BUTTERWORTHS COMMON SERIES

The Law of

Second Edition

SERIES EDITOR Andrew Grubb MA (Cantab), LLD (Lond), FMedSci, Professor of Medical Law and Head of Cardiff Law School, Cardiff University

GENERAL EDITOR Michael Furmston TD, MA, BCL, LLM, Bencher of Gray's Inn Emeritus Professor and Senior Research Fellow, University of Bristol

CONTRIBUTORS Roger Brownsword LLB Professor of Law, King's College London, and Honorary Professor of Law, University of Sheffield Robert Bradgate MA (Cantab), Professor of , University of Sheffield Elizabeth Macdonald LLB (Bristol), LLM (Cantab) Reader, University of Wales, Aberystwyth Malcolm Clarke MA, LLB, PhD Professor of Commercial Contract Law, University of Cambridge Andrew Phang LLB (NUS), LLM, SJD (Harvard), Advocate and Solicitor (Singapore) Professor of Law, Singapore Management University John Adams MA, Solicitor Professor of , University of Sheffield GJTolhurst LLM(Syd) Lecturer, Faculty of Law, University of Sydney JW Carter BA, LLB (Syd), PhD (Cantab) Professor of Commercial Law, University of Sydney Consultant, Freehills Roger Halson LLB,MLit(Oxon) Professor of Law, University of Leeds

LexisNexis™UK Contents

Series preface v Foreword vii Preface to the second edition ix Preface to the first edition x Stop press xi Abbreviations xxxi Table of xxxv Table of statutory instruments xlvii Table of cases li

CHAPTER I General Considerations I Roger Brownsword A The Nature of Contract 1 Definition 1 Agreement, exchange, and promise as essential definitions of contract 2 Promise as a necessary condition 4 Promise as a sufficient condition 6 Synthesis 8 Is the definitional question merely academic? 9 The essential ethic of contract 11 The function of contract law 18 The classification of and contractors 21 B Freedom of Contract 24 The classical law of contract 24 Freedom of contract 27 The decline of freedom of contract 32 The coherence of freedom of contract 38 Synthesis 41 C Inequality of Bargaining Power 41 Inequality of bargaining power: from the classical to the modern view 41 Relative bargaining strength and inequality of bargaining power 46 Rejection of a general doctrine of inequality of bargaining power 52 Correcting bargaining inequality: between collapse and reconstruction 56 xiv Contents

D Reasonableness 57 Reasonableness: four steps from the classical to the modern law 57 Reasonableness as a supplementary principle 60 Reasonableness as a limiting principle 66 E GoodFaith 70 A general principle of good faith 70 The sceptical view 72 Neutrality and scepticism 76 Against scepticism 78 Three models of good faith 84 Good faith and reasonableness 87 F The Tendency of the Modern Law 88 The ideologies of contract 88 Static and dynamic market-individualism contrasted 90 indications 94 Dynamic market-individualism, reasonable expectation, and contextual interpretation 102 Dynamic market-individualism as the ruling ideology 108 Beyond dynamic market-individualism 110 . G The Globalisation of Contract Law 112 The meaning and relevance of globalisation 112 Electronic contracting environments 113 Integration: the two principal questions 115 The Lando Commission 120 Harmonisation within the European Union 121 Convergence within the world 125 An of contract: esperanto or lingua franca? 129 H The Interfaces of Contract Law 131 Contract in the context of domestic law 131 The common 132 Background (fixed) obligations and contractual obligations 133 Difficulties at the interface between contract and negligence 134 Disputes between contracting parties 134 Disputes between a contracting party claimant and a non-contracting third- party defendant 142 Disputes between a non-contracting third-party claimant and a contracting party defendant 148 An intelligible mosaic? 155 Contract and 157 Where the private contractor claims that contract governs 158 Where the public contractor claims that contract governs 163 Synthesis 165 I Contract Law and the Act 1998 165 The impact of the Human Rights Act 1998 165 Wilson v First County Trust Ltd 167 The question of horizontality 171 The application of the Convention rights to contract law questions 176 Freedom of contract and waiver or restriction of the benefit of a Convention right 178 Public authorities under the Human Rights Act 1998 181 Conclusion 184 J The Rationality of Contract Law 186 Theideaofrationalityinthelaw 186 Contents xv

Formal rationality 186 Instrumental rationality 192 Substantive rationality 197

CHAPTER 2 Formation of Contracts 203 Robert Bradgate A Introduction 203 The elements of contract 203 Relationship between the elements of contract 204 The role of offer and acceptance 206 The significance of intention 208 Alternative bases for the enforcement of promises 211 Promises enforceable on the basis of waiver or 211 Promises in 212 Other factors affecting enforceability 212 Statutory modification of formation rules 213 B Tests of Enforceability 214 The doctrine of consideration 214 Relaxation of the doctrine 215 Alternative bases for enforcement 216 History and development of the doctrine of consideration 217 Definitions of consideration 218 Are benefit and detriment both necessary? 221 Maxims 223 Consideration and bargains 223 Consideration in a commercial context 225 Consideration must move from the promisee 226 Consideration must be sufficient 232 Consideration need not be adequate 232 Consideration must be something of value in the eyes of the law 237 Forbearance as consideration 239 Promises as consideration 243 Consideration distinguished from motive 247 Consideration and conditional promises 248 Past consideration 252 Performance of existing duties 256 Type (a): Performance of pre-existing public duties 257 Type (b)(l): Performance of existing duties arising under a contract between promisee and a third party 259 Type (b)(2): Performance of duties under existing contract between promisor and promisee 263 Consideration and the variation of contracts 276 Consideration and the part payment of debts 280 Exceptions to the rule in Foakesv Beer 284 Waiver and estoppel 289 A general principle? 290 Common law waiver 292 Promissory estoppel 300 Estoppel as a cause of action in English law 318 Proprietary estoppel 319 xvi Contents

Estoppel by convention 325 Potential for development 327 Deeds as an alternative to consideration 334 Requirements for a valid 335 C The Concept of Agreement and the Assessment of Intention 336 The concept of agreement 336 Offer and acceptance analysis 337 An alternative analysis 339 Legal obligations arising from inchoate agreements 340 Intention and objectivity 344 Basis of the objective principle 345 The meaning of objectivity 347 The relevance of subjective intention 348 Inferred contracts 352 Certainty and Completeness 356 Parties must agree all essential terms 357 Uncertain or ambiguous terms 367 Intention to Create Legal Relations 370 Introduction 370 Relationship with requirement of certainty 372 Objective assessment of intention 372 Family and social agreements 373 Business arrangements 378 Preliminary agreements and agreements subject to contract 390 Offer 397 Introduction 397 Intention to make offer 399 Offer must set out main terms of contract 400 Offers and invitations to treat 401 Offers under the Vienna Convention 414 Acceptance 415 Introduction 415 Offer may only be accepted by offeree 416 Acceptance must be absolute and unconditional 416 How is acceptance effected? 421 Offeree must intend to accept the offer 426 Is the offer still open for acceptance? 428 Communication of acceptance 433 When is communication effective? 435 Offer and acceptance in unilateral contracts 443 Nature of unilateral contract 443 Offer and acceptance in unilateral contracts 444 D Form and Formality 449 Introduction 449 Qualifications to the general rule 449 Formal requirements and the Human Rights Act 1998 450 Formal requirements and electronic commerce 453 The of Frauds 458 Written contract or written memorandum 460 Memorandum may be in more than one document 467 The effects of non-compliance 468 The effect of non-compliance in : the doctrine of part performance 470 Contents xvii

Contracts of guarantee 472 Guarantee distinguished from indemnity 473 Excluded contracts 474 Requirements 475 Guarantees and the Consumer Credit Act 1974 476 Application of doctrine of part performance to guarantees 476 Estoppel 476 Contracts for the sale or disposition of interests in land 477 Contracts made prior to 1989 477 Contracts made after 1989 481 Bills of exchange, cheques and promissory notes 493 Signature 494 Unconditional order 494 A sum certain 495 Time for payment 495 Additional information in bills 496 Effect of non-compliance 496 Alteration of a bill of exchange 497 Bills of sale 497 Consumer credit and hire agreements 499 499 Execution of regulated ageements 499 Contracts made away from business premises 502 Distance sales contracts 503 Provision of information 503 Non-compliance 505 Financial Services 505 Distance Selling of Financial Services 506 Contracts of employment 508 Reference to other documents 509 Time limits 509 Exceptions 509 Relationship between written statement and contract 510 Effect of non-compliance 510 Statement of deductions from wages 510 Insurance 511 Other cases 511 agents 511 512 Commercial agency 512 Directory entries 512 Sales of ships 512 Loans to businesses 512 Arbitration agreements 513

CHAPTER 3 Contents 515

Elizabeth Macdonald : A Express Terms 515 Statements 515 xviii Contents

Basic approach 515 Factors 516 Collateral contracts 518 The parol rule 521 Therule 521 Misnomer as a rule 521 'Exceptions' 524 Entire contracts clauses 526 Written terms or notices - signed 530 Basic rule 530 Contractual documents 530 Misrepresentation 530 Artificiality - Developments ? 531 Notice - Unsigned documents 532 Time 532 Notice 532 Basic test 533 Type of document 535 The content of the clause 536 Reference 538 Course of dealing and trade practice 539 B ImpliedTerms 541 Terms implied in fact 542 Terms implied in law 547 Subject to contrary express term 549 A contract of a defined type 549 Necessity 550 Custom 553 C Classification of Terms 555 Contingent conditions 555 Terminology 555 Non-promissory contingent conditions 555 Preventing a contract coming into existence 556 Suspending obligations 556 Distinguishing the two 557 Subsidiary obligations 559 Waiving the condition 560 Contingent promissory conditions 561 Conditions, warranties and innominate terms 562 Types of term 562 The classification 564 Express classification 567 Standard classifications 568 Making the classification in general 569 Terms classified as innominate 572 D Construction 572 Basic approach 574 'Natural and ordinary meaning' 575 The background or 'matrix of fact' 576 Commercial sense and unreasonable results 583 Weighing the different types of evidence 584 Special meanings 585 Contents xix

Documents forming part of the same transaction 586 Saving the contract 587 Mistakes 587 Contra proferentem 590 Eiusdem generis rule 591 ExpressioUnius 592 Exemption Clauses 593 Introduction 593 Construction 594 Approaches 594 The effects of - contract drafting 595 Strict construction, contra proferentem 596 Negligence 598 Inconsistent terms 602 Fundamental breach 603 Within the performance of the contract 604 The main purpose rule 604 Deviation 605 Exemption clauses and third parties 606 Contracts (Rights of Third Parties) Act 1999 606 Avoiding the privity rule at common law 608 The Burden of the Clause 611 The Unfair Contract Terms Act 1977 611 Scope of the Unfair Contract Terms Act 1977 611 Terms subject to UCTA1977 616 Negligence-UCTA1977,s2 621 Dealing as consumer or on the other's written standard terms of business - UCTA 1977, s 31 622 Indemnities-UCTA 1977, s 4 625 Guarantees ofconsumer goods-UCTA 1977, s 51 625 Goods-UCTA1977,ss61and72 626 Secondcontracts-UCTA1977,slO 627 'Dealsasconsumer'-UCTA1977,sl2 627 Therequirementofreasonableness-UCTA1977,sll 630 Misrepresentation Act 1967, s31 636 The section 636 Scope of the section 637 Unfair Terms in Consumer Contracts 638 Basic scope 638 Enforcement 640 Excluded terms 643 . • - 'Consumer' 644 'Seller or supplier' 646 Contracts concluded between a seller or a supplier and a consumer 646 Terms not individually negotiated 648 Terms 649 The 'core' exclusion 650 Plain intelligible language 655 Construction 658 Unfair terms 658 The'grey'list and other unfair terms 667 Choice of law clauses 676 xx Contents

CHAPTER 4 Vitiating Factors 677 Malcolm Clark A Capacity 677 Minors 677 Minors' contracts 678 Minors' contracts for necessaries 678 Minors'executory contracts for necessaries 681 Contracts binding until avoided 686 Other contracts 689 The mentally disordered 693 Corporations 694 Introduction 694 Companies incorporated under the Companies Acts 694 Corporations incorporated by special statute 696 B Misrepresentation 697 Introduction 697 Misrepresentation 697 A positive statement 698 Non-disclosure 701 A statement of fact 711 Fact not intention 711 Fact not opinion 713 Factnotlaw 716 The maker of the misrepresentation 718 Trueorfalse 719 Substantial truth 720 Inducement 721 Materiality 721 Inducement in fact 722 The degree of inducement 724 The negligent representee 726 Remedies 728 Types of misrepresentation 728 The range of remedies 728 Misrepresentation as a defence 729 Rescission of the contract 729 The relevance of fraud 729 The nature of rescission 730 The mode of rescission: election 731 The effect of rescission: retroactivity 731 Limits on rescission 733 Statute 733 Affirmation 734 Lapse of time 738 Performance 741 Third party rights 744 Contractual bars to rescission 745 Damages 746 Damages for fraud 746 Damages for innocent misrepresentation 754 Contents xxi

Damages for non-disclosure 754 Damages for negligent misstatement under the Misrepresentation Act s2(l) 756 : Damages for negligent misstatement at common law 757 Exemption clauses 760 The remedies compared 762 Damages under Misrepresentation Act 1967, s 2( 1) and s 2(2) 762 Limitation 763 Remedies for fraud and for negligence under Misrepresentation Act 1967, s2(l) 764 C Mistake 766 Introduction 766 The categories and terminology of mistake 766 Public policy 768 Common mistake 770 The assumption of risk 770 Fault 774 Operative common mistake: common law 774 Operative common mistake: equity 782 Remedies 783 Mutual mistake 784 The assumption of risk 784 Types of mistake 784 Operative mistakes 787 Essential mistake 792 Mistakes about credit: the risk of fraud 795 Other mistakes: personal contracts 802 Non est factum: documents mistakenly signed 804 Introduction 804 Consideration of third parties affected 806 Essential mistake about the kind of document 807 Assumption of risk 809 Care 811 Rectification 815 The nature of rectification 815 Proof: onus and form 816 Common agreement 817 Mistake 817 Enforcement 825 D Duress and Undue Influence 825 Introduction 825 Duress 826 Duress: introduction 826 Illegitimate pressure 827 Effective pressure 832 Remedy 836 Undue influence: introduction 837 The nature of undue influence 837 The source of undue influence 844 Unfairness 844 Rebutting the presumption 848 Abuse of bargaining power: extortion 854 xxii Contents

Inequality of bargaining power 854 Sureties unduly influenced 855 Expectant heirs 856 The victims of circumstance 857 Limits on relief 859 Affirmation 859 impossible 860 Third party rights 862

CHAPTER 5 Illegality and Public Policy 863 Andrew Phang A Introduction 863 B The Plan of this Chapter 865 C Framework and Concepts 866 Introduction 866 Statute and common law 867 Express versus implied prohibition 868 The nature and scope of public policy at common law 868 The consequences of illegality or contravention of public policy 869 Are there degrees of illegality? 869 D Statutory Illegality 872 The critical role of construction 872 Express prohibition 875 Implied prohibition 881 General principles 881 Formation and performance 887 The relevance of the state of mind of the parties 891 E Gaming and Wagering Contracts 892 The definition of a wagering contract 892 The effects of a wagering contract 894 Between the parties themselves 894 Between principal and agent 899 Securities given in relation to wagering contracts 901 The effect between lender and borrower 903 Restitution for third parties 905 Some recent developments and proposals for reform 906 F Illegality and Public Policy at Common Law 910 Introduction 910 Contracts prejudicial to the administration of 913 Contracts to deceive public authorities 930 Contracts that are liable to corrupt public life 934 Contracts prejudicial to the public safety 935 Contracts to commit (or involving) a crime, or fraud 937 Contracts promoting sexual immorality 938 Contracts prejudicial to the status of marriage 942 Contracts to oust the of the 945 Contracts restricting personal liberty 950 G Contracts in Restraint of Trade 950 Introduction, history of the doctrine, and general principles 950 Contents xxiii

A preliminary point - the 's relative liberality in the sale of business context 964 Sale of a business 965 Contracts of employment 968 Trade secrets 970 Trade connection 972 Exclusive dealing agreements - with particular reference to solus agreements 974 Exclusive service agreements 978 Restraints arising from combinations for the of trade relations 980 A hybrid illustration 982 Severance 983 H The Regulation of Competition-An Introduction 984 I The Regulation of Competition- The effect of the Treaty of Rome 985 J The Regulation of Competition - The Competition Act 1998 994 The Background and Introduction 994 The Chapter I Prohibition 997 The Chapter II Prohibition 1000 Other provisions 1003 The effect of the Treaty of Rome 1005 K The Regulation of Competition - Monopolies, Mergers and Anti-competitive Practices 1005 The Legal Position Prior To the Coming into Force of the Enterprise Act2002 1005 The Legal Position Under the Enterprise Act 2002 1005 Introduction and overview 1005 The Enterprise Act 2002 and the Competition Act 1998 1007 The Office of Fair Trading 1008 The Competition Appeal 1009 Mergers 1009 Market investigations 1013 The Competition Commission 1016 Cartel offence 1016 Directors'disqualification 1017 Enforcement of certain consumer legislation 1018 L The Consequences of Illegality 1019 Introduction 1019 Under the contract itself 1019 The general rule 1019 The state of mind of the parties 1021 The status of subsequent or collateral contracts 1025 Recovery of benefits conferred or transferred under an illegal contract 1026 Introduction 1026 Where the parties are not in pan delicto 1029 Recovery under an independent cause of action 1033 Recovery based on repentance or timely repudiation 1043 Equitable exceptions? 1046 M Severance 1047 Introduction 1047 General principles 1049 Severance of whole or entire covenants 1050 xxiv Contents

Severance within covenants (the 'blue pencil test') 1051 N The Proof of Illegality 1054 O Conflict of 1055 P Reform 1056

CHAPTER6 Third Parties 1065 John Adams, Greg Tolhurst, Michael Furmston A Privity 1065 The structure of this section 1065 Part I-The privity rule 1065 Introduction 1065 History of the rule 1065 Privity in comparative perspective 1067 Who are the parties to the contract? 1071 Types of privity situation 1073 Part II - Exceptions to the privity rule 1075 Introduction 1075 Common law exceptions 1076 Statutory exceptions other than the Contracts (Rights of Third Parties) Actl998 1098 Part III -Contracts (Rights of Third Parties) Act 1999 1105 Introduction 1105 Some preliminary issues 1107 The C(RTP)A 1999 1112 Conclusion 1128 B Privity of Contract under the 1130 The place of agency in English law 1130 Introduction 1130 The agency directive 1133 Formation of agency 1135 Introduction 1135 Express appointment: formal requirements for appointment 1136 Agency by estoppel 1141 Ratification 1143 Agency of necessity 1152 Presumed agency in the case of co-habitation 1154 Position of principal and agent with regard to third parties 1154 Introduction: derivation of authority 1154 Extent of authority 1155 Construction of authority 1156 Relations between the principal and third parties 1164 Contractual relations 1166 Tortliability 1182 Criminal liability 1185 Relations between Agent and Third Persons 1186 Liabilities of agent 1186 Rights of agent 1195 Relations between principal and agent 1197 Contents xxv

Introduction 1197 In general 1197 Duties of agents to principals: at common law 1198 Duties of agents to principals under the Commercial Agents (Council Directive) Regulations 1993 1215 Rights of agent against principal 1215 Rights of agent against principal under the Commercial Agents (Council Directive) Regulations 1993 1228 Termination of agency 1228 In general 1229 Irrevocable authority 1229 Termination by act of parties 1232 Termination by operation of law 1237 Notice to third persons 1240 Effect of termination 1242 Agent's right to compensation or indemnity 1242 Entitlement to commission on transactions concluded after termination of the agency contract 1244 Apportionment of commission between new and previous commercial agents 1245 When commission is due, and the last date for payment 1245 Extinction of right to commission 1245 Information as to commission due 1245 Restraint of trade 1246 C Assignment 1246 Introduction 1246 Subject-matter of section 1246 Classification of assignments 1246 Concept of assignment 1247 Assignment and privity of contract 1248 Definitions 1248 Assignment distinguished from other matters 1252 Formalities for assignment 1255 The assignment of legal interests 1255 The assignment of equitable interests 1266 D Assignment of Contractual Rights 1271 Assignment of contractual debts 1271 Assignment of other contractual rights 1271 Assignment of future property 1273 Restrictions on Assignment 1278 Burden not assignable 1278 Contract provisions dealing with assignment 1281 Personal contractual rights and obligations 1284 Personal rights 1285 Personal obligations 1288 Personal rights and obligations: some specific transactions 1290 Varying the obligations of the obligor 1298 Public policy and illegality 1301 Effect of assignment on the position of the parties 1304 E Joint Obligations 1310 Definitions and problems 1310 What determines whether an obligation is joint or joint and several? 1311 xxvi Contents

More than one debtor 1311 Who must be parties to action? 1311 Effect of against one joint debtor 1312 Settlement with one joint debtor 1312 Survivorship 1312 Defences available to one joint debtor 1313 Special position of contracts of guarantee 1313 Contribution between joint debtors 1314 More than one creditor 1314 Classification of obligation 1314 Possible problems with consideration 1314 Who must be parties to the action? 1315 Settlement with one joint creditor 1315 Survivorship 1316

CHAPTER 7 Termination 1317 John Carter A Introduction 1317 The concept 1317 Bases for termination 1317 Relevance of election 1318 B Termination by Agreement 1318 Termination, rescission and variation 1318 Express agreement 1319 Implied agreement 1320 C Contractual and Statutory Rights of Termination 1322 Contractual rights 1322 D Termination for Breach 1323 Breach of condition 1323 Issue of construction 1323 Express agreement 1324 Commercial contracts in general 1325 Relevance of form and structure 1326 Likely consequences of breach 1327 Breach of intermediate term 1328 Terms which are intermediate 1328 Repudiation 1331 Introduction 1331 Scope of the doctrine 1333 Basis for the doctrine 1333 Express repudiation 1334 Implied repudiation 1334 Inability toperfor m 1336 Relevance of bona fides 1337 Position where repudiation accepted 1338 Position where repudiation not accepted 1338 Delay in performance 1340 Time of the essence 1340 Time not of the essence 1343 Contents xxvii

Restrictions on right of termination 1345 Requirement of election 1345 Affirmation of the contract 1349 Other restrictions 1353 Consequences of termination for breach 1358 General 1358 Terms operating after termination 1359 Claims for damages 1361 Recovery of sums fixed by the contract 1363 Restitution 1367 E Termination by Frustration 1372 General 1372 Concept 1372 Frustration under contractual term 1373 Scope of the doctrine 1373 Application of the doctrine 1375 Basis for the doctrine 1376 Proof of frustration 1379 Impossibility 1379 Frustration of commercial venture 1381 Delay 1382 War 1384 Illegality 1385 Foresight and terms dealing with frustration 1386 Foresight of the event 1386 Terms dealing with frustration 1387 Self-induced frustration 1388 Concept and onus of proof 1388 Elements 1389 Consequences of frustration 1391 Discharge of parties 1391 Terms operating after frustration 1393 Claims for damages following frustration 13 94 Recovery of sums due prior to frustration 1394 Restitution at common law 13 95 Restitution under statute 1397

CHAPTER 8 Remedies for Breach of Contract 1401 Roger Halson A General 1401 Overview 1401 Other definitions 1402 Compensatory aim 1403 General 1403 The three measures of damage 1404 Loss must be shown 1406 Burden of proof 1406 Loss of a chance 1408 The net loss principle: general 1410 xxviii Contents

Net loss and causation 1411 Net loss and compensating advantages: advantages deriving from the claimant's own actions 1411 Special cases: rights of recoupment from third parties 1413 Net loss and mitigation 1414 Loss and foreign money liabilities 1415 The minimum performance principle 1415 Awards of damages must be final 1419 Nominal damages 1421 Extra compensatory damages 1422 Exemplary damages 1422 Aggravated damages 1424 The requirement of a property interest 1424 The Dunlopv Lambert exception 1424 The action in debt 1427 Concurrent liability in contract and tort 1427 Taxation 1429 Interest 1430 The common law award of interest at 1431 The general statutory power to award of interest at trial 1431 Commerical debts 1432 Interest on judgment debts 1432 B Unliquidated Damages 1432 The time of assessment 1433 Breach not discoverable with reasonable diligence 1434 Inability to mitigate 1434 Insistence on performance 1434 Anticipatory breach 1435 Three general points 1436 The measures of damage 1436 The expectation measure 1436 The reliance measure 1454 The restitution measure 1460 The relationship between the measures of damage 1470 Limits upon recovery 1473 Causation 1473 Contributory negligence 1475 Remoteness 1478 Mitigationl 1488 Failure to pay a sum of money 1493 C Liquidated Damages and Penalties 1494 General 1494 Policy behind the rule against penalties 1494 Historical origin 1496 Lord Dunedin's guidelines 1496 The basic test 1497 An implicit assumption 1497 An explicit assumption 1500 The disproportion principle 1501 What loss? 1503 Timing 1503 Objective or subjective? 1503 Contents xxix

The wording of the clause 1504 Sum payable on one of several events 1504 Legal effect; liquidated damage clause 1505 Legal effect; penalty clause 1506 Actual loss exceeds sum stipulated 1506 Unfair Terms in Consumer Contracts Regulations 1999 1508 Evasion of the jurisdiction 1508 Deposits and advance payments 1509 Deposits 1510 Relief against the forfeiture of advance payments 1512 D Damages and Privity 1514 Contracts (Rights of Third Parties) Act 1999 1515 E Literal Enforcement 1515 General 1515 Overview 1515 Specific performance 1521 Nature of remedy 1521 Restrictions upon the availability of specific performance 1526 Damages are an adequate remedy 1526 Constant supervision 1534 Contracts of personal service 1535 Other restrictions upon the availability of specific performance 1539 Injunction 1545 General 1545 Specific performance, injunctions and privity of contract 1549 Beswick v Beswick and specific performance 1550 Injunction 1550 F Extinction of Remedies 1550 General 1550 Policy 1551 Reform 1551 The basic periods 1552 Contract 1552 Action on a specialty 1552 Restitution 1553 1554 Personal injury and death 1554 Contribution 1555 Employment 1555 Special cases 1555 Concurrent liability in contract and tort 1556 Commencement of period and longstop provisions 1559 Accrual of cause of action: contract 1559 Date of knowledge and personal injury 1561 Extension of time 1563 Personal injury 1563 Fraud, concealment and mistake 1564 Disability 1566 Acknowledgment or part payment 1567 Agreement and estoppel 1569 The effect of being,'out of time' 1569 Limitation and equity 1569 xxx Contents

Laches 1570 Acquiescence 1570

Index 1571