Introduction

• Author: John D. McCamus
• Pages: 1-28

1

CHAP TER 1

INTRODUCTION

A. OVERVIEW

The term “contract” is often used in common parlance to refer to a

written document that records an en forceable agreement between two

parties. Although law yers do often use the term in this fashion, the

term is used in a more general way in legal d iscourse as a reference to

any enforceable promise. This broader usage is neces sitated by the fact

— surprising to some who are new to the subject — that oral prom-

ises may be enforceable in certain circum stances, notwit hstanding t he

fact that they are not recorded in written form.1 As a general matter,

promises, whether oral or written, are en forceable if they are included

within a “bargain” between two parties. The term “bargain” does not

capture the entire subject matter of contract law, however, because it

is also possible for un ilateral or one-sided promi ses to be enforceable

if they are recorded in writing in a particular formalized fashion.2 The

term “promise” signals t hat the subject of our attention consists of en-

forceable commitments with resp ect to the future. A purely contem-

poraneous exchange or barter of goods in which neither par ty gives

an undertaking of any kind with respect to t he subject matter of the

exchange does not include a potentially enforceable promise and is

1 As we shall se e, a limited number of typ es of agreements must be recorde d in

writin g if they are to be legally enforce able. See Chapter 6, Section B.

2 See Chapter 7, Section C.

THE LAW OF CONTR ACTS2

therefore not a contract in the requisite sense. Furt her, statements of

present fact do not constitute promises though, as we shall see,3 the

distinction between repres entations or statements of fact, on the one

hand, and promises, on the other, is both di ff‌icult to draw and highly

manipulable. This is not to say th at a false statement of current fact is

of no legal interest.4 It is merely to say that a statement of current fact

is not a promise in the requisite sen se. As a legal term of art, “contracts”

refers to the universe of legally enforceable promises. The law of con-

tracts, then, is t he law relating to the enforcement of promises.

1) The Plan of This Work

A brief survey of the content of the law of contracts m ay be accom-

plished by outlining the plan of this work. This volume is subdivided

into six parts dea ling, in turn, with (1) the formation of agreements,

(2) the rules for recognizing their enforceability at law, (3) grounds

for setting aside or vitiating ag reements that would otherwise be en-

forceable, (4) performance and breach of contracts, (5) principles of

interpretation of agreements and (6) the remedies available for breach

of contract.

A threshold question for the law of contracts is to determ ine whether

the parties have reached agreement on the particular s of the promises

that are sought to be enforced. A variety of issues relating to the forma-

tion of contracts are exami ned in Part One of this volume. The basic

rules for determining whether t he parties have reached an agreement

on certain term s — the rules of “offer and acceptance” — are examined

in Chapter 2. Even though the parties may h ave reached a genuine

agreement or consensus ad idem on certain matters, the terms of their

agreement, if it is to be enforceable, must deal with suff‌icient matters

to constitute a valid agreement. Otherw ise, the agreement will fail for

incompleteness or uncertainty. This issue is considered in Chapter 3.

Further, even though the parties reach consensus on suff‌icient matters

to constitute a valid agreement, it may not have been their intention

to create an enforceable agreement. The relevancy of such an intent is

explored in Chapter 4. In recent years, some courts h ave suggested the

possibility that pa rties negotiating toward an agreement may be subject

to a duty to bargain in good faith. The possible content of such a duty

and the current status of any such doctrine are exami ned in Chapter 5.

3 See Chapter 18, Section B.

4 Thus, the inducement of contr acts by the making of fa lse statements may give

rise to cert ain remedies. See Chapter 10.