your name at the end of an email is all that is needed!
• In Golden Ocean Group Ltd v Salgaocar Mining Industries [2012] it was said that despite the informal nature of some of the emails sent (in the case), they are legal documents that can be signed.
• It was also held, in Victor Chandler International v Customs and Excise Commissioners [2000], that an email is a legal document.

⇒ The general rule is that no particular form is required to cancel a contract.

⇒ In other words, if you want to cancel a contract you can do that in any form e.g. orally, writing, etc.

• This includes contracts that are required to be formed in writing!
• For example, in Morris v Baron & Co. [1918], a contract was cancelled orally and the court held that was valid.

⇒ If the law requires a certain form to make a contract you must use the same form to change that contract.

⇒ For example, in McCausland v Duncan Lawrie Ltd [1997] it was held that if you try to change/vary a contract of land it must be done so in writing (writing is also required to make a contract of land, too).

⇒ However, if the law does not require a particular form for a contract and someone wants to change that contract they can do so orally e.g. Berry v Berry [1929].

⇒ Firstpost Homes Ltd v Johnson [1995] (Gibson LJ):

• This case made it clear that the court can be flexible with the requirement of form. In other words, if the parties do not follow the particular form requirements for makig a particular contract, the court can decide what to do.
• The "courts were prepared to interpret the statutory requirements generously to enable contracts to be enforced".
• However, more recent cases show how the court has been much stricter on using form (e.g. McCausland v Duncan Lawrie Ltd [1997]).