Competing Ideologies
It should be clear that there are competing ideologies within contract law. Adams and Brownsword explored this aspect of contract law in a 1987 article. Adams and Brownsword identified two basic philosophies, Market-individualism and Consumer-welfarism.
Market-individualism
This theory recognises the function of the market place as a venue for “competitive exchange.” The laws of contract facilitate competitive bargaining.
Although Adams and Brownsword recognise that it is not “the law of the jungle,” contract law does not require full disclosure of all pertinent facts to the other contracting party. This theory encapsulates the principles of freedom of contract and also caveat emptor.
One example of this is in purchasing a house. The seller is not legally obliged to tell the buyer about matters that may materially affect the value of the property (e.g. impending developments in the neighbourhood.)
The other aspect of market-individualism is that contracting parties should be free to make their own bargains without the interference of the court. This idea encapsulates the idea of the sanctity of a contract and also the laissez faire approach of the court.
Consumer-Welfarism
This theory is completely different. It makes the fundamentally different assumption that contracts should be regulated. This means in particular, consumer contracts, but it also includes commercial contracts. Important features of this theory are the potential for stronger parties to abuse their position-therefore the law should favour the weaker party.
An oral contract – is it worth the paper it isn’t written on?
The majority of contracts formed each day are made orally and are perfectly valid.
The law only requires certain contracts to be made in writing.
Under S.2 (1) Law of Property (Miscellaneous Provisions) Act 1989 a contract for the sale of any interest in land can only be made in writing.
Under S.4 The Statute of Frauds 1677 an agreement for guaranteeing an amount due under a debt or some other obligation must be in writing. Therefore an oral guarantee is not enforceable.
Contracts made by Deed
Under S.52 (1) Law of Property Act 1925, all conveyances of land must be made by deed.
Please note – the use of deeds is not restricted to conveyancing. It can useful for many important transactions. For contracts under deed there is no requirement that both parties provide consideration.
The role of the courts – the desire for certainty
If there were only one word to describe the rationale behind the courts’ attitude to contract law – that word would have to be certainty.
The courts have adopted a variety of different methods, doctrines and rules, all of which are intended to ensure that people can enter into agreements with the certainty that these agreements can and will be enforceable in the courts.
Although this approach has been significantly adapted (mostly by statute) to cater for the modern day consumer, the desire for certainty still lies at the heart of contract law.
See further, textbooks:
It should be clear that there are competing ideologies within contract law. Adams and Brownsword explored this aspect of contract law in a 1987 article. Adams and Brownsword identified two basic philosophies, Market-individualism and Consumer-welfarism.
Market-individualism
This theory recognises the function of the market place as a venue for “competitive exchange.” The laws of contract facilitate competitive bargaining.
Although Adams and Brownsword recognise that it is not “the law of the jungle,” contract law does not require full disclosure of all pertinent facts to the other contracting party. This theory encapsulates the principles of freedom of contract and also caveat emptor.
One example of this is in purchasing a house. The seller is not legally obliged to tell the buyer about matters that may materially affect the value of the property (e.g. impending developments in the neighbourhood.)
The other aspect of market-individualism is that contracting parties should be free to make their own bargains without the interference of the court. This idea encapsulates the idea of the sanctity of a contract and also the laissez faire approach of the court.
Consumer-Welfarism
This theory is completely different. It makes the fundamentally different assumption that contracts should be regulated. This means in particular, consumer contracts, but it also includes commercial contracts. Important features of this theory are the potential for stronger parties to abuse their position-therefore the law should favour the weaker party.
The majority of contracts formed each day are made orally and are perfectly valid.
The law only requires certain contracts to be made in writing.
Under S.2 (1) Law of Property (Miscellaneous Provisions) Act 1989 a contract for the sale of any interest in land can only be made in writing.
Under S.4 The Statute of Frauds 1677 an agreement for guaranteeing an amount due under a debt or some other obligation must be in writing. Therefore an oral guarantee is not enforceable.
Contracts made by Deed
Under S.52 (1) Law of Property Act 1925, all conveyances of land must be made by deed.
Please note – the use of deeds is not restricted to conveyancing. It can useful for many important transactions. For contracts under deed there is no requirement that both parties provide consideration.
The role of the courts – the desire for certainty
If there were only one word to describe the rationale behind the courts’ attitude to contract law – that word would have to be certainty.
The courts have adopted a variety of different methods, doctrines and rules, all of which are intended to ensure that people can enter into agreements with the certainty that these agreements can and will be enforceable in the courts.
Although this approach has been significantly adapted (mostly by statute) to cater for the modern day consumer, the desire for certainty still lies at the heart of contract law.
See further, textbooks:
