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Published: Fri, 02 Feb 2018

The Scope Of The Law Of Contract

Commercial transactions are usually referred to as Commercial Law. These transactions are “basically concerned with the various aspects of law that regulate the relationship between different parties that enter into agreements.” (COURSE CODE: LAW 331http://www.nou.edu.ng/noun/NOUN_OCL/pdf/pdf2/LAW%20331.pdf) The law has many important aspects. Commercial Law pertains to all people who are somehow involved in a commercial transaction. This law has all rights to be regarded as a broadened aspect of Law of contract. This law cannot be brought into existence “without the presence of all the requirements for a valid contract.” (COURSE CODE: LAW 331http://www.nou.edu.ng/noun/NOUN_OCL/pdf/pdf2/LAW%20331.pdf) These requirements exist between persons and/or groups of persons.

It is sometimes difficult to define all areas which are covered by commercial law. In most parts of cases this law is difficult to define. In most part of cases this law covers rules which can be applied to all businesses. In most cases this law is not limited to contract, company law, agency, sale of goods, banking, intellectual property, competition law, taxation law, insurance law and hire purchase law.

Generally, the practice of commercial law is the area of human research which is influenced by the general. This context often prevails in England and other states. When to take a look at British context of this law we case see that there is no particular statute that regulates and guides the commercial law practices in Great Britain. In fact, this law regulates some particular aspects of state. At present, there is a whole list of important components of law. These components are combined together and make up what we currently call a commercial law.

Different statutes are used to regulate all aspects of state. These statutes make up what is currently called commercial law.

The scope of the law of contract

There are different forms of contracts. In fact contracts have their own shapes and sizes. Contracts take different forms and shapes, as well as sizes. Some contracts involve large sums of money, which others are designed for trivial sums. Some contracts last for a long time while others have a relatively short period of existence. The content of contracts varies depending on purpose of this or that contract.

Some interesting information regarding how the law of contracts is acting in UK can be found is some respectable research prepared by Pollock (1875) and Anson (1879) and other authors. An interesting discussion of topic can be found in works such as Treitel (2003), Anson (2002) and Cheshire, Fifoot and Furmston (2007).

Though approached differently, contracts are formulated in accordance with different principles. Recently, many of these principles have been challenged by Professor Atiyah (1986b). In the course of his research he pointed to the fact that many principle according to which contractual law is built remain to be general only by default. This is largely so because these rules are superseded by detailed ad hoc rules lacking any principle. Atiyah points to the fact that ‘there is no such thing as a typical contract at all’. The researcher pointed to importance of classical model of contract. However, he also pointed to the fact that there are other types of contracts. The classical model of contract is the most discrete, two-party, commercial, executor form of exchange of information.

There are different types of contracts. Some contracts are not discrete while others have a continuing effect on people. Some contracts are not discrete but continuing (landlord and tenant relationships), while others can be characterized as two-party contracts. Besides two-party contracts, there are multiparty contracts.

Contracts have different specialization:

the contract of membership in a club

commercial or domestic (marriage) contracts

executory (unperformed) contracts

executed (fully performed) fully performed contracts

Human actions often depends on the manner they exchange information. This is especially true in case of an enforceable unilateral gratuitous promise. The same idea has been once mentioned by Atiyah who concluded that people must should changes their focus and see contracts as something other than a monolithic phenomenon’.

Atiyah once used this argument to support of a wider proposition that contract law becomes an area which is increasingly merging with other areas of law such as tort law and general obligations of people. Many people agree with Atiyah’s wider proposition to accept the point mentioned in law. The resemblance between different types of contract was also mentioned in law. A contract of employment is a different form of contract.

Understanding of contract

Modern understanding of contractural law is a very complicated issue. This issue suggests that there should be a special understanding of modern issues. An important part of modern doctrine is presence of liberal individualism or laissez-faire philosophy. This philosophy is a standard contract which makes basis of a further process of capital accumulation and further aggregation.

A new form of capital aggregation is the process that has enabled powerful contracting parties to impose contractual terms both on their consumers and on other, weaker parties.

Recently, the courts and Parliament were reported to make a radical decision to place greater limits upon the exercise of contractual power. A final result of this process was the fact that modern legislation went so far as to introduce a special form of contract regulation. This regulation was imposed on both employment contracts and consumer credit contracts. These contracts were successfully used both by employees and consumers who are trying to protect individual rights of people.

There are no ways to explain laissez-faire ideology in terms of modern legislation. The expression is used to mark two important doctrine – that of duress and that of undue influence. This recent form of contract is used as a special form of a new form of exclusion regulation.

Conceptions of fairness are one more important thing that deserves particular consideration (Chapter 17). This new notion is used to mark human departure from former norms of morality. Recently, departure led many people to come to conclusion that altruism should become then main ethical principle upon which modern contractural law is based (Kennedy, 1976). While many people argued that contract should be designed with an objective to make a proper redistribution of wealth (Kronman, 1980), we should not forget that there is a long list of important issues that have been mentioned in Chapter 17.


The Nature of an Offer

Offer is the second element of a binding contract. This contract deals with relationship between parties. According to this contract, promise is a step forward to creating a legal relationship. This relationship can be enforced in many particular ways. It was proved that in the normal course of negotiations, a person (the promisor) has low chances to make a promise like this one. So it is very important to support this suggestion with some important condition that is adjusted to this offer. In case there is some condition attached to document, the main requirement of doc is to act or give some important promise to act in a proper way.

Consequently, making a promise is very tentative thing to do. “This thing is possible if party expresses its willingness to take this one that action. In most cases, the tentative promise is called an offer.” (C H A P T E R 3 Formation of a Valid Contracthttp://highered.mcgraw-hill.com/sites/dl/free/0070961379/580512/Willes_2Ce_03.pdf). Offer cannot binding on the offering party (the promise or offeror) until the proposal is accepted by the other side. A valid acceptance of documents takes place that the parties are bound together by one single contract.

Communication of an Offer

Communication of an offer is important thing. In many cases it means that offer cannot be communicated by the offeror to the other party (the offeree). This act takes place before the offer can be accepted. My observation shows that people have their first rule that can be used both for offer and acceptance. My current research revelation is that offer must be “communicated by the offeror to the offeree before acceptance may take place.” (C H A P T E R 3

Formation of a Valid Contracthttp://highered.mcgraw-hill.com/sites/dl/free/0070961379/580512/Willes_2Ce_03.pdf)

This rule is obvious to people who are trying to communication to offer to others. The main thing about offer is that is it not always made directly to the offeree by the offeror. In most cases parties support their deal by letter, telegraph, telex, fax, e-mail, and many other important means of communication. Under circumstances like these it is very important for the offeror to know when the offeree becomes aware of the offer.

We have the case like this because an offer is not valid for other people until it is received by the offeree. “As for the offeror, this person is not bound by the offer until such time as it is accepted. The essential point about the process is that no person can agree to an offer unless he or she is aware of it.” (C H A P T E R 3

Formation of a Valid Contracthttp://highered.mcgraw-hill.com/sites/dl/free/0070961379/580512/Willes_2Ce_03.pdf)

The acceptance of new agreement takes place before the offer is made. In this case the

offeror is not bound by the promise. A person who makes an offer is the one who frequently directs its actions towards a specific person. A contract is signed between two different parties. For example, a seller of a specific type of goods may express desire to sell some particular type of good. Hence we have a good reason not to follow a general rule. This rule may put people into danger when they will not adhere to some particular rule but will be using another rule.

Another general rules to be followed is that the only the person to whom an offer is made may accept the offer. If an offer is made to the public at large, this rule naturally does not apply;

Acceptance of an Offer

“While both an offer and its acceptance may be made or inferred from the words or the conduct of the parties, the words or conduct must conform to certain rules that have been established before the acceptance will be valid.” (H A P T E R 3

Formation of a Valid Contracthttp://highered.mcgraw-hill.com/sites/dl/free/0070961379/580512/Willes_2Ce_03.pdf)

The first general rule for acceptance where a response is necessary is simply the reverse of the rule for offers. It states that the acceptance of the offer must be communicated to the offeror in the manner requested or implied by the offeror in the offer. The acceptance must take the form of certain words or acts in accordance with the offer that will indicate to the offeror that the offeree has accepted the offer. “These words or conduct need not normally be precise, but they must convey the offeree’s intentions to the offeror in the manner contemplated for acceptance.” (H A P T E R 3 Formation of a Valid Contracthttp://highered.mcgraw hill.com/sites/dl/free/0070961379/580512/Willes_2Ce_03.pdf)

Before signing contract, the offerer is preparing a letter of acceptance; Later on, the offerer delivers this letter to the post office. Upon acceptance of offer the letter moves into the custody of the postal system. In case the acceptance is lost the offeror has only one choice – specify that acceptance would not be complete until the letter is received.

For all other modes of communication, the acceptance is valid only after the offeror confirmed the acceptance of document.

1. Offer


A contract is an agreement. This agreement is signed between two or more persons. Assigning a contract means that individuals are obligated before each other. (Black’s Dictionary)

A contract is an agreement. This kind of agreement gives rise to mutual obligations between several companies.(Treitel)

Current research indicates that contract is an kind of agreement. A primary objective of this agreement is to create special duties for individual participants of this agreement.

A contract is an agreement which has strong legal force. This agreement recognizes that each party has the right to create its own duties.

A contract can be recognized as set of special promises. These promises give a whole listof remedies for people who want to realize these promises.

The law of performance is a special law that gives people a chance to realize their own duties. (Restatement of the Law of Contracts (also cited by Anson))

A contract is a promise which is comprised of a whole set of promises. These promises can be enforced by law (Pollock)

The main feature of modern contract is that it provides people with a special protection of their rights.

Elements of a Contract

Offer and Communication of offer;

Acceptance and Communication of offer;

Intention to Create Legal Relations;

“Consideration of some important principles related to offer (some argument that has its own value);”

“Certainty of Terms and important to write terms and conditions”

“Privity (making a decision related to what person has a right to bring action);”



Acceptance of offer: method of acceptance can play key role (mail date vs vocal confirmation).

Types of Contract

1. i) Deeds

ii) Simple, parol K’s

2. i) Bilateral Contract – According to this part of contract, each party promises a high level of performance to the other party. According to this contract, each party is an obligor on other party’s promise. This party is given the right to act like oblige to the other’s promise. The rule is the following – Acceptance of offer must be formally voiced. This feature of bilateral contract differentiates it from unilateral contract.

ii) Unilateral Contract – In this kind of contract, only one party has the right to make a promise, or to undertake a special kind of performance. Traditionally, promise made in return for an act. Conduct acts as acceptance of offer. The other important thing is that the terms of contract can be changed any time before the act is completed.

Offer and Invitation to Treat

Court is known to take an objective position while signing contract.

Court’s decision is grounded in manner in which both parties make their own decisions

this decision is concerned not with what parties are supposed to do but with what they were actually doing

Invitations to treat usually make offers based on special circumstances. According to current research, in most part of cases offer is based on a whole list of circumstances; In addition, it offers a whole list of important elements which are also included into contract.

Invitation to treat can be explained as a special kind of document which reflects human willingness to contract and be bound by contract

Carlill v Carbolic Smoke Ball Company is English contract law. This decision was made by the Court of Appeal. The law is based on a very curious subject matter. This law often reflects how the influential judges developed the law in a rather inventive way. Carlill is uslaly referred to as an introductory contract case.

Carlill v. Carbolic Smoke Ball Co.

[1893] Q.B. 256 (C.A.)

Procedural History:

Appeal from decision of Hawkins J. wherein he held that the plaintiff, Ms. Carlill was entitled to recover _100.

Parties to the Action:

“Appellant: Carbolic Smoke Ball Co. [defendants at trial level]

Respondent: Ms. Carlill [plaintiff at trial level]”

(Carlill v. Carbolic Smoke Ball Co.

[1893] Q.B. 256 (C.A.) http://faculty.law.ubc.ca/biukovic/Contracts%20law/Microsoft%20Word%20-%20Case%20Brief%20-%20Carbolic%20%20-%20Sean%20Stynes.pdf)


“The Defendants manufactured and sold the “Carbolic Smoke Ball”. (Carlill v. Carbolic Smoke Ball Co.

[1893] Q.B. 256 (C.A.) http://faculty.law.ubc.ca/biukovic/Contracts%20law/Microsoft%20Word%20-%20Case%20Brief%20-%20Carbolic%20%20-%20Sean%20Stynes.pdf). After manufacturing this product the advertiser printed its own advertisement in local newspaper. In this ad he promised that company promises topay _100 to anyone who uses the above mentioned medicine as directed and nevertheless contracts a cold, influenza, or other cold disease. According to this advertisement, the company agreed to deposit about 1000 into the bank. This measure was taken with an objective to demonstrate human sincerity. The plaintiff showed a tendency to use the ball as a tool to combat influenza. Later on, this person sued company to recover the money promised in the advertisement.


The advertisement often uses general public promising to pay money to anyone who does something create a binding contract between the parties.


“The Defendant argued that:

there is no way to enforce the contract as it is too vague.

there is no way to check the conditions which are present in contract” (Carlill v. Carbolic Smoke Ball Co.

[1893] Q.B. 256 (C.A.) http://faculty.law.ubc.ca/biukovic/Contracts%20law/Microsoft%20Word%20-%20Case%20Brief%20-%20Carbolic%20%20-%20Sean%20Stynes.pdf).

people cannot contract with everybody (ie the whole world)

there is no definite timeline specified in contract

“Acceptance of contract is a thing that had not been communicated to the offeror

there is no chance to take the contract into consideration: nudum pactum;” (Carlill v Carbolic Smoke Ball Company http://en.wikipedia.org/wiki/Carlill_v_Carbolic_Smoke_Ball_Company).


Advertisements of unilateral contract must be approached as offers. People who make a decision to rely upon this offer mechanically enter into agreement. A primary objective of this agreement is to conform to rules an actions mentioned in contract.

In conclusion I can say that contract law and mutual agreements associated with this law helps to regulate relationships between several parties. The analysis which is present in my paper is a clear proof of this statement.

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