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Contract: Rules and Theory

Freedom of contract and the classical theory of bargain

  • 3 things to know
  • A2 Units 3 and 4

Overview

Freedom of contract, will theory of contract and bargain theory of contract.

What you need to know

Answer each one before you reveal it.

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Key term

Identify the two limbs of the classical doctrine of freedom of contract.

Key term

Explain the will theory of contract.

Key term

Explain the bargain theory of contract.

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is meant by freedom of contract?

    Model answer

    It is the principle that parties are free to decide whether to contract at all, with whom, and on what terms, and that the courts will enforce whatever terms they choose.

  2. 2

    What did Sir George Jessel MR say in Printing and Numerical Registering Co v Sampson (1875) about contracting?

    Model answer

    He said that adults of competent understanding should have the utmost liberty of contracting and that their contracts, freely and voluntarily made, should be held sacred and enforced by the courts.

  3. 3

    Identify the two limbs of the classical doctrine of freedom of contract.

    Model answer

    The first is freedom to contract, meaning nobody is forced into an agreement, and the second is sanctity of contract, meaning that once made an agreement will be enforced as written.

  4. 4

    Explain the will theory of contract.

    Model answer

    The will theory holds that a contract binds because the parties have willed it, so the source of the obligation is their own agreed intention rather than anything imposed by the state.

  5. 5

    Explain the bargain theory of contract.

    Model answer

    The bargain theory holds that the law enforces a promise only where it has been bought, so each party must give something of value in exchange, which is why English law requires consideration.

  6. 6

    Why will English law not enforce a purely gratuitous promise made informally?

    Model answer

    A gratuitous promise is unsupported by consideration, so it is a bare promise which the courts will not enforce unless it is made by deed.

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