The law of contract is an essential aspect of our daily lives, without which we would not be able to engage in transactions with others. The contracts we enter into every day, whether explicitly or implicitly, dictate the terms and conditions of our dealings with each other. However, defining the law of contract can be complex, with different authors offering varying interpretations of the concept.
According to Sir Frederick Pollock, a renowned legal scholar, the law of contract is “the art of keeping agreements”. This definition implies that contracts are binding agreements between parties, and their purpose is to ensure that both parties keep their end of the bargain. A contract creates legal obligations, and when one party breaches these obligations, the other party has the right to pursue legal remedies.
Another notable definition of the law of contract is that offered by Sir William Anson. He describes it as “a legally binding agreement between two or more parties that creates an obligation to do or not to do something.” This definition recognizes that contracts are not limited to mere verbal promises but can also encompass written agreements, and they must involve consideration to be enforceable.
In contrast, some authors offer a more holistic approach to defining the law of contract. For example, Professor Atiyah argues that contract law is about relationships between parties, rather than just enforceable obligations. He posits that the essence of contract law is based on three fundamental ideas: promise, reliance, and expectation. These elements combine to create a web of legal obligations and social norms that govern our interactions with each other.
Moreover, Professor Williston describes the law of contract as a “promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.” This definition emphasizes the remedies available to parties when the contract is breached, either through damages, specific performance, or injunction.
Regardless of the different interpretations offered by various authors, the overarching principle of the law of contract is that parties are bound by their mutual promises, and the law recognizes these promises as enforceable obligations. Contracts are essential to ensure that transactions are conducted fairly, and both parties fulfill their obligations. Therefore, it is crucial to understand the various interpretations of the law of contract to ensure that we can carry out our business dealings legally and ethically.