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Introduction to English Contract Law



As a critical field of English civil law, English contract law is involved in daily life and appears constantly in the courtroom. Like other English laws, English contract law has two primary sources: statutes and case laws. Statutes, also known as Acts of Parliament, are rules that are written down. All the statutes together are called legislation. For a statute to come into force, the rule has to be proposed by The House of Commons, checked by The House of Lords, and approved by the Monarch. On the other hand, case laws are also known as precedents; they are the judge's judgment given or handed down, including the judge's reasoning for the decision regarding the principle of law used and the facts of the case. The higher courts' issues are binding upon the lower courts, and only the case's ratio decidendi (the decision and reasoning behind the decision) are binding. Therefore, the Acts of Parliament and the precedents became the sources of today's English contract laws.


To become a valid contract, there are four elements that the contract needs to meet: consideration, offer, intention, and acceptance. All four elements are indispensable. To begin with, consideration refers to what the parties exchange under the contract: money, goods, services, a promise to do something, or a forbearance. This exchange is reciprocal, meaning both parties must give each other one thing. Secondly, there needs to be an offer. An offer can end due to five reasons: revocation, where the offeror takes back the offer; rejection, where the offeree rejects the offer; counteroffer, where the offeree asks for another offer; lapse of time since the acceptance is too late; death of the offeror or offeree. Thirdly, the offeror's intent to make the agreement legally binding is also essential. Usually, a business agreement is considered to have an intention, while a family agreement, like going to the beach, does not. Lastly, the offeree accepts the offer. The acceptance must be made to the offeror, and it must be communicated instead of by silence. The acceptance must be heard or received in writing to make it effective. Besides, the acceptance must be made in accordance with the offeror's request. For example, if the offeror asks for the acceptance via email and the offeree texts the offeror, this is not a valid acceptance.


In conclusion, English contract laws have two significant sources of law: statutes and case laws, and they have four strict and precise elements: consideration, offer, intention, and acceptance.


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