Analysis of Contract Law Principles: Consideration and Case Study

This assignment delves into the core principles of English contract law, commencing with an introduction to contract formation and essential elements. It then undertakes a critical analysis of the law governing consideration, particularly in part-payment of debt scenarios, referencing the landmark case of Foakes v. Beer. The analysis dissects the court's reasoning and the implications of the judgment. The assignment further extends to a case study involving Abdul, a van driver, advising him on his rights within the framework of contract law. The analysis considers the impact of different scenarios, specifically whether Abdul was driving his work vehicle or a private vehicle. The document concludes with a comprehensive overview of the key concepts and their practical applications in contract law.

ENGLAND LAW OF
CONTRACT

INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Introduction to contract................................................................................................................4
TASK 1............................................................................................................................................5
Critically analyze the current position of the law governing consideration in part- payment of
debt case in reference to Foakes v Beer.......................................................................................5
CONCLUSION of first task........................................................................................................8
TASK 2............................................................................................................................................8
Advise Abdul as to his rights in contract law. Would it make any difference to your advice if
Abdul was had not been at work and had been driving his own private vehicle.........................8
Applicability................................................................................................................................9
CONCLUSION of second task..................................................................................................10
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................12

INTRODUCTION
Contract laws are the laws which deal with formation of agreements between two or more
than two parties. Such agreements are related towards common goal to be achieved by both the
parties. These laws justify those rules and regulations which are required to form an agreement.
An agreement can be related to any kind of activity regarding business or transaction within it.
Aspects of these laws are wide as they help in making an agreement turned into contract. Nature
of contract law is dynamic as it can influence relationship between parties to be contracted. This
file is based upon contract laws and father it is divided into two parts. First talks about a scenario
and obiter dictum. Case laws are being explained in this context. Then in second part Issues,
relevant law and conclusion is going to be used to solve an case study.
MAIN BODY
Introduction to contract
Contract laws are those laws which are helpful in dealing with legal stability within an
agreement. These makes an agreement turned into contract. Contract laws are more helpful in
forming of legal relation between parties forming a contract. This law makes an agreement valid
within the eyes of law. It can be justified further with the statement that “Agreements can be
contract but all contracts cannot be agreement which means that various elements are there
which are required in the formation of contract and they are offer, acceptance, legal
consideration and intention of creating a relationship. A contract can be expressed and implied
which means that it can be in written an oral form. Further these elements are being explained as
follows:1 (Julia Cressey, 2016)
Offer and acceptance: An offer is the starting point of a contract. For creation of contract there
has to be offer and a well defined offer by one party. Also there should be clear acceptance of the
same party. While making an offer the offering party has to specify the time limit over the
validity of a contract. Acceptance of an offer and means to fully acceptance, what is being
offered and this gives validity to an offer in its formation.
1 Julia Cressey, 'Ewan Mckendrick,Contract Law' (2016) 48 The Law Teacher.
'The Laws Of England' (2018) 14 The Virginia Law Register.

Intention to create legal relationship: In an contract it is required by the parties to have legal
intention means the basis upon which an contract is formed should not be illegal. Betting,
smuggling or any other illegal activity cannot be bound under an contract. Due to the absence of
legal content in it. If such contract is formed then it can be declared void by the court.2
Free consent: Free consent is an important thing for validation of contract. Free consent means
not part of the contract should be remained undisguised. Under coercion, influence, fraud
misrepresentation and mistake free consent is not given.
Lawful Consideration: There is required to have a valid consideration for forming an legal
contract. Consideration is bound to be given by both the parties. It has to be granted over the
agreed rules and regulations that has been existing between two parties. Consideration can be
given at any kind of things that has valued regarding the contract (Jonathan Boyarin, 2017).
Not declared void or illegal: Agreement that is able to make all kinds of legal conditions for a
valid contract should only be considered as a void contract of law in force. This means that any
contract can be revoked if at any point of time a condition of a contract has been violated. In
other words it can be said that a person performing a contract should not be below the age of
sixteen. As minor cannot form and contract, persons with unsound mind cannot come into
contract.
TASK 1
Critically analyze the current position of the law governing consideration in part- payment of
debt case in reference to Foakes v Beer
Statement to be analyzed:
“Modern litigation rarely raises truly fundamental issues in the law of contract. This appeal is
exceptional. The second is whether an agreement whose sole effect is to vary a contract to pay
money by substituting an obligation to pay less money or the same money later, is supported by
consideration.”
2 Jonathan Boyarin, 'Law, Literature, And The Resurrection Of Contract' (2017) 24 Law &
Social Inquiry.

“The reality is that any decision on this point is likely to involve a re-examination of the decision
in Foakes v Beer. It is probably ripe for re-examination. But if it is to be overruled or its effect
substantially modified, it should be before an enlarged panel of the court and in a case where the
decision would be more than obiter dictum.”
The above statement is based upon two issues Modern litigation rarely raises truly
fundamental issues in contract law and second issue is whether an agreement whose sole
effect is to vary a contract to pay money by substituting an obligation to pay less money or
the same money later, is supported by consideration.3
Both these issues are part of an case in which Supreme Court has marked its judgment and the
case is Rock Advertising Ltd v MWB Business Exchange Centres Ltd in this case the
Supreme Court has describe about its decision in the case that ‘truly fundamental in the law of
contract. It gives a much needed clarity in relation to the effectiveness of modification clause. As
rock has failed to pay the regular amount that was asked by MWB and has also made a phone
call regarding the changes that is required to be made within the payment schedule. When MWB
was about to end the relationship because of the payment not done by Rock. The court said that
the parties had varied the contract by agreeing the amended payment schedule over an phone
call. The contract in an question contained the term that ‘all variations to this License must be
agreed and set out in writing and signed on behalf of the parties before they are brought
into effect.
Firstly the Court of Appeal has agreed with the facts that has been presented by Rock’s and
held an valid oral agreement of altering of payment over the phone call. It was held by the court
that both the parties were free to move and has also talked over phone regarding it. The court
commented that as obligation can be created over the will it can vary as per the situation. Later
on the Supreme Court overruled the judgment passed by Court of Appeal. Supreme court said
that no oral modification clause has been effective. It has been found that contract has not been
varied and Rock remained in the arrears.
3 Ewan McKendrick, 'Contract Law And Practice: The English System And Continental
Comparisons. By Michael H. Whincup. [Deventer: Kluwer. 1990. 267 Pp. ISBN 90-
6544-448-3 Dfl.150/$95 (Hbk), Dfl.80/$51 (Pbk)]' (2020) 41 International and
Comparative Law Quarterly.

In MWB v Rock Advertising the old debate about whether practical benefit should be enough to
support a promise to accept less is reborn. The law has made a distinction between decreasing
pacts and increasing pacts. Each body of law is internally coherent but the difference between the
rules applied to both situations is not. The law is clear. Agreements to accept less require accord
and satisfaction to bind. Further in the case of Foakes v Beer:4
Facts: The respondent, Beer, has given loan to appellant Dr Foakes of £2090. When he was not
able to pay loan, an judgment was passed in her favor over recovery of amount. The pair then
entered an agreement orally ‘in consideration’ of an initial payment of £500 and ‘on condition’
of six-monthly payments of £250 until the whole amount was repaid. She would not enforce her
judgment against him. Foakes made these regular payments until the entire amount was repaid.
As he had not paid any interest on the judgment debt, which Beer was entitled to under statute.
Total amount to be paid over interest is £302.
Issues: The respondent was that the promise has not to be enforced and judgment is not
supported under good consideration. Due to appellant had followed what he was asked to as per
the contractual obligation. The respondent relied on the rule in Pinnel’s Case, that part payment
of a debt could not be satisfaction of the whole
Held: The House of Lords held that the respondent’s promise not to enforce the judgment was
not binding as Dr Foakes had not provided any consideration. Their Lordships approved the rule
in Pinnel’s Case. Lord Selborne said that there had to be ‘some independent benefit, actual of
contingent, of a kind which might in law be a good and valuable consideration’. Lord
Blackburn expressed some dissatisfaction with this, noting that by accepting less a creditor could
in some cases gain a practical benefit
Obiter dictum
Is a Latin phrase which means “which is said in passing” an incidental statement.
Specifically in law has been referred to as passage in a judicial opinion that is not necessary for a
decision of the case before the court. Such kind of statement lacks the force of precedent that it
4 Earl of Halsbury, 'The Laws Of England, Being A Complete Statement Of The Whole
Law Of England' (2020) 9 Michigan Law Review.

must be an opinion that has to be formed and is necessary for the decision of a particular case
This can be understood through an example that is a young man willfully murdered his
grandfather to prevent his revoking a will, the court held that the beneficiary was not entitled to
the legacy which the will provided for him, saying that the law will not permit one “to take
advantage of his own wrong or to found any claim upon his own iniquity, or to acquire property
by his own crime.”5 In a subsequent case, involving a legality issue, who had negligently caused
the testator’s death in an automobile accident, the same result would not necessarily follow. The
decisions of this could be free to be distinguished upon the facts and limit the broad dictum of
the case. In other words it can be said that obiter dictum helps in solving of problem that is
challenging legal objective of an case. Under such circumstances facts of the case are being
studied and judgments are being observed given by the judges in landmark cases. This helps in
providing a clear picture over the reality of the case presented. This also leads towards
maintaining of transparency with the justice procedure followed in courts of UK.
CONCLUSION of first task
From the above information it can be concluded that the concept of contract is based
upon formation of agreements and to form an legal contract all elements of it is required to be
present within the agreement to make it an justified contract. Further a statement has been give
and to justify it a case law has been explained. Then Orbiter dictum has been explained.
TASK 2
Advise Abdul as to his rights in contract law. Would it make any difference to your advice if
Abdul was had not been at work and had been driving his own private vehicle.
Case Scenario:
Abdul is an van driver who has transports machinery in the West Yorkshire area. One
day, while he was transporting a number of replacement parts for wheat thresher, his van broke
down. Abdul called his local garage Harrogate Automotive Repairs (HAR). Immediately an
mechanic has been dent out Belinda, a mechanic to fix the vehicle. After she examined the van
on the side of the road, Belinda decided that the van would need to be towed to the garage in
order for it to be repaired. Abdul agreed upon it Belinda began the tow back on the tow truck. On
the back of the tow truck is a sign that reads “HAR shall not be responsible for any loss,
5 Genevieve Helleringer, 'Comparative Remedies For Breach Of Contract By Nili Cohen And
Ewan Mckendrick (Eds)' (2017) 69 Modern Law Review.

damage or injury suffered by our clients or to their property during the towing process.
The client is responsible for any damage to our vehicle caused during towing.” As the van
was being on the back of recovery vehicle the winch rope snapped and the van rolled backed
making Abdul to ground and breaking his hip in this process. Also the van hit a tree behind to
tow truck and suffered loss of £3,000 worth of damage. This made Abdul take holidays for 6
months due to injury he suffered.6
. Issue:
As the facts of the case says that a contract has been formed between Abdul and Belinda.
They both agreed over the suggestion of tow the vehicle given by Belinda. So, according to the
fact issue that has been raised is regarding damages and contract binding. Contract exists in this
in a manner that orally it has been confirmed by Belinda that van is required to be towed and
Abdul has agreed over it all this has lead to an formation of contract. The other part of the
scenario defines that he is a van drives to transfer machinery. This means that he works over
there upon contractual basis. Also situation between Abdul and Belinda consists of basic
elements of contract offer, acceptance, consideration that gives birth to a legal contract. So,
issues raised are that weather contract is binding, formed or not.
Relevant Laws:
As the facts of the case says that a contract has been formed between Abdul and Belinda.
Due, they both agreed to tow the vehicle. So, according to me the relevant law that has to be
applied is contract law under which an obligation is there that is Discharge by frustration. A
contract can be frustrated only when there is existence of changed circumstances, after contract
has been formed. In this no fault is thereof either of the parties. That has rendered the contract
either impossible to perform or deprive the contract of its commercial purpose. In which an
contract has been found to be frustrated and each party has been discharged from future
obligations under the contract and neither party may sue for breach. All allocation of loss is
decided in the law reforms of (frustrated contract act) . Also damages are going to be applied in
this as Abdul can seek for damages. Damages in a contract are that kind of legal remedy that has
been available for breach of contract. Damages are an award of money or compensation of
innocent party. The primary purpose of damage in under this law is to make injured party in the
position they would have been in had the contract been performed.
Applicability
Relevant cases
Taylor v Caldwell
6 Ewan McKendrick, 'REVIEWS' (2019) 55 The Modern Law Review.

The claimant hired out a music hall in Surrey for the purpose of holding four grand
concerts. The claimant went to great expense and effort in organizing the concerts. However, a
week before the first concert was due to take place the music hall was destroyed by an accidental
fire. The claimant sought to bring an action for breach of contract for failing to provide the hall
and claiming damages for the expenses incurred. In this case it was held by court that the
claimant's action for breach of contract failed. The contract had been frustrated as the fire meant
the contract was impossible to perform.7
Condor v Baron Knights
in this case it has been agreed that an 16 year old has agreed by contract to play the drums for
Baron Knights for 7 nights per week for 5 years. Also the claimant suffered through a mental
break down and was told by the doctor that he should not perform more than 4 nights per week.
Also the band has been dismissed by him. Brought a claim for wrongful dismissible. It was held
by the court that claimant’s action was not successful as his medical condition made it
impossible for him to perform his contractual obligation and thus contract was frustrated.
Nicholl and Knight v Ashton, Eldridge &Co
By contract the parties agreed that cargo of cotton seed was to be shipped from Egypt to England.
Contract specified the ship, the box that was carrying the cargo. The ship got damaged and was in for
repairs when the contract was due to be performed. It was held by the court that by naming the exact ship
that was suppose to carry the cargo within the contractility agreed period ‘Contract Law And Practice:
The English System And Continental Comparisons (Michael H. Whincup. 2020).
These cases are going to be applicable under this situation in a manner that contract has taken place and
due to uncertain circumstances the contract was not applicable. These situations have been explained
under these cases. So, all the cases related to this have been explained. Also under this cases various
situation has been explained that which has to deal with situations related to business contract. As per the
facts of the case says that there has been an accident that has taken place while the delivery was being
made. So, above cases that most important case to be applied with the situation is Taylor v Caldwell
because in this case also fire has destroyed the auditorium because of which the concert cannot
take place and similarly in this situation the van got damaged due to which no further delivery
can be made. As the contract was not proceeded in time it become a contract of frustration
Chinwoo Kim (2017).
CONCLUSION of second task
From the above case study it has been cleared that Abdul has entered into a contract of
frustration with Belinda as the sign has identified no responsibility. Also further cases that have
7 Ewan McKendrick, 'Contract Law And Practice: The English System And Continental
Comparisons. By Michael H. Whincup. [Deventer: Kluwer. 1990. 267 Pp. ISBN 90-6544-448-3
Dfl.150/$95 (Hbk), Dfl.80/$51 (Pbk)]' (2020) 41 International and Comparative Law Quarterly.

been explained are able to define that contractual agreement that has taken place between that
parties is oral. The main issues are related to contract of frustration in which due to uncertain
circumstances takes place. Then relevant cases have been explained regarding the contract. Also
there relevancy has been told with the situation.8
CONCLUSION
From the above file it can be concluded that the concept of contract laws which says that
an contract has been formed between two parties. After the basics of contract has been explained
and also elements related to it has been told. Then a statement has been justified with two
relevant cases. Further an case scenario has been told issue, relevant cases and conclusion has
been given about the laws that has used in the case and also justification has been provided over
the cases scenario.
8 Earl of Halsbury, 'The Laws Of England, Being A Complete Statement Of The Whole
Law Of England' (2020) 9 Michigan Law Review.

REFRENCES
Books and journals
Chinwoo Kim, 'DCFR And European Consumer Contarct Law' (2017) 33 HUFS Law Review.
Earl of Halsbury, 'The Laws Of England, Being A Complete Statement Of The Whole Law Of
England' (2020) 9 Michigan Law Review.
Ewan McKendrick, 'Contract Law And Practice: The English System And Continental
Comparisons. By Michael H. Whincup. [Deventer: Kluwer. 1990. 267 Pp. ISBN 90-
6544-448-3 Dfl.150/$95 (Hbk), Dfl.80/$51 (Pbk)]' (2020) 41 International and
Comparative Law Quarterly.
Ewan Mckendrick, 'Contract Law Today: Anglo-French Comparisons. Edited By Donald Harris
And Denis Tallon. [Oxford: Clarendon Press. 1989. Xxvii + 414 Pp. £40] - Remedies For
Breach Of Contract: A Comparative Account. By G. H. Treitel. [Oxford: Clarendon
Press. 1989. Xliv + 422 Pp. £45]' (2016) 39 International and Comparative Law
Quarterly.
Ewan McKendrick, 'Doctrine And Discretion In The Law Of Contract Revisited' (2019) 7 The
Chinese Journal of Comparative Law.
Ewan McKendrick, 'REVIEWS' (2019) 55 The Modern Law Review.
Genevieve Helleringer, 'Comparative Remedies For Breach Of Contract By Nili Cohen And
Ewan Mckendrick (Eds)' (2017) 69 Modern Law Review.
'Indemnity. Contract. What Constitutes. Hilliard V. Newberry Et Al., 68 S. E., 1056 (N. C.)'
(2019) 20 The Yale Law Journal.
Janet O'Sullivan, 'Contract Damages For Failed Fun—Taking The Plunge' (2019) 54 The
Cambridge Law Journal.
JH Dalhuisen, 'Transnational Commercial Law: Text, Cases And Materials By Roy Goode,
Herbert Kronke And Ewan Mckendrick [OUP, Oxford, 2007, 832 Pp, ISBN 978-0-19-
925166-7, £42 (P/Bk)]' (2018) 57 International and Comparative Law Quarterly.

Jonathan Boyarin, 'Law, Literature, And The Resurrection Of Contract' (2016) 24 Law & Social
Inquiry.
Jonathan Boyarin, 'Law, Literature, And The Resurrection Of Contract' (2018) 24 Law & Social
Inquiry.
Jonathan Boyarin, 'Law, Literature, And The Resurrection Of Contract' (2017) 24 Law & Social
Inquiry.
Julia Cressey, 'Ewan Mckendrick,Contract Law' (2016) 48 The Law Teacher.
'The Laws Of England' (2018) 14 The Virginia Law Register.