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Part I Fundamentals, 2 Principles

From: Contract Law in Practice

Neil Andrews

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2022. All Rights Reserved.date: 11 August 2022

Subject(s):
Agency by estoppel — Breach of contract — Interpretation of contract — Contract clauses and damages

In this chapter six major principles are identified: freedom of contract; objectivity; the contractual bond principle (‘pacta sunt servanda’); estoppel; good faith and fair dealing; the compensation principle. The nature of each principle is explained and its operation within the law is illustrated and amplified. The first three of these principles are well-established, but it is of particular interest that the good faith principle is recognized here. The principle is manifested in various ways, which are identified. The estoppel principle is a long-standing but complex feature of English private law and its various forms are here explained. The compensation principle encapsulates the complex rules governing the award of damages for breach of contract. The aim of contractual damages is not to punish, nor to over-compensate, or award double compensation. The paradigm award of contractual damages is to place the innocent party in the position which would have existed if there had not been a breach.

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