This presentation provides overview of contracting principles and refers to the relevant case laws from English law. This could be helpful for the students who are new to contract management and do not belong to any legal background.

1. Overview of Contracting Principles

2. Overview of Contracts
Legal Definition:
An exchange relationship created by oral or written
agreement between two or more parties containing at
least one promise, and recognized in law as enforceable.

3. Overview of Contracts
Exchange Relationship
 Need not to be in writing; e.g. oral contracts
 Oral contracts becomes legally binding as soon agreement is
reached
 Relevant case law: Hollier v Rambler Motors [1972]

4. Overview of Contracts
Elements of Legally Binding Contract
I. Agreement (Offer & Acceptace)
II. Consideration
III. Capacity to contract
IV. Intention to create legal relations
V. Legality of the subject matter

5. Overview of Contracts
I. Agreement (Offer)
 Offerer had the intention to be bound
Relevant Case Law: Harvey v Facey [1893]
 Invitation to treat is not an offer
Relevant Case Law: Spencer v Harding [1870]
 Offer can be revoked any time before it is accepted
Relevant Case Law: Dickinson v Dodds (1876]

6. Overview of Contracts
I. Agreement (Acceptance)
 Acceptance must be communicated to the offeree
Relevant Case Law: Felthouse v Bindley [1862]
 The postal rule
Relevant Case Law: Adams v Lindsell [1818]
 A counter-offer negates the original offer
Relevant Case Law: Hyde v Wrench [1840]

7. Overview of Contracts
II. Consideration
 Each party must receive some benefit & suffer a detriment
Relevant Case Law: White v Bluett [1853]
 Existing public duty cannot be used as consideration
Relevant Case Law: Collins v Godefrey [1831]
 Consideration must move from either of the parties
Relevant Case Law: Tweddle v Atkinson [1861]

8. Overview of Contracts
III. Capacity to Contract
 Parties should have reached the age of majority
Relevant Case Law: R leslie ltd v sheill [1914]
 Intoxicated, Unsound mind or bankrupt person
Relevant Case Law: Hart v O'Connor [1985]
 Company as a separate legal entity
Relevant Case Law: Salomon v Salomon [1897]

9. Overview of Contracts
IV. Intention to Create Legal Relations
 Social & domestic agreements are not enforceable by law
Relevant Case Law: Balfour v Balfour [1919]
 Opinion letters contains no legal value
Relevant Case Law: Kleinwort Benson v MMC BHD [1989]
 Not legally binding if a clause is included precluding it
Relevant Case Law: Rose and Frank Co v JR Crompton and Bros Ltd [1924]

10. Overview of Contracts
V. Legality of the subject matter
 Statutory illegality
Relevant Case Law: Fitzgerald v FJ Leonhardt Ltd [1997]
 Common Law
Relevant Case Law: Beresford v Royal Insurance Co Ltd [1938]

11. Overview of Contracts
Vitiating Factors for a Contract
I. Misrepresentation
II. Mistake
III. Duress
IV. Undue influence

12. Overview of Contracts
I. Misrepresentation
 A false statement which induces to form contract
• Fraudulent misrepresentation
Relevant Case Law: Doyle v Olby [1967]
• Negligent misrepresentation
Relevant Case Law: Howard Marine v Odgen (1978]

13. Overview of Contracts
II. Mistake
 Common Mistake: both parties make the same mistake
Relevant Case Law: Strickland v Turner [1852]
 Mutual mistake: both parties are at cross purposes
Relevant Case Law: Collins v Godefrey [1831]
 Consideration must move from either of the parties
Relevant Case Law: Tweddle v Atkinson [1861]

14. Overview of Contracts
III. Duress
 A person enters into an agreement as a result of a threat
 Duress to the person
Relevant Case Law: Barton v Armstrong [1976]
 Duress to goods
Relevant Case Law: Skeate v Beale [1840]
 Economic duress
Relevant Case Law: North Ocean Shipping v Hyundai Construction [1979]

15. Overview of Contracts
IV. Undue Influence
 A contract has been formed due to pressure put on to one party
 Actual undue influence
Relevant Case Law: Williams v Bayley [1866]
 Presumed undue influence
Relevant Case Law: Lloyds Bank v Bundy [1975]

16. Overview of Contracts
Discharge of a Contract
I. Discharge by performance
II. Discharge by agreement
III. Discharge by breach
IV. Discharge by frustration

17. Overview of Contracts
I. Discharge by performance
 When both parties perform their contractual obligations
 Substantial Performance
Relevant Case Law: Sumpter v Hedges [1898]
 Tender of performance
Relevant Case Law: Startup v MacDonald [1843]
 Prevention of performance
Relevant Case Law: Planche v Colburn [1831]

18. Overview of Contracts
II. Discharge by agreement
 Having formed a contract, the parties to it may agree not to go
through with it. Two ways to discharge are as follows:
 Unilateral discharge
where only one party to the contract has rights to surrender
 Bilateral discharge
where both parties to the contract have some right to surrender
Relevant case law: Central London property v High trees house [1947]

19. Overview of Contracts
III. Discharge by breach
 When one party violates what contract stipulates, it is in breach of
contract
 Breach of a condition
Relevant Case Law: Cutter v Powell [1795]
 Breach of a warranty
Relevant Case Law: Bettini v Gye [1876]
 Breach of an innominate term
Relevant Case Law: Hong Kong Fir Shipping v Kawasaki [1962]

20. Overview of Contracts
IV. Discharge by frustration
 Change in circumstances depriving one party to fulfill their
obligation leads to frustration of contract
 Destruction of the subject matter
Relevant Case Law: Taylor v Caldwell [1863]
 Personal incapability
Relevant Case Law: Condor v Baron Knights [1966]
 Contract becomes illegal
Relevant Case Law: Fibrosa Spolka v Fairbairn [1943]

21. Thank you
for your time!
 Bibliography:
I. Legal Aspects in Procurement and Supply (UK), v2
II. The Operational Guide, Contract and Commercial Management