Contract Law: Formation, Performance, and Remedies
The anatomy of a binding agreement
Contract questions test whether an enforceable obligation arose and, if so, what remedy follows. Work through offer, acceptance, consideration, intention to create legal relations, capacity, and legality. Then test vitiating factors: misrepresentation, fraud, mistake, undue influence, and coercion. Finally, examine performance, breach, and remedies.
Concepts you must command
Understand the difference between an invitation to treat and an offer; the effect of counter-offers; communication of acceptance; certainty of terms; and the parol evidence approach to written contracts. Know the rules on liquidated damages versus penalties, mitigation of loss, specific performance, and rescission. Understand conditions, warranties, and the consequences of frustration.
Traps that appear in questions
- Treating an advertisement as an offer rather than an invitation to treat.
- Assuming consideration must be adequate rather than merely sufficient.
- Confusing void, voidable, and unenforceable contracts.
- Awarding expectation damages where only reliance loss is proven.
- Ignoring an entire agreement clause when extrinsic statements are alleged.
Rule of thumb
Use a three-step scaffold: (1) Is there a contract? (2) Has it been broken or vitiated? (3) What remedy restores the claimant? Answer each step before moving on.
Worked example
A supplier agrees to deliver goods by a fixed date but delays, causing the buyer to lose a resale profit. The analysis: the date is a condition, breach is established, the buyer may terminate and claim expectation damages equal to the lost profit, subject to mitigation and remoteness. A penalty clause demanding triple the contract price would be struck down as punitive.