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Part I Fundamentals, 1 Sources and General Features

From: Contract Law in Practice

Neil Andrews

Content type:
Book content
Product:
International Commercial Law [ICML]
Published in print:
27 May 2021
ISBN:
9780192897947

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

Subject(s):
Construction of contract — Interpretation of contract

(p. 3) 1  Sources and General Features

Sources and Categories of Contract Law

Dominance of Case Law.

1.01  Most English contractual doctrines of contract law are dominated by case law, notably offer and acceptance, consideration, intent to create legal relations, mistake, misrepresentation, duress, undue influence, unconscionability or exploitation, certainty, breach, frustration, interpretation, remedies, and illegality.

1.02  The long tradition of English case law has produced a finely meshed set of decisions covering most of the obvious points, many of the less obvious ones, and even some of the really bizarre ones, such as the contractual liability of those who supply defective remedies for influenza1 or who fail to ensure that pig-nut hoppers are properly ventilated, resulting in the death of 254 pigs.2

1.03  There are lacunae and loose ends within this body of case law. But most of these are quite trifling. Or, if the gap looks at first quite large, in practice one can often predict quite confidently how, say, an experienced adjudicator, such as a Commercial Court judge, would decide the matter.3

Contexts Where Statute Predominates.

1.04  Admittedly, statute, rather than case law, is the dominant source in some areas of English contract law.4 Examples are: the conferring of rights upon third parties by the Contracts (Rights of Third Parties) Act 1999, the control of unfair or unreasonable exclusion clauses by the Unfair Contract Terms Act 1977, and the control of unfair clauses in consumer contracts by Part 2 of the Consumer Rights Act 2015.5

Contexts Where Statute and Common Law are Intertwined.

1.05  There have been several incursions of statute into fields which nevertheless remain dominated by judicial law, notably, the Law Reform (Frustrated Contracts) Act 1943, the Law Reform (Contributory Negligence) Act 1945, and the Misrepresentation Act 1967. These statutes are relatively minor. But they have become problematic. They have not been successfully implanted within the flesh of the Common Law. These provisions have reminded us that judicial decision-making is flexible, (p. 4) but legislation is fixed, and Parliament’s aims are not always obvious. The result is a tension between pliable (judicial) and inflexible (legislative) law.6

Transnational Soft Law.

1.06  There are various ‘soft law codes’.7 Each code contains rules differing from the Common Law. None is binding in any State. However, the intellectual and ‘transnational’ weight of these remarkable projects cannot be ignored. The five main transnational codes will now be listed:8

  1. (1)  the global ‘commercial’ contract code, UNIDROIT’s Principles of International Commercial Contracts (2016 edition, text and comment), a global project, which is focused on commercial contracts;9

  2. (2)  ‘Principles of European Contract Law’ (PECL), composed by the (Lando) Commission for European Contract Law; Fauvarque-Cosson comments:

The ‘principles’, largely inspired by the laws of different Member States, were elaborated by comparing national laws. There are drafted using terms … so precise and structured that they are more akin to a set of rules ready to be introduced into a Civil Code;10

  1. (3)  the ‘European Code of Contracts’ (ECC), composed by the Academy of European private law specialists, under the direction of Giuseppe Gandolfi; Fauvarque-Cosson11 notes that the ECC code ‘purports less to promote the single market … It remains faithful to the civil law tradition, in particular to the humanist ideals found in the French tradition’;

  2. (4)  the Draft Common Frame of Reference (DCFR), prepared by the ‘Study Group on a European Civil Code’ and the ‘Research Group on EC Private Law (Acquis Group)’; (p. 5) H Eidenmüller and colleagues comment: ‘Notwithstanding its unwieldy name, the text is nothing less than the draft of the central components [not confined to contract law] of a European Civil Code’;12

  3. (5)  the Common European Sales Law (CESL), a proposal for an ‘optional instrument’.13

1.07  In the face of this renaissance of European and global private law scholarship, it would be insular for English lawyers simply to dismiss these projects. But many English lawyers are wary of their legal system succumbing to harmonization, and—much worse—having its law modified and distorted by a supra-national court having powers to issue final interpretation (the model, of course, for the European Court of Justice, especially its interpretation of the Jurisdiction Regulation). For example, Lord Hobhouse, a former House of Lords judge, wrote:14

international commerce is best served not by imposing deficient legal schemes upon it but by encouraging the development of the best schemes in a climate of free competition and choice… What should no longer be tolerated is the unthinking acceptance of a goal of uniformity and its doctrinaire imposition on the commercial community.

Transnational Conventions.

1.08  Another source of harmonized law is the Vienna Convention on the International Sale of Goods (CISG), which has not been ratified by the United Kingdom.15 The UK’s non-membership of this club is an example of the independence of the Common Law. The Vienna Convention has been adopted by nearly eighty nations.

Transnational Standard Form Contracts.

1.09  A variation on the transnational theme is extensive use of standard form contracts within transnational commerce, for example, in the context of financial instruments and derivatives. As Braithwaite notes, in the absence of arbitration clauses, such transactions can come before national courts, especially at times of financial crisis within the relevant markets. The same author notes that English courts tend to emphasize the need for ‘commercial clarity, certainty, and predictability’.16

Lex Mercatoria.

(p. 6) 1.10  Furthermore, there is the widely debated issue whether transnational commerce can draw upon a body of settled contractual principles, a modern ius gentium, known as lex mercatoria.17 Naturally, there are sceptics and enthusiasts, romantics, and pragmatists.

European Union Law.

1.11  Until the United Kingdom’s exit from the European Union in 2020, English law was subject to various EU Directives and Regulations.18 Examples (which have survived ‘Brexit’) are: the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277), the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations (SI 2013/3134), and the Consumer Rights Act 2015.

Contract and Tort Law.

1.12  Many contractual obligations are strict in the sense that a party can be in breach of agreement even though he has exercised all reasonable care to try to satisfy his obligation.19 However, some contractual obligations are less demanding and merely require the exercise of reasonable care, or a similar standard. Normally in a contract for the performance of professional services, the performing party will owe merely an obligation to exercise due care, rather than to guarantee the success of the task.

1.13  In some situations, the relationship underlying the agreement simultaneously involves a Common Law or extra-contractual duty to exercise reasonable care. There might then be overlapping rights and duties in contract and in tort. This is true of many professional relationships. The House of Lords affirmed in Henderson v Merrett Syndicates Ltd (1995)20 that, when a contractual duty of care overlaps with an essentially similar duty of care imposed by the tort of negligence, a claimant can select whichever cause of action he prefers, or indeed plead both (so-called concurrence of claims). The main difference between these ‘concurrent’ sources of claim (‘causes of action’) is the commencement of the limitation period: ‘in cases of breach of contract the cause of action arises at the date of the breach of contract’; but ‘in tort the cause of action arises, not when the culpable conduct occurs, but when the plaintiff first sustains damage’.21 The limitation periods for breach of contract are six years for ordinary (‘simple’, section 5 of the Limitation Act 1980) contracts (oral, written, and partly written contracts, other than deeds or covenants) and twelve years for deeds (section 8 of the Limitation Act 1980).

(p. 7) 1.14  Tort also interrelates with the law of contract in the field of pre-contractual misrepresentations, where the torts of negligent misstatement and deceit to provide sources of damages for inaccurate statements.22

Contract and Unjust Enrichment.

1.15  Contract law often interacts with the law of restitution or unjust enrichment,23 a category of obligations subsisting separately from contract and tort. Restitutionary claims are based on the defendant’s unjust enrichment. Most restitutionary remedies become available without the need to show a contractual breach. However, breach of contract is an essential element in one restitutionary remedy, the remedy of ‘equitable account’: Attorney-General v Blake (2001).24

1.16  A restitutionary claim is not made to remedy a claimant’s loss. Instead, it is a claim in respect of the defendant’s unjust enrichment at the claimant’s expense (eg if the claimant has mistakenly paid money to the defendant), or at any rate enrichment arising as a result of breach of duty or violation of the claimant’s rights.

1.17  The enrichment can constitute money or services or goods or the saving of necessary expense.

1.18  The cause of action based on restitution or unjust enrichment can take various forms: it might be that the benefit was conferred as a result of the claimant’s mistake of fact or law; or that there was a (total) failure of consideration, or duress, or undue influence, or abuse of fiduciary relationship, or an unjustified tax demand.

1.19  There are three main forms of restitutionary relief relevant to contract law: (1) money recovered for a total failure of consideration [3.36]; (2) recovery in respect of goods or services [3.26]; and (3) disgorgement of gains made in breach of contract [29.26].

‘The General Part’ of Contract Law

1.20  The ‘law of contract’ is a set of doctrines which are framework rules and doctrines applicable to all (or at least, most) contracts.25 In addition, the five major principles identified in chapter 2 are general and pervasive features of contract law.

Employment Law.

1.21  In Geys v Société Générale, London Branch (2012)26 the majority adopted the view that the general doctrines of contract law should apply without exception to the gamut of specific contracts, Lord Wilson saying27 that all contracts are at anchor ‘within the harbour which the Common Law has solidly constructed for the entire fleet of contracts’.

Sale of Goods.

(p. 8) 1.22  Similarly, in ‘The Hansa Nord’ (1976),28 Roskill LJ emphasized that there is a general concept of ‘innominate/intermediate term’ which should extend to sale of goods transactions.

Leases.

1.23  In National Carriers Ltd v Panalpina Ltd (1981)29 the House of Lords decided that the doctrine of frustration applies to leases, even though a contract conferring a leasehold interest involves the acquisition by the tenant of an interest in land. The consensual basis of the lease, and the maintenance of a relationship between landlord and tenant, and the non-perpetual quality of leases, tilted the House of Lords towards recognizing that legal relation as a type of contract to which the general principles or doctrines of English contract law should apply (but, on the facts, the relevant lease was not held to be frustrated). Lord Simon said:30 ‘the law should if possible be founded on comprehensive principles: compartmentalism, particularly if producing anomaly, leads to the injustice of different results in fundamentally analogous circumstances’. Lord Roskill said:31 ‘To preserve the dichotomy between leases on the one hand and other types of contract on the other can undoubtedly create anomalies.’ Lord Roskill concluded:32 ‘I can see no logical difference between frustration of a demise charterparty and frustration of a lease. In principle the doctrine should be equally capable of universal application in all contractual arrangements.’

Statute.

1.24  Furthermore, Parliament has enacted legislation designed to apply to all types of contracts, notably, the Misrepresentation Act 1967 which applies to all contracts and to deeds. The Contracts (Rights of Third Parties) Act 1999 applies to all contracts and deeds, except five specific categories, which are mentioned at section 6 of that statute.

1.25  But sometimes statute is inconsistent with general Common Law principle. For example, in Hurst v Bryk (2002)33 Lord Millett noted that the Partnership Act 1890 is incompatible with the Common Law doctrine of termination for repudiation or renunciation.

Contextual Exceptions to General Rule.

1.26  Admittedly, some general rules, which are perceived as unfortunate, might give rise to exceptions which are confined to particular contexts. An example is the growth of the ‘building contracts’ exception to the rule in Woodar’s case (1980) [9.01], which was closely examined by the House of Lords in the Panatown case (1981).34

1.27  At [16.77] there is an Evaluation of the Rule in General Billposting Ltd v Atkinson, which is a peculiarity of employment law (the rule involves the non-survival of a restrictive covenant (p. 9) when an employer has wrongfully terminated the contract).35 Conversely, as noted at [16.73], before Egon Zehnder Ltd v Tillman (2019),36 there had been a special37 regime governing the issue whether an illegal element could be severed from a restrictive covenant contained in an employment contract.

1.28  At [11.142], the author submits that the decision concerning reliance on a fraudulent misrepresentation established in Zurich Insurance Co Ltd v Hayward (2016)38 should become a special and exceptional rule confined to compromises or settlements that were induced fraudulently. And the author also notes during that discussion that there is already a branch of the law of consideration which is tied specifically to contracts of compromise.39

Specific Contracts.

1.29  There is a long list of specific transactions which can be applied and studied as self-contained transactions, or as semi-autonomous features of contract law.40 Chitty in its second volume has a chapter on agency. This is sometimes a type of contract, that is, the dealings between principal and agent give rise to a set of rights and obligations as between those two parties: for example, see the facts of Schuler v Wickman (contract to procure sales of principal’s machinery [24.93]) or Devani v Wells (estate agency contract [4.16]). But agency is also a mechanism by which a contract between the principal and another party can come into existence, following the successful representation of the principal by the agent.

‘Equity’: The Distinction between Common Law and Equity

Jurisdictional History.

1.30  Until 1875 there were separate Common Law and Equity41 courts. The pre-1875 jurisdictional division continues to stamp itself (both conceptually and in (p. 10) terms of terminology) on the exposition and development of modern contract law, even though the courts have long since exercised a combined jurisdiction in both fields. And thus, in the modern law there is still a fundamental distinction between Common Law and equitable doctrines and remedies. This has been bemoaned by modern judges, but the reality is that the complicated interaction between Common Law and Equity continues to underpin (not necessarily enrich) the modern law.42

Equitable Doctrines and Remedies.

1.31  As for doctrines, examples of this classification are the equitable doctrines of rectification, undue influence, unconscionability, and equitable bars upon rescission; and the Common Law doctrines of ‘mistake’ and duress. As for remedies for breach of contract, Equity responds to breach in three main ways: specific performance to; injunctions to; and the remedy of account43 (the remedy of a declaration is also discretionary and rooted in Equity).

Common Law Remedies.

1.32  The money claims for debt and damages are both Common Law remedies.44 A qualification here is that damages in lieu of rescission are available under the jurisdiction known as ‘Lord Cairns’ Act’: section 50 of the Senior Courts Act 1981, originally the Chancery Amendment Act 1858.45 There is a notable example of the supplementary operation of specific performance, in a context where the Common Law remedies of debt and damages were manifestly inadequate, in Beswick v Beswick (1968) [9.22], where Lords Reid, Pearce, and Upjohn extolled the flexibility and potency of this equitable remedy.

Equity’s Modern Decline within Contract Law.

1.33  An inventory of Equity within the modern system of contract law reveals a diminution. Consider the following five modern developments.

1.34  First, there has been a major retreat of Equity from mistake law, in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd (‘The Great Peace’); this decision makes clear that, in the case of contracts supported by consideration, which are, accordingly, non-gratuitous, there is no separate doctrine of shared ‘equitable’ mistake; by contrast, where the agreement is gratuitous and thus founded on a voluntary instrument, such as a deed, there is an equitable doctrine of rescission based on the covenantor’s unilateral error.46

1.35  Secondly, Equity has become virtually invisible within the field of coercion (as distinct from undue influence or unconscionability), following expansion since the 1970s of Common Law duress, with the consequent retraction of Equitable doctrines of coercion or undue (p. 11) influence. Thus Equity is seldom invoked where the ground of rescission is the application or threat of illegitimate pressure so that there has been coercion.47

1.36  Thirdly, since 1944 the courts have virtually abandoned the device of trusts of promises, which is now recognized only in the plainest instances of express creation [9.38].

1.37  Fourthly, there is no separate set of ‘equitable’ principles concerning construction of written contracts.48

1.38  Finally, the Privy Council made clear that equitable relief is unavailable in favour of a buyer who is slightly (a ‘tiny bit’) late when completing a transfer of real property.49

Rescission for Non-fraudulent Misrepresentation.

1.39  It has been contended that rescission for innocent misrepresentation might be usefully deleted from the contractual canon of doctrines, and instead the law of warranties and mistake should suffice.50 This is a bold, but stimulating, suggestion. With respect, even if this idea is attractive (which is doubtful), it could be implemented only by legislation. Such a radical tergiversation from settled doctrine is highly unlikely to be enacted.

Rescission Generally.

1.40  It is here submitted that the model of self-help rescission should be the preferred general approach (adopting the Common Law technique), rather than judicial orders for rescission being in some situations the only available process (such an order being an equitable remedy available in the ‘exclusive’ jurisdiction, ie where the relevant ground of vitiation was not recognized at Common Law before the Judicature Acts). A remoulding of the law of rescission is suggested, so that self-help is in principle available with respect to all grounds upon which rescission can be sought. But, where the particularities of the case preclude self-help, judicial orders should be available. There should be a choice of self-help or judicial rescission available in the general run of matters.

Equity’s Resilience.

1.41  However, the distinction between Common Law and Equity remains ‘bed-rock’ within English private law, and in other Common Law jurisdictions. It will prove hard to eradicate. Although it has been suggested51 that English law should jettison this jurisdictional legacy, it is likely that this distinction will endure for many years, and that even a codification of contract law would merely echo the fundamental conceptual distinctions between Common Law and Equity.52

(p. 12) The Nature of Consensus or Agreement

General Analysis.

1.42  ‘Consensus’53 is something which politicians pretend to have achieved and lawyers try to define, and which historians dignify with mysterious terms such as ‘Entente Cordiale’ and ‘Concordat’. However varied, subtle, elusive, fragile, ambiguous an agreement, or alleged agreement, might be, ‘consensus’ is the subject-matter of this work.

1.43  In general, the parties have formed an agreement, and a ‘consensus’ can be identified, when there has been a proposal to which the other has positively responded. Another possibility is that the parties have by conduct achieved an objectively manifested agreement. In reality, most agreements are formed without a great labour of articulation and without writing.

1.44  Consensus is identified by objective investigation of the parties’ language and conduct.

1.45  The need to find a consensus extends beyond formation of contracts and includes consensual variation or consensual termination of agreements.

Conduct.

1.46  Within the law of estoppel, recognition is given to a type of consensus manifested by conduct This is known as ‘estoppel by convention’ [2.58]. It is interesting that the analysis within that doctrine requires proof that the parties have formed a tacit consensus by a process of mutual understanding, their dealings having ‘crossed the line’, that is, by a process of communication, even if this is merely tacit. The Court of Appeal in Blindley Heath Investments Ltd v Bass (2015) said:54

[92] … we do not think there must be expression of accord: agreement to the assumption (rather than merely a coincidence of view, with both proceeding independently on the same false assumption) may be inferred from conduct, or even silence (see per Staughton LJ in ‘The Indian Grace’ [1996] 2 Lloyds Rep 12, 20 (CA)). However, something must be shown to have ‘crossed the line’ sufficient to manifest an assent to the assumption.

Implied Contracts.

1.47  There is a line of cases concerning the allegation that an implied contract has arisen. It is also important to note the Supreme Court’s analysis in Devani v Wells (2019),55 where the court contextually fledged out an estate agency contract, so that the ‘trigger’ for payment of the commission, although not expressed, could be declared to be apparent (commission at an agreed rate then became payable where the estate agent had procured a willing buyer and there had been successful completion of the relevant property transfer). Similarly, in Modahl v British Athletic Federation Ltd (2001) such an implicit contract was found.56

Implied Mutual Choice.

1.48  Under the rules of Private International Law, a court is sometimes required to determine whether the presence of an exclusive jurisdiction clause impliedly (p. 13) indicates a mutual consent to English law as the governing law of the relevant transaction.57 A similar issue arises in determining whether the arbitration agreement is impliedly subject to the law of the seat.58

Implied Terms.

1.49  It is doubtful whether an implied term in law is anything other than a rule imposed by the legislature or which has received judicial recognition.

1.50  A term ‘implied in fact’ involves the court’s decision ex post facto to graft onto a contractual context an imputed tacit consensus. The better view is that this type of implied term is not founded on actual consensus but is instead a fledging out of the relevant transaction. Steyn LJ in Watts v Aldington (1993) said:59

The foundation of a term implied in fact is not an inferred true intention but an intention which the law imputes to the parties. The enquiry is generally an objective one. The approach of the common law is that it would be time consuming and unrewarding to hear the self-serving evidence of the parties as to their states of mind. On the other hand, evidence of the objective setting of a contract is admissible in aid of the implication of a term.

1.51  Similarly, terms implied by custom are not recognized on the basis of party consensus [18.137], but are a feature of the relevant contractual landscape.

Rectification.

1.52  The first limb of the equitable doctrine of rectification requires the court to be satisfied that a prior consensus was formed and that the final document fails accurately to reflect that prior consensus. For this purpose, the consensus must be a real agreement and not a mere coincidence of subjective intentions: in other words, there must have been an exchange of information or views on the point. The court will scrutinize pre-formation negotiations to determine whether there was such a consensus and whether it continued in an unaltered state until the final stage of formation.60

Modern Developments in English Contract Law

Introduction.

1.53  English contract law is a vast and intricate edifice founded on nineteenth-century foundations. Most of the leading doctrines were settled during that period, as Brian Simpson noted in his famous article, ‘Innovation in Nineteenth Century Contract Law’ (1975).61 Has there been anything significant since?

1.54  There is no real need to dwell on the innovation in Attorney-General v Blake (2001),62 where the House of Lords created an exceptional jurisdiction to order a defendant in breach to disgorge the profit made from his default. That decision has not precipitated a significant case load and in fact appears almost isolated.

(p. 14) 1.55  The six main63 post-nineteenth-century developments within mainstream contract law have been: (i) statutory control of exclusion clauses and unfair consumer terms; (ii) introduction of a third party right of action statutory regime; (iii) elaboration of the Common Law rules of interpretation of written contracts; (iv) classification of contractual terms within the context of breach of contract (although though some take the view that the ‘intermediate’ or ‘innominate’ term was a feature of nineteenth-century law); (v) flexibility in the treatment of agreements to vary contracts; (vi) expansion of the doctrine of duress to include threatened breaches of contract (so-called economic duress). These six contexts will now be considered briefly.

Statutory Control of Exclusion Clauses and Unfair Consumer Terms.

1.56  The Consumer Rights Act 2015 substantially consolidates the complex statutory rules governing consumer protection. But in essence the law has developed as follows.

1.57  Exclusion clauses defeated the Common Law. The courts have been able to eliminate such clauses by discovering or declaring that they were not notified in time to the contracting party, or that they were intended to be contractually binding, or that the wording was insufficiently clear to extend to the relevant form of contractual liability, or that the clause is repugnant to public policy because it purports to exclude or limit liability with respect to fraud. But an exclusion clause which survived these common law forms of attack would be given effect in accordance with the general principle of freedom of contract [2.02]. This would not be surprising or objectionable where the parties were economically strong and legally alert.

1.58  However, in 1977 Parliament introduced measures requiring exclusion clauses to be evaluated according to a general criterion of reasonableness. The same criterion was introduced in the context of so-called business-to-business transactions when the relevant clause is inserted in one party’s written standard terms of business, under section 3 of the Unfair Contract Terms Act 1977. Secondly, certain exclusion clauses were simply invalidated without more: clauses purporting to exclude or restrict liability for negligently inflicted person injury (or death), and clauses derogating from core statutory contractual rights.

1.59  A second wave of statutory regulation occurred in 1995 (repeated in 1998) as a result of European consumer law. This raft of measures is aimed at controlling clauses which are inimical to fair dealing and good faith in transactions affecting consumers. The Consumer Rights Act 2015 tidies up the complicated interaction between the 1977 domestic statute and the 1995/1998 European provisions.

Third Party Rights of Action.

1.60  Anson promises Burrows that Anson will pay £1 million pounds to Treitel, in consideration of something done or promised in return by Burrows to Anson. The Common Law doctrine of privity [9.35] prevented Treitel from suing Anson. In Equity it would be different if the courts could discern a trust created in favour of Treitel, because Burrows would then have assumed the fiduciary responsibility of ensuring that (p. 15) Anson kept his part of the bargain by paying Treitel. But decisions of 1933 (the Vandepitte case) and 1944 (Re Schebsman) brought the trust of a promise device to a virtual halt [9.38].

1.61  The third party right of action context is now governed by statute (the Contracts (Rights of Third Parties) Act 1999), a result of the careful work undertaken by the English Law Commission. It is an example of the courts declining to alter the Common Law, withdrawing in substance the circumvention of the Common Law by Equity, and passing the matter to the legislature. The 1999 statute enabling Treitel to sue Anson is carefully constructed to balance the interests of the third party and the contracting parties’ interest in varying the contract [9.70].

1.62  However, in commercial contracts, a boilerplate clause regularly excludes the 1999 Act. The result is that statute has remedied the defects of judicial law. But the marketplace is not overly impressed by the new statutory tools and has chosen to keep life simple by excluding the new device.

Interpretation of Contracts.

1.63  The technique of construing written contracts is probably the most important topic within commercial contract law. In England it is dominated by the principles enunciated by Lord Hoffmann in the Investors Compensation Scheme case [20.18]. In essence, the courts must give objective effect to the language, consistent with sensible business expectations (so-called commercial common sense), but without reference to the parties’ actual negotiations, declarations of subjective intention, or post-formation dealings. The chosen words are king. But there is an exception to the invisibility of pre-contractual negotiations: the equitable doctrine of Rectification (chapter 21) permits the court to revise the text to remedy a mismatch between the parties’ pre-formation settled intention and the wording in fact adopted (a second ground of rectification is where the court substitutes language to reflect one party’s mistaken understanding of the contract’s effect, provided the opposing party was aware of that mistake but in bad faith failed to point it out). Furthermore, even without resort to Rectification the courts are at liberty to reconstruct phrases if it is obvious that something has gone wrong in the contractual formulation and it is also evident what is necessary to cure the textual defect (so-called corrective construction).

1.64  And so, in this field of interpreting written contracts, the objective principle [2.18] of contract law operates strongly. But there are various interpretative rules designed to avoid arid literalism: (i) the transaction’s factual matrix, that is, commercial background, must be kept in view; (ii) words must be construed to promote business or commercial common sense; (iii) the whole contractual text must be read in a harmonizing fashion, rather than odd phrases being read in isolation; (iv) bungled language can be straightened out if it is obvious how the contract should properly read (so-called `corrective construction’); (v) in extremis the text can be rewritten using the criteria explained above of equitable Rectification.

1.65  In general, the modern law of interpretation has fallen back in step with sensible business expectations. But the unwillingness of English courts to consider pre-contractual negotiations is odd from a comparative perspective (‘the English approach’). The case in favour of the English approach turns on issues or perceptions of efficiency, certainty, and predictability. It is submitted that the English approach is pragmatically sound ([20.27] to [20.44]). (p. 16) However, the reality is that parties regularly plead Rectification in order to open the door to the court’s reception of pre-formation negotiation evidence.

Breach of Contract and Classification of Terms.

1.66  Innocent parties deserve to be able to find out the answers to the conundra raised by issues of breach, without waiting several years for a commercial court of arbitral tribunal to pronounce. But in the Hongkong Fir case on 20 December 1961 the Court of Appeal made clear that a contractual obligation might be of an intermediate (or ‘innominate’) nature, neither ex ante a condition giving rise to an unqualified right to terminate for breach, nor a mere warranty destined never to permit the innocent party to terminate. An intermediate or innominate term occupies a middle ground between a condition and a warranty: only if the actual consequences of breach prove to be very serious indeed will the innocent party be entitled to terminate the contract.

1.67  One view is that the doctrine of intermediate terms was newly minted in this case. A rival view is that the HongKong Fir case was not an innovation but merely gave terminological prominence to a flexible approach secreted in the nineteenth-century case law. But the idea has become securely lodged and has had a collateral influence on the treatment of breach generally.

1.68  The attraction of this approach, ‘let’s wait and see how serious breach proves to be’, is that broader issues of proportionality and fairness can be considered by the court or arbitral tribunal. In the HongKong Fir case it was evident that the Court of Appeal viewed the charterer’s wish to be shot of a defective vessel as largely unmeritorious and opportunistic. However, the problem is that the degree of breach disclosed on the facts of that case was hardly trivial or insubstantial.

1.69  The modern law of breach of contract displays a dualism or schizophrenic tension: cases remain where careful language can entitle the innocent party to pull out even though there has been a trifling or technical default by the other party; by contrast, in some contexts the courts seem highly reluctant to allow the innocent party to terminate the contract even though there has been a significant level of default, although admittedly not catastrophic or overwhelming.

1.70  As between businesses, the principle of freedom of contract [2.02] requires the courts to respect clauses which unequivocally entitle the innocent party to terminate the contract in the relevant circumstances. The courts and arbitral tribunals should not second-guess such provisions.

Variation Agreements and the Doctrine of Consideration.

1.71  Sir Frederick Pollock, the Victorian textbook writer, and the first editor of the Law Quarterly Review, spotted the central problem here. English law’s commitment to the bargain theory of promise enforcement had led it to apply the consideration doctrine not just to the formation of contracts but to subsequent agreements to vary contracts. An antique Common Law doctrine known as the rule in Pinnel’s case continues to protect creditors: their promise to cancel some or all of a clear debt was nudum pactum unless made by way of formal deed or accompanied by a new bargain, something—however token—being given in return by the debtor [6.63]. And in the flip-side context where an agreement to perform work or convey something proved unattractive, the intended recipient’s promise to pay more for the same job or performance would be nudum pactum unless made by way of formal deed or accompanied by a (p. 17) new bargain, something—however token—being added to the performing party’s obligation [6.48]. The insinuation of consideration into the context of both (i) decreasing (or forbearance) pacts (promises to reduce or cancel a debt) and (ii) increasing (or ameliorative) pacts (promises to pay more or otherwise to improve terms) had become bedrock doctrine during the nineteenth century and indeed earlier in the case of category (i) pacts.

1.72  But two innovations have been suggested during the twentieth century, only one of which has become embedded. In the creditor context, the Common Law’s insistence on fresh consideration remains the starting point but it has been suggested that Equity, in the form of promissory estoppel, might enable the courts to protect the debtor who has relied on the cancellation promise by making a part payment. However, promissory estoppel might not prevail in this context [6.74]. The better view appears to be that a landlord’s or licensor’s promise to adopt a temporary reduction in payment, even if acted on by the tenant or licensee, might not render the creditor legally incapable of collecting the arrears.

1.73  The second change, already embedded, is that the Court of Appeal in Williams v Roffey and Nicholls [6.48] has modified the consideration rule so as to uphold promises made to pay more for the same performance, provided the increasing pact was given without the promisee’s duress or fraud. Here the innovation has been not to excise consideration as part of the law governing variations of contracts. Instead the law has progressed, becoming more flexible and commercially astute, by recognizing that contracts of variation, if freely made, reflect the parties’ overriding wish to remain on cooperative good terms so that the relationship does not founder.

Economic Duress.

1.74  It should be noted that the development in Williams v Roffey and Nicholls presupposed that it was possible to invalidate variations which result from duress. But that possibility had emerged only during the 1970s when the doctrine of duress was broadened by Kerr J in ‘The Siboen and The Sibotre’ to include threatened breaches of contract. Kerr J’s expansion was quickly ratified by the higher courts in other cases [13.06].

Other Changes.

1.75  In addition to the major changes just mentioned, there have been smaller shifts of the contractual tectonic plates:

  1. (1)  overall, statutory requirements for writing have been reduced [5.01];

  2. (2)  damages for misrepresentation, and certain other adjustments, have been introduced by statute under the Misrepresentation Act 1967;

  3. (3)  undue influence has been elaborated (chapter 14);

  4. (4)  the doctrine of mistake has been circumscribed [12.22];

  5. (5)  there has been elaboration of the heads of damages for breach of contract (chapter 28);

  6. (6)  the unilateral mistake category of rectification has been recognized [21.35].

False Starts and Partial Successes.

1.76  Here the activity has been stirred by two brilliant judges, Lords Denning and Hoffmann.

1.77  The doctrine of shared mistake renders a contract void when the parties are both mistaken in the same respect concerning a fundamental aspect of the transaction [12.06]. It is not enough that there has been an error of quality or even a serious mistake concerning the transaction’s effects. The error must be essential and completely radical. At Common Law, therefore, the operative scope of error is narrow. This is defensible, otherwise mistake (p. 18) would unravel transactions too freely and would operate harshly on the party insisting on upholding the contract. In the absence of misrepresentation, a quite separate doctrine, the non-mistaken party should generally be able to uphold the contract. Furthermore, Common Law void transactions operate harshly on third parties who have in good faith supposed that title has passed from A to B, whereupon B has sold the property to the third party.

1.78  Against this background, Denning and Bucknill LJJ in Solle v Butcher (1950) purported64 to recognize a parallel doctrine of shared fundamental mistake in Equity. Unlike Common Law, the impact on the contract of error in Equity was that the transaction was voidable rather than void. Third parties dealing in good faith would enjoy protection. The courts could set aside the vitiated contract on terms, achieving flexible readjustment of the parties.

1.79  Although this doctrine of equitable mistake did not produce an avalanche of voidable transactions, it had seemed for some time that this innovation had taken root. But a determined Court of Appeal in ‘The Great Peace’ [12.22], led by Lord Phillips, and adopting the critical approach of the first instance judge, Toulson J, declared that Solle v Butcher lacked authority and that it was inconsistent with the House of Lords’ decision in Bell v Lever Bros (1932).65 In England it is already too late to bemoan this rather cavalier decision to invalidate an earlier Court of Appeal decision which arguably rested on House of Lords authority in Cooper v Phibbs (1867).66 And on balance, the coexistence of a Common Law and equitable doctrine was difficult. The episode reveals the slipperiness of the rules of precedent, the extreme conservatism of some judges in the modern era, and the overriding wish to avoid vague grounds for invalidating contracts.

1.80  An earlier defeat for Lord Denning MR occurred when his minority judgment [15.16] in Lloyd’s Bank v Bundy (1975)67 was quickly repudiated by the House of Lords and the Court of Appeal.68 According to Lord Denning, the underpinning concept, uniting duress, undue influence, and miscellaneous related doctrines, is inequality of bargaining power. But a judicial power to invalidate contracts on this broad basis would inject unacceptable uncertainty. Furthermore, the doctrines allegedly united in this way are better viewed as independent grounds rather than manifestations of a broader concept. This bold attempt to innovate, made towards the end of his long career, was a complete failure and deservedly so.

1.81  Lord Hoffmann, at the end of his distinguished judicial career, delivered two controversial judgments. The first advocated a ‘scope of duty’ approach to difficult issues of remote contractual damages: Transfield Shipping Inc v Mercator (‘The Achilleas’) (2008).69 The second decision purported to eliminate traditional tests for implied terms in written contracts: Attorney-General of Belize v Belize Telecom Ltd (2009).70 The ‘scope of duty’ analysis (p. 19) has become embedded, but its role is restricted to supplementing the traditional remoteness test [28.152] and. The second idea has been repudiated.

Doctrinal Controversies: Evaluation

1.82  The topics considered critically in this work, that is, where an evaluation is made whether the topic is in a satisfactory state, are as follows (for reasons of economy, discussion of those issues will not be summarized here):

  1. (1)  Estoppel by Silence [2.26]

  2. (2)  Indirect Revocation of Offers [3.109]

  3. (3)  E-mailed Acceptance [3.143]

  4. (4)  Retraction of Posted Acceptance [3.155]

  5. (5)  ‘Acceptance’ within Unilateral Contracts [3.174]

  6. (6)  ‘The Battle of the Forms’ [3.209]

  7. (7)  Pre-formation Negotiation Agreements: Walford v Miles [4.35]

  8. (8)  Negotiation Agreements and Dispute-Resolution Clauses [4.42]

  9. (9)  The Rock Decision and ‘No Oral Modification’ Clauses [5.29]

  10. (10)  Consideration as a Test for Formation of Contract [6.26]

  11. (11)  The Past Consideration Rule [6.40]

  12. (12)  Increasing or Ameliorative Pacts: Goodbye to Consideration? [6.59]

  13. (13)  The Rule in Pinnel’s Case: Decreasing or Forbearance Pacts [6.82]

  14. (14)  Intent to Create Legal Relations [7.06]

  15. (15)  Promisee Prima Facie Unable to Sue for Third Party’s Loss [9.05]

  16. (16)  In Support of the Narrow View (Damages Sought on Behalf of a Third Party) [9.21]

  17. (17)  Reflections on the Regime Governing Third Party Rights [9.30]

  18. (18)  Contribution Proceedings and Foreign Law [9.115]

  19. (19)  Watteau v Fenwick (1893): Anomalous Liability of Principal in Absence of Apparent Authority, Actual Authority, or Ratification [10.38]

  20. (20)  Supervening Falsification [11.46]

  21. (21)  Rescission and the Non-Fraudulent Representor [11.72]

  22. (22)  ‘Fiction of Fraud’ and the 1967 Act [11.113]

  23. (23)  The Zurich Case, Bogus Claims, and the Categories of Vitiation [11.137]

  24. (24)  Mistake as to Identity (1) and (2): Distance and Face-to-Face Dealings [12.60] and [12.61]

  25. (25)  Duress as to Person: the Two Anomalies [13.27]

  26. (26)  Illegitimate (But Not Unlawful) Pressure [13.38]

  27. (27)  Undue Influence: the Birks/Chin Analysis [15.12]

  28. (28)  Inequality of Bargaining Power Doctrine [15.19]

  29. (29)  Wrongfully Dismissed Employee Released from Restrictive Covenants [16.77]

  30. (30)  The Parol Evidence Rule [17.27]

  31. (31)  Signature Rule’s Only Exceptions are Duress, Misrepresentation, or Non Est Factum [17.87]

  32. (32)  Implied Terms and Material Deleted During Negotiations [18.50]

  33. (33)  The Two Tests for Terms Implied in Fact [18.76]

  34. (p. 20) (34)  Good Faith and Fair Dealing [19.27]

  35. (35)  Objectivity and Common Mistake Rectification [21.33]

  36. (36)  Scope of Unilateral Mistake Rectification [21.47]

  37. (37)  Exclusion Clauses: ‘Direct’ and ‘Consequential’ Loss [22.38]

  38. (38)  Termination by Implied Mutual Abandonment [23.12]

  39. (39)  Renunciation by Communication to a Third Party [24.12]

  40. (40)  Good Faith Breach: Neutral Evaluation of a Disputed Issue [24.72]

  41. (41)  Termination for Breach Clauses: the Rice Case and Freedom of Contract [24.129]

  42. (42)  The Entire Obligation Doctrine [25.16]

  43. (43)  White & Carter and the ‘Legitimate Interest’ Doctrine [27.66]

  44. (44)  ‘Cost of Cure’ or ‘Reinstatement’ Damages [28.80]

  45. (45)  Scope of ‘Negotiating Damages’ [28.115]

  46. (46)  The Transfield Case and Scope of Duty Analysis [28.178]

  47. (47)  Unduly Restricting a Defendant’s Scope of Duty [28.227]

  48. (48)  Mitigation: the Three Rules [28.236]

  49. (49)  Contributory Negligence [28.273] and [28.276] and [28.277]

Footnotes:

1  Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 (CA).

2  Parsons Ltd v Uttley Ingham & Co [1978] QB 791 (CA).

3  On the high quality of Commercial Court judges, Neil Andrews, English Civil Justice: Progress and Remedies: Nagoya Lectures (Shinzan Sha Publishers 2007) 3–303.

4  AS Burrows, ‘The Relationship between Common Law and Statute in the Law of Obligations’ (2012) 128 LQR 232; and on the codification question, Neil Andrews, Contract Law (2nd edn, CUP 2015) ch 22.

5  Formerly, the Unfair Terms in Consumer Contracts Regulations 1999. On the Victorian flurry of codification of particular transactions (Bills of Exchange Act 1882, the Factors Act 1889, the Partnership Act 1890, the Sale of Goods Act 1893, and later the Marine Insurance Act 1906), A Rodger, ‘The Codification of Commercial Law in Victorian England’ (1992) 108 LQR 570; and the overview in the Law Commission’s report on ‘Sale and Supply of Goods’ (Law Commission Report No 160, HMSO, 1987), para 1.5.

6  For general observations, AS Burrows, Thinking About Statutes: Interpretation, Interaction, Improvement: The Hamlyn Lectures 2017 (2018).

7  Andrews, Contract Law CUP, ch 23; L DiMatteo and others (eds), Commercial Contract Law: Transatlantic Perspectives (CUP 2014).

8  On these developments, H MacQueen, ‘Europeanisation of Contract Law and the Proposed Common European Sales Law’ in L DiMatteo and others (eds), Commercial Contract Law: Transatlantic Perspectives (CUP 2014), ch 21, at 530–31; for other summaries of these projects, Bénédicte Fauvarque-Cosson, ‘The Contribution of European Jurists in the Field of European Contract Law’ in Mads Andenas and others (eds), Liber Amicorum Guido Alpa: National Private Law Systems (British Institute of International and Comparative Law 2007) 365; Stefan Vogenauer, ‘Common Frame of Reference and UNIDROIT Principles of International Commercial Contracts: Coexistence, Competition, or Overkill of Soft Law?’ (2010) 6 (6) European Review of Contract Law; and (<http://ssrn.com/abstract=15813522010>); Mel Kenny, ‘The (D)CFR Initiative and Consumer Unfair Terms’ in L DiMatteo and others (eds), Commercial Contract Law: Transatlantic Perspectives, ch 15.

9  (2016 edition, text and comment), a global project, which is focused on commercial contracts; MJ Bonell, ‘Do We Need a Global Commercial Code?’ (2000–2003) V, Revue de droit uniforme (Uniform Law Review) 469; MJ Bonell (ed), The UNIDROIT Principles in Practice: Case Law and Bibliography on the UNIDROIT Principles of International Commercial Contracts (2nd edn, Transnational Publishers 2006); E Broerdermann, UNIDROIT Principles of International Commercial Contracts: An Article-by-Article Commentary (Kluwer Law International 2018); S Vogenauer and J Kleinheisterkamp (eds), Commentary on the UNIDROIT Principles of International Commercial Contracts (2nd edn, OUP 2015); M Heidemann, Methodology of Uniform Contract Law: The UNIDROIT Principles in International Legal Doctrine and Practice (Springer Publishing 2007); T Kono, M Hiscock, and A Reich (eds), Transnational Commercial and Consumer Law: Current Trends in International Business Law (Springer Publishing 2018); see also observations by M Furmston, ‘A Study of Contract Law in the Major Commonwealth Jurisdictions’ (2014) 31 JCL 61, 65–66.

10  Fauvarque-Cosson, ‘The Contribution of European Jurists in the Field of European Contract Law’ in Mads Andnas and others (eds), Liber Amicorum Guido Alpa: National Private Law Systems (2007) 363, 368–69; see also O Lando and HG Beale (eds), Principles of European Contract Law (Kluwer International 2000); HG Collins, The European Civil Code: The Way Forward (CUP 2008).

11  Fauvarque-Cosson, ‘The Contribution of European Jurists in the Field of European Contract Law’ in Andnas and others (eds), Liber Amicorum Guido Alpa: National Private Law Systems, 363, 368–69.

12  H Eidenmüller and others, ‘The Common Frame of Reference for European Private Law—Policy Choices and Codification Problems’ (2008) 28 OJLS 659.

13  MacQueen, ‘Europeanisation of Contract Law and the Proposed Common European Sales Law’ in L DiMatteo and others (eds), Commercial Contract Law: Transatlantic Perspectives, ch 21; S Whittaker, ‘The Proposed “Common European Sales Law”: Legal Framework and the Agreement of the Parties’ (2012) 75 MLR 578; English Law Commission and Scottish Law Commission, ‘An Optional Common European Sales Law … Advice to the UK Government’ (2011) (<https://www.lawcom.gov.uk/project/common-european-sales-law/>).

14  JS Hobhouse, ‘International Conventions and Commercial Law: The Pursuit of Uniformity’ (1990) 106 LQR 530.

15  L DiMatteo, ‘Harmonization of International Sales Law’ in L DiMatteo and others (eds), Commercial Contract Law: Transatlantic Perspectives, ch 22; for details of ratifying nations, ibid, at fn 46; and in the same volume, D Saidov, ch 18.

16  J Braithwaite, ‘Standard Form Contracts as Transnational Law: Evidence from the Derivatives Markets’ (2012) 75 MLR 779, 801, citing Lomas v JFB Firth Rixson Inc [2010] EWHC 3372 (Ch), [2011] 2 BCLC 120 at [53]: ‘The ISDA [International Swaps and Derivatives Association] Master Agreement … is probably the most important standard market agreement used in the financial world… It is axiomatic that it should, as far as possible, be interpreted in a way that serves the objectives of clarity, certainty and predictability.’ (Briggs J’s decision was reversed, although not in respect of these remarks: [2012] EWCA Civ 419, [2012] 2 All ER (Comm) 1076). For another example, see on Petrologic Capital SA v Banque Cantonale De Genève [2012] EWHC 453 (Comm), [2012] ILPr 20, noting the Uniform Customs and Practice for Documentary Credits (UCP) (a set of rules on the issuance and use of letters of credit).

17  The literature is extensive: see J Braithwaite, ‘Standard Form Contracts as Transnational Law: Evidence from the Derivatives Markets’, fnn 1–33, citing, notably, Lord Mustill, ‘The New Lex Mercatoria: The First Twenty-five Years’ (1988) 4 Arbitration International 86 (a sceptic); K Berger, The Creeping Codification of the New Lex Mercatoria (2nd edn, Kluwer Publishing 2010); see also B Goldman, ‘The Applicable Law: General Principles of Law—The Lex Mercatoria’ in JDM Lew (ed), Contemporary Problems in International Arbitration (Martinus Nijhoff Publishing 1987) 113. Naturally, there are sceptics and enthusiasts, romantics and pragmatists.

18  L DiMatteo and others (eds), Commercial Contract Law: Transatlantic Perspectives, ch 20 (by Q Zhou) and ch 21 (by H MacQueen); C Twigg-Flesner, The Europeanisation of Contract Law (2nd edn, Routledge-Cavendish Publishing 2013); S Weatherill, ‘A Ever Tighter Grip: The European Court’s Pro-Consumer Interpretation of the EC’s Directives Affecting Consumer Law’ in Liber Amicorum Guido Alpa: National Private Law Systems, 1037; S Whittaker, ‘A Framework of Principle for European Contract Law’ (2009) 125 LQR 617; and see the EU consumer literature collected in P Cartwright, ‘Under Pressure: Regulating Aggressive Commercial Practices in the UK’ [2011] LMCLQ 123 at beginning of the article.

19  AS Burrows, Understanding the Law of Obligations (Hart Publishing 1998) chs 1, 2, and 8.

20  [1995] 2 AC 145.

21  Nykredit Mortgage Bank plc v Edward Erdman Group (No 2) [1997] 1 WLR 1627, 1630 (HL),

22  J Cartwright, ‘Liability in Tort for Pre-Contractual Non-Disclosure’ in AS Burrows and E Peel (eds), Contract Formation and Parties (OUP 2010).

23  T Baloch, Unjust Enrichment and Contract (Hart Publishing 2009); AS Burrows, The Law of Restitution (3rd edn, OUP 2011); AS Burrows, A Restatement of the English Law of Unjust Enrichment (OUP 2012); Goff and Jones, The Law of Unjust Enrichment (C Mitchell, P Mitchell, and S Watterson eds, 9th edn, Sweet and Maxwell 2016); G Virgo, The Principles of the Law of Restitution (3rd edn, OUP 2015).

24  [2001] 1 AC 268 (HL).

25  Chitty on Contracts (HG Beale gen ed, 33rd edn, Sweet and Maxwell 2018) 1-102 to 1-107.

26  [2012] UKSC 63, [2013] 1 AC 523.

27  ibid, at [97].

28  [1976] QB 44, 71 (CA); for extensive discussion of facets of the general law of contract within the present context in MG Bridge (ed), Benjamin’s Sale of Goods (11th edn, Sweet and Maxwell 2020) ch 2, section 1, and ch 3.

29  [1981] AC 675 (HL); similarly, the leading case on contractual damages concerned an agreement to grant a lease, Robinson v Harman (1848) 1 Exch R 850; 154 ER 363 and the leading case on implied terms of law concerned a tenancy, Liverpool City Council v Irwin [1977] AC 239.)

30  [1981] AC 675, 701.

31  ibid, 713; 717.

32  ibid, 717.

33  [2002] 1 AC 185, 196–8 (HL). On this point see also Golstein v Bishop [2014] EWCA Civ 10, [2014] Ch 455; affirming [2013] EWHC 881 (Ch), [2014] Ch 131 at [116] to [120] (Nugee QC); the latter adopted Neuberger J in Mullins v Laughton [2002] EWHC 2761 (Ch), [2003] Ch 250; and, in the context of LLPs, see the same conclusion of Henderson J in Flanagan v Liontrust Investment Partners LLP [2015] EWHC 2171 (Ch), [2015] Bus LR 1172, [2016] 1 BCLC 177 at [218] to [243].

34  Having been fashioned by the House of Lords in Linden Gardens Trust v Lenesta Sludge Disposals [1994] 1 AC 85, by way of extension from the original context of contracts for the carriage of goods (Dunlop v Lambert (1839) 6 Cl & F 600, HL).

35  D Brodie, ‘The Autonomy of the Common Law of the Contract of Employment from the General Law of Contract’ in M Freedland (ed), The Contract of Employment (OUP 2016) ch 6.

36  [2019] UKSC 32, [2020] AC 154 1223.

37  Founded on Attwood v Lamont [1920] 3 KB 571 (CA), which the Tillmann case has overruled.

38  [2016] UKSC 48, [2017] AC 142.

39  Noting Cook v Wright (1861) 1 B & S 559; Callisher v Bischoffsheim (1870) LR 5 QB 449 (Court of Queen’s Bench); Miles v NZ Alford Estate (1886) 32 Ch D 266 (CA).

40  Volume 2 of Chitty (2018) contains details of: Arbitration; Bailment; Bills of Exchange and Banking; Carriage by Air; Carriage by Land [no doubt for reasons of space, the contract of carriage by sea is omitted: on that topic see, FD Rose, ‘Carriage of Goods by Sea’ in AS Burrows (ed), English Private Law (3rd edn, OUP 2013) ch 11]; Construction (viz, Building) Contracts; Consumer Contracts; Credit and Security; Employment; Gambling Contracts; Insurance; Restrictive Agreements and Competition; Sale of Goods; Suretyship (viz, contracts of guarantee).

41  Besides Bibliography, Part II, section (16), see PBH Birks, ‘Equity in the Modern Law: An Exercise in Taxonomy’ (1996) 26 Western Australia LR 1, at 52–66 (<http://www.austlii.edu.au/au/journals/UWALawRw/1996/1.html>); AS Burrows, ‘We Do This at Common Law but that in Equity’ (2002) 22 OJLS 1; P Devonshire and R Havelock (eds), The Impact of Equity and Restitution in Commerce (Hart Publishing 2018); J Glister and J Lee (eds), Hanbury & Martin: Modern Equity (21st edn, Sweet and Maxwell 2018) ch 1; L Maniscalco, Concepts of Equity in Early Modern Legal Scholarship (Brill Publishing 2020); FW Maitland, Equity (J Brunyate ed) (CUP 1936); P Ridge, ‘Modern Equity: Revolution or Renewal from Within?’ in S Worthington, A Robertson, and G Virgo (eds), Revolution and Evolution in Private Law (Hart Publishing 2018) ch 12; Andrew Tettenborn, ‘Of Debts, Damages and Errant Trustees’ in S Degeling, J Edelman, and J Goudkamp (eds), Contract in Commercial Law (Thomson Reuters 2016) ch 13; Sir Geoffrey Vos, ‘Contractual Interpretation: Do Judges Sometimes Say One Thing and Do Another?’ (2017) 23 Canterbury L Rev 1, 13, noting the different professional background of Commercial Court and Chancery judges (‘The common law and commercial judges have always taken a harder line on the construction of written contracts, holding commercial men to their bargains. But yet, they are sometimes softer when it comes to equitable remedies than those more familiar with them.’). S Waddams, ‘Equity in English Contract Law: the Impact of the Judicature Acts (1873–75)’ (2012) 33 Journal of Legal History 185; SM Waddams, ‘Good Faith, Good Conscience, and the Taking of Unfair Advantage’ in A Dyson, J Goudkamp, and F Wilmot-Smith (eds), Defences in Contract (Hart 2017) ch 4 (and noting, ibid, 86, the connection between good faith and equitable concepts of fair dealing, and citing M Hesselink, ‘The Concept of Good Faith’ in A Hartkamp and C Bar (eds), Towards a European Civil Code (4th edn, Kluwer Law International BV 2010) 648); S Worthington, Equity (Clarendon Press 2003).

42  For judicial regrets that Equity has not retreated from general contract law, United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL) 924–25, Lord Diplock; 944–45, Lord Simon, 957–58, Lord Fraser.

43  Attorney-General v Blake [2001] 1 AC 268 (HL).

44  cf in UBS AG v Rose Capital Ventures Ltd [2018] EWHC 3137 (Ch), [2019] 2 BCLC 47 at [49] to [58], Chief Master Marsh noted that the secured lender’s discretion whether to call in a loan was subject only to the duty of good faith which Equity imposes within the mortgagor/mortgagee relationship.

45  On which One-Step Support Ltd v Morris-Garner [2018] UKSC 20, [2019] AC 649 at [62], [63] (Lord Reed), [112] to [114] (Lord Sumption).

46  Pitt v Holt [2013] UKSC 26, [2013] 2 AC 108; explained by Morgan J in Van der Merwe v Goldman [2016] EWHC 790 (Ch).

47  The old line of Equitable authority seems to have become comatose: Williams v Bayley (1866) LR 1 HL 200; classified by Lord Denning MR, in Lloyd’s Bank Ltd v Bundy [1975] QB 326, 338 (CA), as a case of ‘undue pressure’, citing Lord Westbury, (1866) LR 1 HL 200, 218–19; P Winder (1939) 3 MLR 97, 110 ff and (1962) 82 LQR 165; Kaufman v Gerson [1904] 1 KB 591 (CA); Mutual Finance Ltd v Wetton & Sons Ltd [1939] 2 KB 389, Porter J; but note, in the context of promissory estoppel, D & C Builders v Rees [1966] 2 QB 617, 625 (CA) (Lord Denning MR) (‘clean hands’ concept).

48  Bank of Credit & Commerce International SA (in liquidation) [2001] UKHL 8, [2002] 1 AC 251 at [17].

49  Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 (PC); see also Chitty (2018) 1-045, noting, in particular, remarks by Lord Hoffmann in the Union Eagle case, 518, and Lords Scott and Walker in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752 at [16] and [81].

50  MG Bridge, ‘Innocent Misrepresentation in Contract’ [2004] CLP 277.

52  In the United States, the fact that the remedy of injunction is ‘equitable’ places a claim for such relief outside the constitutional guarantee of jury trial: G Hazard and M Taruffo, American Civil Procedure (Yale University Press 1993) 130.

53  M Furmston (ed), Cheshire, Fifoot, and Furmston’s Law of Contract (17th edn, OUP 2017) 40–42.

54  Blindley Heath Investments Ltd v Bass (also known as Dixon v Blindley Heath Investments Ltd) [2015] EWCA Civ 1023, [2017] Ch 389 at [92].

55  [2019] UKSC 4I, [2020] AC 129; noted, Paul S Davies [2019] CLJ 267; T Pilkington and J Eldridge (2019) 135 LQR 526; JL Yap (2020) 31 ICCLR 81.

56  [2001] EWCA Civ 1447, [2002] 1 WLR 1192. By contrast, no such contract was found in Tod v Swim Wales [2018] EWHC 665 (QB), Choudhury J (at [102] distinguishing the Modahl case, and at [79] considering factors articulated in Heis v MF Global UK Services Ltd (in administration) [2016] EWCA Civ 569, [2016] Pens LR 225 at [32], Vos LJ). Nor was an implied contract found in Bony v Kacou [2017] EWHC 2146 (Ch); nor in Baird Textile Holdings Ltd v Marks and Spencer plc [2001] EWCA Civ 274, [2002] 1 All ER (Comm) 737.

57  GDE llc v Anglia Autoflow Ltd [2020] EWHC 105 (Comm), [2020] 1 WLR 2381, notably at [155] (Julia Dias QC) (concluding that the facts did not support the inference of such a tacit consent).

58  The complicated case law is considered in Andrews on Civil Processes (2nd edn, Intersentia Publishing 2019) 33.18 ff.

59  [1993] Lexis Citation 3095; The Times, 16 December 1993 (CA).

60  The nature of consensus in that context was carefully analysed by the Court of Appeal in FSHC Group Holdings Ltd v GLAS Trust Corporation Ltd (Rev 1) [2019] EWCA Civ 1361, [2020] Ch 365.

61  AWB Simpson, ‘Innovation in Nineteenth Century Contract Law’ (1975) 91 LQR 247.

62  [2001] 1 AC 268 (HL).

63  For detailed examination of contractual innovation and developments, Neil Andrews, ‘Innovation in the Law of Contract and Civil Justice’ (Jacobson lecture, Israel) Part 1, (2015) Lis International 99–103; Part 2, (2016) Lis International 132–41.

64  [1950] 1 KB 671 (CA).

65  [1932] AC 161 (HL).

66  (1867) LR 2 HL 149.

67  [1975] QB 326 (CA).

68  It was firmly rejected by a House of Lords led by Lord Scarman in National Westminster Bank v Morgan [1985] AC 686, 708; and Dillon LJ commented in Alec Lobb Garages Ltd v Total Oil Great Britain Ltd [1985] 1 WLR 173, 183: ‘inequality of bargaining power must … be a relative concept. It is seldom in any negotiation that the bargaining powers of the parties are absolutely equal.’

69  Transfield Shipping Inc v Mercator (‘The Achilleas’) [2008] UKHL 48, [2009] 1 AC 61.

70  [2009] UKPC 10, [2009] 2 All ER 1127, notably at [21].