Introduction

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

1

CHA PTER 1

INTRODUCTION

A. OVERV IEW

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

written document that records an enforceable 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 discourse as a reference

to any enforceable promise. This broader usage is necessitated by the

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

ises may be enforceable in certain circumsta nces, notwithstanding the

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

promises, whether oral or written, a re enforceable if they are included

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

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

is also possible for unilateral or one-sided promises to be enforceable

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

term “promise” signal s that the subject of our attention consists of

enforceable commitments with res pect to the future. A purely contem-

poraneous exchange or barter of goods in which neither party gives

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

exchange does not include a potentially enforceable promise and i s

1 As we shall see , a limited number of type s of agreements must be recorded in

writing i f 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. Further, statements of

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

distinction between representations or statements of fact, on the one

hand, and promises, on the other, is both diff‌icult 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 de aling, in turn, with (1) the formation of agreements, (2)

the rules for recogniz ing their enforceability at law, (3) grounds for set-

ting aside or vitiating agreements that would otherw ise be enforceable,

(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 determine

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 formation of contracts are exa mined in Part One of this volume.

The basic rules for determining whether the parties have reached an

agreement on certain ter ms — the rules of “offer and acceptance” — are

examined in Ch apter 2. Even though the parties may have reached a

genuine agreement or consensus ad ide m on certain matters, the ter ms

of their agreement, if it is to be enforceable, must deal w ith suff‌icient

matters to constitute a valid agreement. Ot herwise, the ag reement

will fail for incompleteness or uncerta inty. This issue is considered in

Chapter 3. Further, even though the parties reach consensus on suff‌i-

cient matters to constitute a valid agreement, it may not h ave been their

intention to create an enforceable agreement. The relevancy of such

an intent is explored in Chapter 4. In recent years, some courts have

suggested the possibility that parties negotiat ing 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 a ny such doctrine are examined

in Chapter 5. Part One concludes in Chapter 6 with an examination

of various issues concern ing the formation of agreements in wr iting.

3 See Chapter 18, Section B.

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

rise to cer tain remedies. See Chapt er 10.