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Oxford Law Citator

Part III Formation of the Contract, 9 General Remarks on Contract Formation

From: Global Sales and Contract Law (2nd Edition)

Ingeborg Schwenzer, Edgardo Muñoz

Content type:: Book content

Product:: International Commercial Law [ICML]

Published in print:: 14 June 2022

ISBN:: 9780198871255

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Subject(s):: Formation of contract — Contract formation and trade practices

(p. 133) 9 General Remarks on Contract Formation

1. A. General 9.01
2. B. Cause and Consideration 9.03
  1. I. General 9.03
  2. II. Cause 9.06
    1. 1. Equivalence of Performance and Counter-Performance 9.09
    2. 2. Illicit Cause 9.11
  3. III. Consideration 9.13
    1. 1. General Remarks about Consideration 9.13
    2. 2. Value 9.18
    3. 3. Provided by the Promisee 9.25
  4. IV. Judicial Control of Contract Terms 9.26

A. General

9.01 Traditionally, and still the case in virtually all domestic legal systems, sales law is treated as a specialized subset of contract law. As a consequence matters of formation which apply to contracts generally are usually found in different parts or even different pieces of legislation. In civil codes and codes of obligations the rules on formation are typically found in the general law of obligations or even in an individual section. In common law legal systems the majority approach is to apply common law to general questions of contract such as formation while all common law jurisdictions have specific legislation governing sales contracts. Some common law jurisdictions as well as the Nordic systems have established separate Acts on formation and sales law respectively. An exception from the general rule at the domestic level is the USA UCC.

9.02 At the international level the CISG¹ and the OHADA AUDCG both deal with issues of formation as well as establishing specific sales law provisions. Previous unified sales law, however, had indeed reflected the traditional dichotomy at the domestic level. Thus, two separate conventions were codified—ULF and ULIS.

(p. 134) B. Cause and Consideration

I. General

9.03 In addition to the nudum pactum, that is the mere consensus between the contracting parties, many legal systems require a further element. In common law legal systems this is consideration and in civil law legal systems belonging to the French legal tradition, as it was provided in the Civil Code of 1804, it is cause. These concepts are used for a variety of legal operations. These include the indication of seriousness as well as the invalidation of contracts violating statutory prohibitions or public morals. Furthermore, they may serve as an instrument for judicial control over contract terms. However, cause as an element of contract formation in the former Article 1108 of the French Civil Code was removed and replaced with the requirements of but and contrepartie and legality by the 2016 Civil Code reform.²

9.04 Legal systems with a Germanic background as well as the Nordic legal systems are familiar with neither the concept of consideration nor with that of cause. The same applies to Israel and Guatemala.³ Also, the specific case of Japan, despite not containing a requirement of cause or consideration, provides parties with ways to demonstrate their seriousness in entering into agreements, for instance, by stating that when the buyer pays earnest money to the seller, the buyer may cancel the contract by forfeiting the earnest money, or the seller may cancel the contract by reimbursing twice its amount; until either party commences performance of the contract.⁴

9.05 At the international level uniform law and projects have likewise not adopted the concepts of consideration and cause.

II. Cause

9.06 The cause doctrine used to be one of the pillars of the French tradition of private law.⁵ Indeed, cause must exist for an enforceable contract. This concept has found its way into a great number of civil codes based on French tradition in Europe,⁶ Latin America,⁷ Africa,⁸ as well as in Middle Eastern and Arab legal systems.⁹ In North America the Louisiana Civil Code¹⁰ and (p. 135) Québec Civil Code¹¹ explicitly refer to the concept of cause. In Asia, it has only been seen in the law of Indonesia and the Philippines.¹²

9.07 The term cause has, however, itself generated a long-standing debate on its meaning and the functions of the concept. Historically, with respect to reciprocal contracts, cause had long been defined as the expected counter-performance (contrepartie), and sometimes, more broadly, as the ‘reciprocal commitment’ (l’engagement réciproque).¹³ In this respect it resembles the common law concept of consideration.¹⁴

9.08 As discussed below, cause remains a very vital concept in several legal systems belonging to the French tradition, even with the recent French reform.¹⁵ It has proven to be a flexible instrument useful when adjusting the law of contract to changing values of society be those re-emerging religious notions or in other places an effective control of contract terms, either in addition to existing devices or to fill gaps in this regard.

1. Equivalence of Performance and Counter-Performance

9.09 In general, the concept of cause does not relate to the quantitative equivalence of performance and counter-performance and has to be distinguished from gross disparity (lésion) and the concept of economic duress, which was expressly added in new Article 1143 of the French Civil Code.¹⁶ Currently, the concept of cause has been suppressed, nonetheless, its functions are ‘supposed to have remained intact’.¹⁷ In that line of thought, French case law asserts that contracts providing for non-equivalent counter-performances are enforceable, if any counter-performance is stipulated at all.¹⁸ However, French courts have also held that there is no cause where the counter-performance exists yet it is of a manifestly trivial nature (contrepartie manifestement dérisoire).¹⁹

9.10 In cases of related contracts one contract may be regarded as cause for the other contract, if this is necessary to protect the interests of one party.²⁰ This may even be the case where it is the purpose of a contract to enter into further contracts with third parties in the future and the achievement of this purpose is impossible.²¹

(p. 136) 2. Illicit Cause

9.11 One of the main fields of application was and still is that cause itself is not enough but that it must be a licit cause to be the basis for an enforceable contract. It is therefore an instrument to render contracts void which violate statutory prohibitions or public morals.²² There are, however, significant differences among legal systems employing the concept of cause when it comes to determining illegality including immorality. More precisely, the relevant factors to be taken into account differ with the respective understanding of this concept.

9.12 All legal systems employing the concept of cause have traditionally distinguished three classes of cause: Impulsive cause, efficient cause, and final cause. Those legal systems still adhering to this distinction put primary emphasis on the final cause. This is understood to be the abstract goal set out by the specific type of contract to be concluded. In a contract of sale this goal is the delivery of the goods and transfer of title against payment of the purchase price. This can be called an ‘objective cause’ as opposed to a ‘subjective cause’ drawing on the intention of the parties. This approach was taken by France²³ and is still taken in African²⁴ and Latin American²⁵ legal systems. The ‘subjective cause’ is now to be found in Middle Eastern and Arab countries where the focus has recently shifted to the motivation of the parties. Contract theory and a number of civil codes in this area define cause as the driving motive for the obligor to enter into the contract.²⁶ This subjective test is first attenuated by the fact that a contract is only considered void, if the other party has knowledge of the illicit intention of its counter-party.²⁷ Secondly, there is a presumption that a contract contains a lawful benefit unless there is evidence to the contrary.²⁸ How the concept is applied in practice to render the (p. 137) contract void to a great extent depends on the role and interpretation of Islamic rules in the individual Middle Eastern and Arab countries.

III. Consideration

1. General Remarks about Consideration

9.13 Consideration is an essential²⁹ and yet at times paradoxical³⁰ part of the common law notion of contract. It is a complex topic which demands entire monographs of its own. The discussion of consideration in this text is a broad overview, and addresses those issues which are most relevant to a sales contract.

9.14 As a practical outcome the common law will not enforce a contract lacking consideration, and conversely an agreement which has consideration will be presumptively enforced. However, as consideration (or lack thereof) is a substantive requirement, it is more accurate to describe it as a matter of validity rather than one of enforceability.³¹

9.15 At its simplest the traditional understanding of consideration can be described as something of value exchanged for the promise of another. This simple definition however belies the complexities of the doctrine and its consequences. For example, the notion of value traditionally conjures up questions of benefit and detriment. Indeed, virtually all common law jurisdictions apply a benefit and detriment analysis to discover the presence of consideration. The exception is the USA, where even in the 1930s, there was a shift away from notions of benefit and detriment.³² There the question is whether or not something has been exchanged as a result of a bargain.³³ However, while there are differences between this and the traditional approach,³⁴ for the present brief discussion, those differences are not particularly significant.³⁵

9.16 A number of classic differences between the common law and the civil law can be attributed at least in part to the doctrine of consideration. For example, offers in the common law are generally revocable.³⁶ Traditionally, it is only when consideration is provided for the promise to keep an offer open that it becomes irrevocable.³⁷ The differing approaches to gross disparity also arguably stem from the consideration doctrine.³⁸

9.17 The origins of the consideration doctrine have been considered at length by many scholars.³⁹ In a very general sense, there appear to be three possible theories, or any combination of them, for the emergence of the consideration requirement. The first ties the introduction of consideration to the development of assumpsit.⁴⁰ The second suggests consideration was found in the law of uses before it emerged in the law of assumpsit.⁴¹ Finally, a third theory is that early judges were influenced by the notion of ‘causa’ in canon law.⁴² Although the doctrine of (p. 138) consideration, and the need for it at all, has been the subject of much criticism (academic and judicial) for many years,⁴³ it remains an issue regularly relied on by courts.

2. Value

9.18 In the traditional understanding, consideration must have value and it is often said that it must have ‘value in the eyes of the law’.⁴⁴ This has led some to suggest that the purported consideration must therefore be capable of ‘estimation in terms of economic or monetary value’,⁴⁵ although others have criticized the economic value analysis.⁴⁶ As noted above,⁴⁷ consideration, as it is known in the USA, is no longer spoken of in terms of value. However, it is clear that both the traditional and the USA approach require essentially the same thing. Whatever has been extracted from the co-contractant must have some real value to the party that has bargained for it—even if only nominal.⁴⁸ This view is supported by the fact that neither approach accepts illusory consideration⁴⁹—albeit arguably for different reasons. In the traditional understanding illusory consideration has no value, whereas in the USA it suggests there was not in fact a bargain.

(a) Need Not Be Adequate but Must Be Sufficient

9.19 As a general proposition, the common law will not investigate the substantive equality of a transaction,⁵⁰ and thus the traditional view of the value of consideration is that it needs only to be sufficient and not necessarily adequate.⁵¹ In other words it is not for the law to judge whether the price promised for a good is too much or too little, simply that a promise to pay exists.

9.20 Traditional consideration will generally be sufficient where there is either some detriment to the promisee or benefit to the promisor—the promisee suffers a detriment by giving away something of value, and the promisor obtains a benefit by gaining something of value. Traditionally, it was thought that the benefit or detriment must be a legal one. In this context the distinction is not between legal and illegal—although a contract with a purported illegal consideration would face validity issues for other reasons⁵²—but rather the conferral of a benefit or detriment that is not already the subject of a legal obligation.⁵³ This is sometimes referred to as the ‘pre-existing duty’ rule.⁵⁴

9.21 More recently jurisdictions employing the traditional view of consideration have begun to recognize factual as distinct from legal benefit and detriment.⁵⁵ This has arisen particularly in situations involving contract amendments, and is discussed in more detail in Chapter 14.⁵⁶

(b) Examples of Consideration

(p. 139) 9.22 In most sales of goods situations the identification of consideration will be a relatively easy task. It has long been recognized that mutual promises to perform—that is of the seller to deliver and the buyer to pay the purchase price—will, respectively, amount to the necessary consideration to form a sales contract.⁵⁷ Other examples of consideration, although typically less relevant to the sales contract context, include the promise not to sue,⁵⁸ a bona fide compromise of a disputed claim,⁵⁹ the acknowledgement of a statute-barred debt,⁶⁰ or the conferral of a practical benefit.⁶¹

(c) Past Consideration

9.23 It is often said that ‘past consideration is no consideration’.⁶² There are several ways in which this proposition can be explained. The first is that consideration must be given in return for the promise. If the consideration had already been given, or given independently,⁶³ then it would not appear to have this reciprocity character.⁶⁴ However, a second way to consider the proposition is that past consideration does not have sufficient value. The promisor gains nothing from past consideration; that is either the promisor will already have obtained the benefit on offer, or the promisee will have already suffered the proposed detriment. This latter analysis is useful because it neatly accommodates the traditional ‘pre-existing duty’ rule as well as its more recent developments.⁶⁵

9.24 The question of whether the alleged consideration is ‘past consideration’ is a matter to be determined by looking at all the circumstances. It is not simply a question of chronology.⁶⁶

3. Provided by the Promisee

9.25 The reciprocal nature of consideration requires that it be provided by the promisee. In most cases this will be a detriment which the promisee incurs. Where such a detriment can be identified a corresponding benefit to the promisor is not necessary. The expression often used to describe this rule is that ‘consideration need not move to the promisor’.⁶⁷ As a consequence there would be good consideration where the promisee, at the direction of the promisor, provides a benefit to a third party. However, it is not always necessary that the promisee incur detriment to itself. As the doctrine has developed, particularly in the context of the pre-existing (p. 140) duty rules, it is evident that simply bestowing a benefit upon the promisor is sufficient.⁶⁸ Further, to protect third parties’ rights arising out of the privity of contract, some jurisdictions following the English model, such as Hong Kong, have abolished this doctrine, allowing consideration to be provided by a party other than the promisee.⁶⁹

IV. Judicial Control of Contract Terms

9.26 Both consideration and cause have been used as instruments of judicial control over contract terms.⁷⁰

9.27 It is clear that judicial control was behind the veritable renaissance of the concept of cause in France during the 1990s. In the landmark Chronopost case⁷¹ the French Supreme Court relied on Article 1131 CC to strike down limitation of liability clauses in B2B contracts thereby reaching results otherwise only achievable under rules protecting consumers against unfair contract terms. The rationale was that the limitation of liability contradicted the essential obligation under the contract so as to effectively eliminate the underlying cause of the contract. However, this article has been derogated by the 2016 contract law reform in France.

9.28 Similar observations can be made of the doctrine of consideration. The common law courts have at times described consideration as ‘illusory’ and in doing so protected parties from exclusion of liability clauses.⁷² Furthermore the steadfast requirement of consideration for the modification of a contract arguably has its genesis in courts protecting weaker parties from inequitable and unilateral changes.⁷³

Footnotes:

¹ It must naturally be noted that Part II of the CISG (Arts 14–24) which deals with the formation of contracts does not have to be ratified by contracting states (Art 92). This reservation was created upon the wish of the Nordic legal systems. Accordingly, to date only Dnk, Fin, Nor, and Swe have declared a reservation under Art 92 CISG and it is rumoured that first steps have been taken to withdraw the reservation. Isl has made a reservation under Art 94 CISG which allows for states to not be bound by provisions of the CISG where they have the same or closely related legal rules on sales contracts or their formation. See on this reservation Schlechtriem/Schwenzer/Schwenzer/Hachem, Art 92, para 3.

² See Fra Arts 1162, 1169 CC, Chénedé para 23.271.

³ See Gtm Art 1251 CC, Salazar, pp 156–57.

⁴ See Jpn Art 557 CC, Sono, H et al, p 57, para 93.

⁵ See para 9.03, Fra under former Art 1108 CC: ‘Quatre conditions sont essentielles pour la validité d’une convention: Le consentement de la partie qui s’oblige; Sa capacité de contracter; Un objet certain qui forme la matière de l’engagement; Une cause licite dans l’obligation.’ However, this article was abolished and the current conditions required by French law under Art 1128 CC are: consent, capacity to contract, and that the contract has lawful and certain content, Rowan p 10.

⁶ Bel Art 1108 CC; Esp Art 1261 CC; Ita Art 1325 CC; Lux Art 1108 CC; Rom Arts 1179 (1)(4), 1235–39 CC.

⁷ Arg Art 1013 CCC, Caramelo, pp 410, 411, different from the previous regulation, cause is now considered an essential element of the contract; Bol Art 452 CC; Bra Art 166 CC; Cub Art 23 CC; Hnd Art 1552 CC; Pan Art 1112 CC; Per Art 140(3) CC, Supreme Court, Sala Civil permanente, Cassation 003657-2012, 1 December 2014, para 3.3; Ury Art 1261CC; Ven Art 1.141 CC.

⁸ Ben Art 1108 CC; Bfa Art 1108 CC; Civ Art 1108 CC; Cmr Art 1108 CC; Caf Art 1108 CC; Cog Art 1108 CC; Gab Art 1108 CC; Gin Art 1108 CC; Mdg Art 1108 CC; Mli Art 1108 CC; Ner Art 1108 CC; Sen Art 47 CO; Tcd Art 1108 CC; Tgo Art 1108 CC.

⁹ Afg Arts 592, 593 CC; Bhr Art 111 CC; Irn Art 217 CC; Jor Art 165(2) CC; Kwt Art 177 CC; Lbn Art 196 CO; Lby Art 136 CC; Mar Arts 62, 63 CO; Safi, Al Qanun Al Madani, p 451; Qat Art 155(1) CC; Syr Art 137 CC; Tun Arts 67, 68 CO. This is no longer the case for Egy, where the current practice states that the omission of stating the cause of an obligation does not render it invalid, see Egy Art 137 CC, Cass Civ, challenge no 4502, session dated 18 February 2016, JY 68.

¹⁰ USA (La) Arts 1887 et seq CC.

¹¹ Can (Qué) Art 1485 CC.

¹² Idn Bell, Formation of Contract, p 373, Arts 1320, 1335 CC; Phl de Leon, p 633.

¹³ Fra Art 1169 CC, see eg Civ 1, 25 May 1988, Bull civ I, no 149: ‘la cause des obligations d’une partie réside, lorsque le contrat est synallagmatique, dans l’obligation de l’autre’; see also Civ 1, 7 February 1990, no 88-18.441, Bull civ I, no 38, Defrénois 1990, art 34837.1018, note Aubert): ‘lorsque l’obligation d’une partie est dépourvue d’objet, l’engagement du cocontractant est nul faute de cause’. cf also Drobnig, General Principles of European Contract Law, p 314.

¹⁴ See paras 9.13 et seq.

¹⁵ See para 9.03

¹⁶ See Fra Art 1143 CC, Colaiuta, p 38, since this new provision now refers to cases where a party’s consent to enter into an agreement is impaired by economic duress, which existed already in French case law.

¹⁷ Fra Downe, p 52.

¹⁸ Fra Art 1143 CC; see Civ 1, 4 July 1995, no 93-16.198, Bull civ I, no 303, Contrats, conc, consom 1995, comm 181, note L Leveneur, RTD civ 1995.881, obs J Mestre, held valid a contract for the sale of a jewel for a price of 101 556 F, whereas the real price was 460 419 (former article).

¹⁹ Fra Art 1143 CC, see Civ 3, 7 February 1996, no 93-17.873, RTD civ 1996.606, obs J Mestre; Civ 1, 14 October 1997, no 95-14.285, Defrénois 1998, art 36860.1041, obs D Mazeaud, held that in the case of an agreement between a supplier and a reseller on an exclusive basis, the benefit for the reseller seemed trivial (‘dérisoire’) (former article); Beale et al, p 137.

²⁰ Following the Chronopost ruling, the Cour de Cassation considered that the lease back and the advertising agreement, were part of a contractual whole and were interdependent, notwithstanding a term to the contrary, and held as a result, that the termination of the lease back caused the advertising agreement to terminate (Cass Com, 15 February 2000, no 97-19-793, Bull civ IV, no 29) The loan and sale, being connected and having one single cause, it was held that the termination of the sale resulted in the termination—in this case, the caducity—of the loan (Civ 1, 1 July 1997, no 95-15642).

²¹ Civ 1, 3 July 1996, D 1997.499 with note P Reigne.

²² See Latin America Hionestrosa, pp 212, 213; Afg Art 592 CC; Are Art 207(2) CC; Arg Art 1014 CCC; Bhr Art 111 CC; Bol Supreme Court, Felipe Orozco Cabrera v Hugo Aguirre Calderón y María Paz Villalba de Aguirre, reported by Muñoz, p 84, fn 32; Bra Art 166(3) CC; Chl Art 1467 CC; Col Art 1524 CC; Dza Art 97 CC; Ecu Art 1483 CC; Egy Art 136 CC; Esp Art 1.275 CC; Gtm Art 1301 CC (object as cause); Hnd Art 1570 CC; Idn Bell, Formation of Contract, p 373, Arts 1320, 1335, 1337 CC; Irn Art 132(1) CC; Jor Art 165(2) CC; Lbn Art 198 CO; Mar Art 62 CO; Nic Art 1874 CC; Pan Art 1126 CC; Qat Art 155(1) CC; Rom Art 1236–37 CC (what counts as illicit or immoral cause) and Art 1238 CC (sanction); Slv Art 1338 CC, Second Civil Chamber, First Section, San Salvador, Mr JAVB v Mr VB, case N° 45-3CM-17-A, 9 October 2017; Syr Arts 136, 137 CC; Tun Art 67 CO; Ury Art 1288 CC; Yem Art 195 CC.

²³ French case law used to follow an objective approach, with courts assessing whether the obligation has a cause corresponding to the type of contract concerned, this by using different methods (looking at the subject matter, the objective interest in performing the contract, the coherence, the essential elements or fundamental obligation of the contract). Yet this approach was only fit for standard contracts (contrat nommé) such as sale. Where the contract is not a contrat nommé or where the objective cause is not immediately apparent, courts came to search the motives of the parties, to the extent that they were made part of the contract. Under this ‘subjectivation of the objective cause’, courts verify the existence of a cause having regard to the general economy of the contract (économie générale du contrat), drawing on what the parties intended, expressly or implicitly, to regard as cause. Furthermore, the French Civil Code no longer requires a lawful cause, instead, Art 1128 CC establishes that a contract is valid if its content is lawful, having regard to a subjective and objective approach, see Cass Civ 1, 7 October 1998, no 96-14359, Méndez Sierra, p 4.

²⁴ Penda Matipé, pp 66 ff.

²⁵ Latin America Hionestrosa, p 213.

²⁶ Arabic/Middle East (Egy) Al Sanhuri/Al Maraghy, pp 164–5; Afg Art 591 CC; Are Art 207(1) CC; Dza Filaly, Al Nazria Al Ama Lil Aqd, pp 190–1, 197–9; Jor Art 165(1) CC; Mansour, pp 134–6; Kwt Art 176 CC; Abdel Reda/Al Nakas, p 117; Mar Safi, Al Qanun Al Madani, pp 445, 448–9; Qat Art 155(2) CC.

²⁷ See Fra Art 1128, 1162 CC, in the same line of thought, in French case law: a contract is voidable for illicit or immoral cause even where one party did not have knowledge of the illicit or immoral character of the motive essential for the conclusion of the contract (Civ 1, 7 October 1998, Bull civ I, no 285) (former article); also Rom Art 1238(2) CC, where an illicit or immoral cause results in absolute nullity of the contract where the other party should have been aware of it.

²⁸ See Afg Art 594 CC; Bhr Art 112 CC; Dza Art 98 CC; Egy Art 137 CC; Irq Art 132(2), (3) CC; Jor Art 166(2) CC; Kwt Arts 177, 178 CC; Lbn Art 199 CO; Lby Art 137 CC; Mar Arts 64, 65 CO; Qat Arts 156, 157 CC, Qatari COC, challenge no 22, session dated 20 June 2006, Rom Art 1239 CC; TO, year 2, 2006, p 152; Syr Art 138 CC; Tun Arts 69, 70 CO; Yem Arts 195, 197 CC. See also Arabic/Middle East Hafez, p 66.

²⁹ See Aus The Laws of Australia/Davis, para 7.1.1190; Can Waddams, para 119: ‘something must be given’; Ind s 2 Contract Act (1872); USA § 17(1) Restatement (2d) of Contracts.

³⁰ See further Gordon, 75 Cornell L Rev (1989), 1002.

³¹ Aus Carter/Peden/Tolhurst, para 6-12.

³² See Farnsworth, vol I, §2.2 noting §75 Restatement (1st) of Contracts promulgated in 1933.

³³ USA § 71 Restatement (2d) of Contracts. See also Farnsworth, vol I, §2.2.

³⁴ See Farnsworth, vol I, §2.2 providing various examples.

³⁵ See Farnsworth, vol I, §2.11 noting that courts ‘have not lost the habit’ of using terms like valuable.

³⁶ The law does not as a rule investigate the respective value of the promises. For the value of consideration see paras 9.18 et seq.

³⁷ See paras 10.26 et seq.

³⁸ Consideration need not be adequate, see para 9.19.

³⁹ See eg Swain, J Leg Hist (2005), 55–72 (citing numerous references and discussion); see also Denning, Mod L Rev (1952), 1–10; Twyford, pp 8 ff. For the development of assumpsit see paras 41.36 et seq.

⁴⁰ See eg Milsom, p 357; see also Pollock, pp 183–4.

⁴¹ See eg Simpson, p 327.

⁴² See eg Milsom, p 357.

⁴³ See eg the discussion of Lord Mansfield’s attack on consideration in Burrows/Finn/Todd, para 4.1.2.

⁴⁴ Common Law (UK) Treitel on Contract, para 3-002 citing references; Chitty on Contracts, para 3-003 (citing references); Can Waddams, para 122 (criticizing use of the word ‘value’).

⁴⁵ Common Law (UK) Chitty on Contracts, para 3-022.

⁴⁶ Hkg Fisher/Greenwood, para 4.4.2 suggesting economic value is frequently stated as being required but questioning real need. See also Can Waddams, para 122 fn 309.

⁴⁷ See para 9.15

⁴⁸ Common Law (UK) Chitty on Contracts, paras 3-018 et seq; Aus The Laws of Australia/Davis, para 7.1.1260; Can Waddams, paras 175 et seq.

⁴⁹ Common Law (UK) Chitty on Contracts, para 3-023; Aus The Laws of Australia/Davis, para 7.1.1330.

⁵⁰ For gross disparity see paras 21.5 et seq.

⁵¹ Common Law (UK) Chitty on Contracts, paras 3-014 et seq; Can Waddams, para 123; Nzl Burrows/Finn/Todd, p 102, para 4.5.1; USA United States v Stump Home Specialties Manufacturing, US Ct App (7th Cir), 29 June 1990, 905 F 2d 1117.

⁵² See Ch 20.

⁵³ Common Law (UK) Chitty on Contracts, para 3-006.

⁵⁴ See paras 14.2 et seq.

⁵⁵ Eng Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 (CA); Aus Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 (NSWSC); Nzl Attorney-General for England and Wales v R [2002] 2 NZLR 91 (CA); Sgp Teo Seng Kee Bob v Arianecorp Ltd [2008] 3 SLR(R) 1114.

⁵⁶ See paras 14.15 et seq.

⁵⁷ Common Law (UK) Chitty on Contracts, para 3-008 (citing numerous case and scholarly references); Aus The Laws of Australia/Davis, para 7.1.1210; Can Waddams, para 122; USA Farnsworth, vol I, §2.4.

⁵⁸ Eng Crears v Hunter [1887] 19 QBD 341; Combe v Combe [1951] 2 KB 215; Aus Director of Public Prosecutions (Vic) v Le (2007) 240 ALR 204.

⁵⁹ Aus Wigan v Edwards (1973) 47 ALJR 586.

⁶⁰ Common Law (UK) Chitty on Contracts, para 3-035 (although specifically addressing the Eng and Wal s 29(5) Limitation Act (1980), the rule exists in the common law as well); Aus The Laws of Australia/Davis, para 7.1.1230; Nzl Casey v Commissioner of Inland Revenue (NZ) [1959] NZLR 1052 (SC); but see also USA Farnsworth, vol I, §2.8 suggesting in the USA this should be considered as ‘simply enforceable without consideration, at least as that term is understood under the bargain test’.

⁶¹ Eng Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 (CA); Aus Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723; Nzl Attorney-General for England and Wales v R [2002] 2 NZLR 91 (CA); Sgp Teo Seng Kee Bob v Arianecorp Ltd [2008] 3 SLR(R) 1114; Sea-Land Service Inc v Cheong Fook Chee Vincent [1994] 3 SLR 631. In this context see also paras 14.05 et seq.

⁶² Common Law (UK) Chitty on Contracts, para 3-026; Aus Hercules Motors Pty Ltd v Schubert (1953) 53 SR (NSW) 301 (NSWSC); Can Waddams, para 179; Irl Law Society of Ireland v O’Malley [1999] 1 IR 162; USA Farnsworth, vol I, §2.7.

⁶³ Common Law (UK) Chitty on Contracts, para 3-026.

⁶⁴ USA Farnsworth, vol I, §2.7

⁶⁵ In this context see also paras 14.02 et seq.

⁶⁶ Common Law (UK) Chitty on Contracts, para 3-027; Aus Breusch v Watts Development Division Pty Ltd (1987) 10 NSWLR 311 (NSWCA).

⁶⁷ Common Law (UK) Chitty on Contracts, para 3-039; Aus The Laws of Australia/Davis, para 7.1.1210; Can Waddams, para 122; USA § 71(4) Restatement (2d) of Contracts, Farnsworth, vol I, §2.3 (but not using benefit and detriment terminology).

⁶⁸ Common Law (UK) Chitty on Contracts, para 3-037; USA Farnsworth, vol I, §2.3 (but not using benefit and detriment terminology).

⁶⁹ Hkg s 4 Contracts (Rights of Third Parties) Ordinance (2016).

⁷⁰ For the modern treatment of unfair clauses see paras 21.34 et seq.

⁷¹ Cass Com, 22 October 1996, no 93-18.632, Bull civ IV, no 261, D 1997.121 with note A Sériaux (declared unenforceable a term limiting liability for delay since it negated the essential obligation of the express courier) (former Fra Art 1131CC).

⁷² DiMatteo, 33 New Eng L Rev (1999), 295.

⁷³ Waddams, 3 Erasmus L Rev (2010), 122.

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