Part II Related Doctrines, 14 Formation and Certainty

Subject(s):

Breach of contract — Construction of contract — Interpretation of contract — Performance of contract

This chapter surveys some modern approaches to the formation of contracts which illustrate the close similarity in the principles used in some formation cases and construction cases. Given that many formation cases turn upon the meaning and effect of language of correspondence, other documentary exchanges, so-called ‘letters of comfort’, and ‘letters of intent’, it is unsurprising that the techniques are closely related. In construing documentary exchanges to ascertain whether negotiations have crystallized into a binding contract, the principles of objectivity and contextualism are in evidence. The approach to background is wider as there is no restriction on the evidence which the court may consider. Whilst axiomatically the exercise in interpretation is one of ascertaining the content of contractual obligations, a similar technique is deployed where the question relates to the formation of a contract.