A casebook on contract

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A casebook on contract



Burrows, A. S. (2020). A casebook on contract (7th ed.). Hart Publishing, an imprint of Bloomsbury Publishing.

Chapter Summary

Part One: The Formation of a Contract

  1. Offer and Acceptance
  • Introduction to the concepts of offer and acceptance as fundamental elements in contract formation.
  • Examination of what constitutes an offer and how it is distinguished from invitations to treat through cases such as Harvey v Facey and Gibson v Manchester City Council.
  • Discussion on the acceptance of offers, including methods of communication and the “battle of the forms” (Butler Machine Tool Co Ltd v Ex-Cell-O Corporation).
  1. Certainty and Intention to Create Legal Relations
  • Analysis of the necessity for certainty in terms of contractual agreements, illustrated by cases like Hillas & Co Ltd v Arcos Ltd and Scammell and Nephew Ltd v Ouston.
  • Exploration of the intention to create legal relations, distinguishing between social/domestic agreements and commercial agreements with cases such as Balfour v Balfour and Esso Petroleum Co Ltd v Commissioners of Customs and Excise.
  1. Consideration and Promissory Estoppel
  • Explanation of the concept of consideration, its necessity, and its various forms, including past consideration and pre-existing duties (Williams v Roffey Bros & Nicholls (Contractors) Ltd).
  • Introduction to promissory estoppel as a tool to prevent unfair revocation of promises, demonstrated by Central London Property Trust Ltd v High Trees House Ltd and subsequent cases.

Part Two: The Terms of a Contract

  1. Identifying the Terms
  • Differentiation between terms and representations through key cases such as Oscar Chess Ltd v Williams and Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd.
  • Methods of incorporating terms into contracts, including signature and reasonable notice (L’Estrange v F Graucob Ltd, Parker v The South Eastern Railway Company).
  1. Interpreting the Terms
  • The modern approach to contractual interpretation, focusing on the intentions of the parties and the context, with notable cases like Investors Compensation Scheme Ltd v West Bromwich Building Society and Arnold v Britton.
  • Special rules for construing exemption clauses and limitations of liability, highlighted by Canada Steamship Lines Ltd v R and Photo Production Ltd v Securicor Transport Ltd.
  1. Statutory Control of Exemption Clauses and Unfair Terms
  • Overview of statutory regulations controlling exemption clauses, particularly the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015.
  • Case studies illustrating the application of these statutes, such as Smith v Eric S Bush and Director General of Fair Trading v First National Bank Plc.

Part Three: Remedies for Breach of Contract

  1. Termination
  • Examination of the conditions under which a contract can be terminated for breach, including anticipatory breach and termination clauses (Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd).
  • Discussion on the effects of termination and restitution.
  1. Damages
  • Detailed analysis of compensatory damages, including the calculation and limitations (e.g., remoteness, mitigation) through landmark cases such as Hadley v Baxendale and Victoria Laundry (Windsor) Ltd v Newman Industries Ltd.
  • Exploration of other forms of damages, including account of profits and negotiating damages (Attorney General v Blake).
  1. Direct Enforcement
  • The conditions under which specific performance and injunctions may be granted as remedies for breach of contract (Beswick v Beswick).

Part Four: Privity of Contract and Third-Party Rights

  1. Privity of Contract and Third-Party Rights
  • Examination of the privity doctrine and its exceptions, with key cases like Tweddle v Atkinson and Beswick v Beswick.
  • Analysis of the Contracts (Rights of Third Parties) Act 1999 and its impact on third-party rights.

Part Five: Factors Allowing Escape from a Contract

  1. Misrepresentation
  • Identification of different types of misrepresentation and the remedies available, including rescission and damages (Derry v Peek, Hedley Byrne & Co Ltd v Heller & Partners Ltd).
  1. Mistake
  • Analysis of the role of mistake in contract law, differentiating between unilateral and common mistake (Smith v Hughes, Bell v Lever Brothers Ltd).
  1. Frustration
  • Discussion on the doctrine of frustration, its application, and the effects on contractual obligations (Taylor v Caldwell, Davis Contractors Ltd v Fareham Urban District Council).
  1. Duress
  • Exploration of duress as a factor invalidating contracts, including economic duress (North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd).
  1. Undue Influence and Exploitation of Weakness
  • Examination of undue influence and the exploitation of weakness in contractual relationships (Barclays Bank plc v O’Brien).

Key Concepts


  • Definition: An expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed.
  • Key Cases:
    • Harvey v Facey (distinction between offer and invitation to treat).
    • Carlill v Carbolic Smoke Ball Company (unilateral contracts).


  • Definition: An unequivocal statement or act that indicates agreement to the terms of an offer.
  • Key Cases:
    • Entores Ltd v Miles Far East Corporation (communication of acceptance).
    • Butler Machine Tool Co Ltd v Ex-Cell-O Corporation (battle of the forms).


  • Requirement that the terms of the contract must be clear and unambiguous.
  • Key Cases:
    • Hillas & Co Ltd v Arcos Ltd (vagueness and enforcement).
    • Scammell and Nephew Ltd v Ouston (terms must be clear to be enforceable).

Intention to Create Legal Relations

  • Parties must intend for their agreement to be legally binding.
  • Social and Domestic Agreements: Typically presumed not to be legally binding unless proven otherwise.
    • Balfour v Balfour (presumption in domestic agreements).
  • Commercial Agreements: Presumed to be legally binding.
    • Esso Petroleum Co Ltd v Commissioners of Customs and Excise (commercial presumption).


  • Definition: Something of value exchanged between parties that is necessary for a valid contract.
  • Key Principles:
    • Must be sufficient but need not be adequate (Chappell & Co Ltd v Nestlé Co Ltd).
    • Past consideration is not valid consideration (Eastwood v Kenyon).
    • Performance of an existing duty is not good consideration unless it exceeds the duty (Williams v Roffey Bros & Nicholls (Contractors) Ltd).

Promissory Estoppel

  • Doctrine preventing a promisor from going back on a promise which the promisee has relied upon.
  • Key Cases:
    • Central London Property Trust Ltd v High Trees House Ltd (establishing the doctrine).
    • Combe v Combe (promissory estoppel as a shield, not a sword).

Identifying Terms

  • Terms must be clearly identifiable as part of the contract.
  • Key Cases:
    • L’Estrange v F Graucob Ltd (signed documents).
    • Parker v The South Eastern Railway Company (reasonable notice).

Interpreting Terms

  • Interpretation aims to determine the intent of the parties and the meaning of the terms.
  • Modern Approach:
    • Investors Compensation Scheme Ltd v West Bromwich Building Society (principles of interpretation).
    • Chartbrook Ltd v Persimmon Homes Ltd (contextual and purposive interpretation).

Unfair Contract Terms Act 1977 (UCTA)

  • Regulates clauses that exclude or limit liability in contracts.
  • Key Provisions:
    • Sections 2 to 7, covering negligence, breach of contract, and statutory implied terms.
  • Reasonableness Test: Determines whether exclusion clauses are enforceable.

Consumer Rights Act 2015

  • Protects consumers against unfair terms and ensures rights in sales and service contracts.
  • Key Sections:
    • Part 2 on unfair terms, particularly focusing on consumer contracts.


  • Compensatory Damages: Aimed at putting the injured party in the position they would have been in if the contract had been performed.
  • Key Cases:
    • Hadley v Baxendale (remoteness of damage).
    • Victoria Laundry (Windsor) Ltd v Newman Industries Ltd (loss must be foreseeable).


  • Allows an aggrieved party to end the contract due to a significant breach.
  • Key Concepts:
    • Conditions and warranties (Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd).
    • Anticipatory breach (Hochster v De La Tour).

Privity of Contract

  • Only parties to a contract can sue or be sued on it.
  • Key Cases:
    • Tweddle v Atkinson (establishing the doctrine).
    • Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (reinforcing the principle).

Contracts (Rights of Third Parties) Act 1999

  • Allows third parties to enforce contract terms if the contract expressly provides for it or if the term purports to confer a benefit on them.


  • False statement inducing another to enter into a contract.
  • Types: Fraudulent, negligent, and innocent misrepresentation.
  • Key Cases:
    • Derry v Peek (fraudulent misrepresentation).
    • Hedley Byrne & Co Ltd v Heller & Partners Ltd (negligent misrepresentation).


  • Contract can be void if there is a fundamental mistake.
  • Types: Common, mutual, and unilateral mistakes.
  • Key Cases:
    • Smith v Hughes (unilateral mistake).
    • Bell v Lever Brothers Ltd (common mistake).


  • Contract is discharged if an unforeseen event renders performance impossible or radically different.
  • Key Cases:
    • Taylor v Caldwell (impossibility).
    • Davis Contractors Ltd v Fareham Urban District Council (performance becomes onerous).


  • Contracts entered under duress are voidable.
  • Types: Physical, economic, and illegitimate pressure.
  • Key Cases:
    • North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd (economic duress).

Undue Influence and Exploitation of Weakness

  • Contracts entered due to undue influence or exploitation are voidable.
  • Key Cases:
    • Barclays Bank plc v O’Brien (undue influence).

These key concepts lay the foundational understanding of contract law principles as discussed in “A Casebook on Contract” by Andrew Burrows.

Critical Analysis

Offer and Acceptance

  • Offer vs. Invitation to Treat: The distinction between an offer and an invitation to treat is crucial but can often be blurred. Cases such as Partridge v Crittenden and Fisher v Bell highlight the nuanced nature of this distinction. The implications of these distinctions are significant, as they determine when a binding agreement can be said to have been formed.
  • Communication of Acceptance: The complexities surrounding the communication of acceptance are well-documented, particularly in the context of instantaneous communications versus postal rule scenarios (Entores Ltd v Miles Far East Corporation vs. Adams v Lindsell). The evolution of technology and the rise of digital communications further complicate these issues, requiring continual reassessment of traditional principles.

Certainty and Intention to Create Legal Relations

  • Vagueness and Incomplete Agreements: Courts have consistently grappled with the enforceability of vague or incomplete agreements (Hillas & Co Ltd v Arcos Ltd, Scammell and Nephew Ltd v Ouston). The modern approach leans towards upholding agreements wherever possible by interpreting them in a manner that reflects the parties’ intentions, even if some terms remain ambiguous.
  • Social vs. Commercial Contexts: The presumption that social agreements are not intended to be legally binding (Balfour v Balfour) versus the opposite presumption for commercial agreements (Esso Petroleum Co Ltd v Commissioners of Customs and Excise) demonstrates the importance of context in contract law. However, this binary approach may oversimplify the diverse range of agreements that exist in practice.

Consideration and Promissory Estoppel

  • Adequacy and Sufficiency of Consideration: The principle that consideration need not be adequate but must be sufficient (Chappell & Co Ltd v Nestlé Co Ltd) ensures that courts do not delve into the fairness of the bargain, thus respecting contractual freedom. However, this can sometimes result in the enforcement of agreements where one party has provided only nominal consideration.
  • Promissory Estoppel as a Shield: The doctrine of promissory estoppel, as established in Central London Property Trust Ltd v High Trees House Ltd, operates to prevent injustice by holding parties to their promises even in the absence of consideration. The limitation that it cannot be used as a cause of action (Combe v Combe) ensures it does not undermine the requirement of consideration, maintaining a balance between flexibility and certainty in contract law.

Identifying and Interpreting Terms

  • Parol Evidence Rule: The parol evidence rule, which prevents the introduction of extrinsic evidence to alter written contracts, is often circumvented by exceptions such as fraud, mistake, or incomplete agreements. This demonstrates the tension between upholding the integrity of written contracts and ensuring justice.
  • Modern Interpretative Approaches: The shift towards a contextual and purposive approach in interpreting contract terms (Investors Compensation Scheme Ltd v West Bromwich Building Society) reflects a more realistic understanding of commercial transactions. However, this approach can sometimes lead to unpredictability, as it relies heavily on judicial interpretation.

Statutory Control and Unfair Terms

  • Reasonableness Test under UCTA: The reasonableness test under the Unfair Contract Terms Act 1977 ensures that exclusion clauses are scrutinized for fairness, providing a safeguard against abuse. However, the subjective nature of this test can lead to inconsistent application.
  • Consumer Rights Act 2015: The Consumer Rights Act 2015 strengthens consumer protection by addressing unfair terms comprehensively. Its impact is significant in rebalancing the power dynamics between consumers and businesses, yet it places additional compliance burdens on businesses.

Remedies for Breach of Contract

  • Expectation vs. Reliance Damages: The preference for expectation damages in contract law aims to put the injured party in the position they would have been if the contract had been performed (Robinson v Harman). However, this can sometimes lead to overcompensation, particularly in cases where the expectation interest is speculative.
  • Liquidated Damages and Penalties: The distinction between enforceable liquidated damages and unenforceable penalties (Cavendish Square Holding BV v Makdessi) ensures that contractual provisions serve as genuine pre-estimates of loss rather than punitive measures. This distinction, however, can be difficult to apply in practice, as it often requires a detailed analysis of the parties’ intentions.

Privity and Third-Party Rights

  • Challenges to Privity Doctrine: The privity doctrine has been challenged and reformed to reflect modern commercial realities, particularly through the Contracts (Rights of Third Parties) Act 1999. This statutory reform allows third parties to enforce terms intended for their benefit, addressing the limitations of traditional privity rules.

Factors Allowing Escape from a Contract

  • Balancing Doctrines of Mistake and Frustration: The doctrines of mistake and frustration provide mechanisms for escaping contracts that have become unworkable due to unforeseen circumstances. However, the narrow scope of these doctrines (Bell v Lever Brothers Ltd, Davis Contractors Ltd v Fareham Urban District Council) ensures that they are not used as easy escape routes, maintaining the sanctity of contracts.
  • Duress and Undue Influence: The recognition of duress and undue influence as factors invalidating contracts ensures that agreements are entered into freely and voluntarily. However, proving these factors can be challenging, requiring a delicate balance between protecting vulnerable parties and upholding contractual certainty.


The critical analysis of key concepts in contract law reveals a complex interplay between upholding contractual freedom and ensuring fairness. While traditional principles provide a foundation for certainty and predictability, modern developments and statutory reforms reflect an evolving understanding of commercial realities and the need for flexibility. The challenge lies in striking a balance that respects both the sanctity of contracts and the protection of parties from unfair practices.

Real-World Applications and Examples

Offer and Acceptance

  • E-commerce Transactions: Online shopping platforms illustrate the principles of offer and acceptance in a digital context. For example, when a customer places an item in their shopping cart and proceeds to checkout, they are making an offer. The e-commerce platform’s confirmation of the order typically represents acceptance, forming a binding contract.
  • Job Offers: Employment contracts are another practical application. A job offer made by an employer and accepted by a candidate demonstrates the concepts of offer and acceptance. Issues can arise regarding when the acceptance is communicated and whether all terms were clear, similar to Felthouse v Bindley where silence was not considered acceptance.

Certainty and Intention to Create Legal Relations

  • Social Media Agreements: In the age of social media, informal agreements can often lead to disputes about the intention to create legal relations. For instance, a public promise or agreement made on platforms like Twitter may lack the necessary intention to be legally binding unless there is clear evidence that the parties intended to enter into a contract.
  • Domestic Arrangements: Domestic agreements, such as those related to household chores or shared expenses among roommates, typically do not create legal relations. However, disputes can arise if one party believes a binding agreement was in place, highlighting the principles seen in Balfour v Balfour.

Consideration and Promissory Estoppel

  • Subscription Services: Many digital services, such as streaming platforms or software subscriptions, involve consideration in the form of monthly payments. If a service provider promises a discount or extension of service, and the customer relies on this promise, promissory estoppel may prevent the provider from going back on their word, reflecting the principles in Central London Property Trust Ltd v High Trees House Ltd.
  • Renegotiation of Debts: In financial services, creditors sometimes promise to reduce debt or extend repayment terms. If the debtor relies on this promise and acts upon it, promissory estoppel may apply, preventing the creditor from retracting their promise, similar to Hughes v Metropolitan Railway Co.

Identifying and Interpreting Terms

  • Rental Agreements: Rental contracts often include terms that are disputed, such as maintenance responsibilities or conditions for deposit returns. Clear identification and interpretation of these terms can prevent disputes, as seen in L’Estrange v F Graucob Ltd where a signed contract bound the parties to all its terms, even those not read by one party.
  • Service Contracts: Contracts for professional services, such as legal or medical services, must clearly outline the scope and terms of the service. Disputes often arise over implied terms or the interpretation of vague clauses, reflecting issues seen in Parker v The South Eastern Railway Company.

Statutory Control and Unfair Terms

  • Consumer Purchases: The Consumer Rights Act 2015 protects consumers from unfair terms in purchase contracts. For example, a gym membership contract cannot include unfair terms that excessively penalize members for early termination, ensuring fairness as seen in Director General of Fair Trading v First National Bank Plc.
  • Software Licenses: Software and app licenses often include clauses limiting liability for malfunctions. These clauses must comply with UCTA and the Consumer Rights Act, ensuring they pass the reasonableness test and do not unfairly disadvantage consumers, similar to the scrutiny of exemption clauses in Smith v Eric S Bush.

Remedies for Breach of Contract

  • Construction Contracts: In construction, breaches often involve delays or substandard work. Damages are calculated to cover the cost of completion or repair, reflecting principles from Hadley v Baxendale. Additionally, specific performance may be sought for unique projects, similar to Beswick v Beswick.
  • Event Cancellations: If a contracted event, like a concert, is canceled, the organizers may face claims for breach of contract. Damages would cover ticket refunds and related expenses, with mitigation required by the claimants, echoing the duty to mitigate damages seen in British Westinghouse Electric v Underground Electric Railways Co of London Ltd.

Privity and Third-Party Rights

  • Insurance Policies: Third-party beneficiaries of insurance contracts, such as family members under a life insurance policy, can enforce their rights under the Contracts (Rights of Third Parties) Act 1999. This statutory exception to privity allows beneficiaries to claim directly, addressing limitations highlighted in Tweddle v Atkinson.
  • Construction Subcontracts: In construction projects, subcontractors may enforce certain terms of the main contract if expressly provided for their benefit, reflecting reforms under the Contracts (Rights of Third Parties) Act 1999.

Factors Allowing Escape from a Contract

  • Online Misrepresentation: In e-commerce, sellers must accurately describe products. Misrepresentations, whether fraudulent or negligent, can lead to rescission of the sale and damages, as demonstrated by cases like Derry v Peek and Hedley Byrne & Co Ltd v Heller & Partners Ltd.
  • Frustration in Supply Chains: Global events like pandemics or natural disasters can frustrate contracts in supply chains, making performance impossible. Such cases invoke the doctrine of frustration, similar to Taylor v Caldwell, discharging the parties from their obligations.
  • Economic Duress in Business: Businesses facing economic duress, such as being forced into unfavorable contracts under threat of financial ruin, can seek relief by proving duress, reflecting principles from North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd.
  • Undue Influence in Financial Agreements: Loans or guarantees obtained through undue influence, especially in family businesses, can be challenged and set aside, following the reasoning in Barclays Bank plc v O’Brien.


The practical applications and real-world examples of contract law principles as discussed in Andrew Burrows’ “A Casebook on Contract” demonstrate the dynamic and evolving nature of this field. These principles not only guide legal professionals in interpreting and enforcing contracts but also impact everyday transactions and agreements. The balance between legal doctrines and real-world considerations ensures that contract law remains relevant and effective in addressing contemporary issues.

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