Contract Law Vocabulary

A complete set of vocabulary flashcards covering core terms, legal doctrines, statutes, and landmark legal cases from contract law.

Unilateral Contract

A contract where one party takes responsibility and the other may or may not, where the offeror is specified from the outset but the offeree may not be (Carlill v Carbolic Smoke Ball Company [1893]).

Bilateral Contract

A contract where both parties take responsibility and both the offeror and offeree are specified.

Offer

Defined in Storer v Manchester City Council [1974] as inviting another person to enter into a binding contract; any statement which is certain with no room for further discussions or negotiations.

Invitation to treat (ITT)

Defined in Gibson v Manchester City Council [1979] as inviting an offer from the other party or statements which invite the other party to commence negotiations.

Counter Offer

An offeree's response to an offer that nullifies the original offer and becomes a fresh offer from the other side (Hyde v Wrench [1840]).

Postal rule

A rule stated in Adams v Lindsell [1818] establishing that postal acceptances are valid when posted rather than when communicated, acting as an exception to the general communication rule.

Consideration

A legal concept from Currie v Misa defined as a benefit to the promisor or a detriment to the promisee that gives a contract enforceability based on reciprocity.

Past Consideration

An executed act carried out before a promise is given, which as a general principle of law is not considered valid consideration (Roscorla v Thomas; Re McArdle [1951]).

Practical benefit

An extra benefit accrued to the promisor upon the completion of the existing duty of the promisee, which can make an extra promise binding provided there is no economic duress (Williams v Roffey).

Economic duress

Occurs when one party uses its superior economic power to force a weaker party into an agreement, distinguished from normal commercial bargaining pressures.

Promissory Estoppel

A doctrine introduced in Hughes v Metropolitan Railway and refined in High Trees that holds a promise binding without consideration when specific equitable requirements are met.

Contract for Necessaries

A contract binding on minors defined by s.3(3) of the Sale of Goods Act 1979 as goods suitable to the condition in life of the minor and to their actual requirements at the time of sale and delivery.

Parol Evidence Rule

A rule stating that if a contract is in writing, courts will not consider extrinsic statements or evidence other than what is expressly written (Jacobs v Batavia).

Condition

A contractual term that goes to the root of the contract; its breach gives the non-breaching party the right to terminate the contract and sue for damages without showing loss.

Warranty

A trivial term in a contract whose breach does not have severe consequences and allows the non-breaching party to sue for damages only, not to terminate the contract.

Innominate Term

A term concept from Hong Kong Fir that cannot initially be classified as a condition or warranty, evaluated based on whether the breach deprives the innocent party of substantially the whole benefit.

Contra Proferentem Rule

A rule of construction where the court interprets an ambiguous contractual term or exclusion clause against the party relying on it (Houghton v Trafalgar Insurance).

Fairness Test (CRA 2015)

Under CRA 2015 s.62(4), a test assessing whether a term is unfair by causing a significant imbalance in the parties' rights and obligations to the detriment of the consumer, contrary to good faith.

Fraudulent Misrepresentation

Defined in Derry v Peek [1889] as a false representation made knowingly, recklessly, or without belief in its truth.

Statutory Negligent Misrepresentation

A claim under s.2(1) of the Misrepresentation Act 1967 where the representor is liable unless they prove reasonable grounds to believe the statement was true at the time it was made.

Rescission

A remedy for misrepresentation that sets aside or terminates the contract to restore the parties back to their original positions.

Cross purpose mistake

A mistake where both parties are mistaken about different matters, rendering the contract void only if an objective bystander cannot conclusively determine what was agreed (Raffles v Wichelhaus).

Frustration

The legal doctrine where an unforeseen post-formation change of circumstances, occurring without fault of either party, renders contract performance impossible, illegal, or radically different (National Carriers Ltd).

Force Majeure Clause

A contractual provision that contemplates specific unforeseen events; if it expressly covers the event, a party cannot claim frustration.

Anticipatory Breach

Occurs when a party expresses or implies a clear and absolute refusal to perform their contractual obligations before performance is due (Universal Cargo Carriers Corp v Citati [1957]).