Not all agreements will be contract enforceable in law - social arrangements, for example, or contracts which offend against public decency and public policy and those which involve criminal activity.
‘A contract is an agreement giving rise to obligations which are enforced or recognised by law. The factor which distinguishes contractual from other legal obligations is that they are based on the agreement of the contracting parties.' Treitel
‘A promise or set of promises which the law will enforce.' Pollock
‘The law of contract may be provisionally described as that branch of the law which determines the circumstances in which a promise shall be legally binding on the person making it.' Anson
1.2 Why should contracts be enforced? As a very broad principle, agreement between individuals and between commercial entities is based on a very high degree of freedom of choice; but, in the modern era with increasing use of statute to regulate behaviour that may mislead, exclude liability or be oppressive.
1.3 Essentials of a modern contract * Intention to create legal relations * Offer * Acceptance * Written formalities in exceptional cases * Consideration except for contracts under deed * Clear terms * Parties must have capacity to contract * The contract must not be ‘illegal' or contrary to public policy
There must have been genuine consent, not vitiated by:
* Undue influence
1.4 Contracts may be void, voidable or unenforceable
In the absence of any of the elements referred to in s1.3 the contract may be void, voidable or unenforceable.
Void ab initio – no legal effect at all.
Voidable – legally binding, but one party has a right to set it aside
Unenforceable – valid in all respects but may not be enforced in a court of law. Money paid under such a contract cannot usually be recovered.
Limitation Act 1980