Contracts (2022): Introduction: Part 4 (of 4)

Remedies.

In the United Kingdom, breach of contract is defined in the Unfair Contract Terms Act 1977 as:  non-performance,  poor performance,  part-performance, or  performance which is substantially different from what was reasonably expected. Innocent parties may repudiate (cancel) the contract only for a major breach (breach of condition), but they may always recover compensatory damages, provided that the breach has caused foreseeable loss.

It was not possible to sue the Crown in the UK for breach of contract before 1948. However, it was appreciated that contractors might be reluctant to deal on such a basis and claims were entertained under a petition of right that needed to be endorsed by the Home Secretary and Attorney-General. S.1 Crown Proceedings Act 1947 opened the Crown to ordinary contractual claims through the courts as for any other person.

History.

Whilst early rules of trade and barter have existed since ancient times, modern laws of contract in the West are traceable from the industrial revolution (1750 onwards), when increasing numbers worked in factories for a cash wage. In particular, the growing strength of the British economy and the adaptability and flexibility of the English common law led to a swift development of English contract law. Colonies within the British empire (including the USA and the Dominions) would adopt the law of the mother country. In the 20th century, the growth of export trade led to countries adopting international conventions, such as the Hague-Visby Rules and the UN Convention on Contracts for the International Sale of Goods, to promote uniform regulations.

Contract law is based on the principle expressed in the Latin phrase pacta sunt servanda, ("agreements must be kept"). The common law of contract originated with the now-defunct writ of assumpsit, which was originally a tort action based on reliance. Contract law falls within the general law of obligations, along with tort, unjust enrichment, and restitution.

Jurisdictions vary in their principles of freedom of contract. In common law jurisdictions such as England and the United States, a high degree of freedom is the norm. For example, in American law, it was determined in the 1901 case of Hurley v Eddingfield that a physician was permitted to deny treatment to a patient despite the lack of other available medical assistance and the patient's subsequent death. This is in contrast to the civil law, which typically applies certain overarching principles to disputes arising out of contract, as in the French Civil Code. Other legal systems such as Islamic law, socialist legal systems, and customary law have their own variations.

However, in both the European union and the United States, the need to prevent discrimination has eroded the full extent of freedom of contract. Legislation governing equality, equal pay, racial discrimination, disability discrimination and so on, has imposed limits of the full freedom of contract. For example, the Civil Rights Act of 1964 restricted private racial discrimination against African-Americans. In the early 20th century, the United States underwent the "Lochner era", in which the Supreme Court of the United States struck down economic regulations on the basis of freedom of contract and the Due Process Clause; these decisions were eventually overturned, and the Supreme Court established a deference to legislative statutes and regulations that restrict freedom of contract. The US Constitution contains a Contract Clause, but this has been interpreted as only restricting the retroactive impairment of contracts.