Monday, May 30, 2011

Bargain vs Will

While still a novice in my contract studies, I have to say that I already have a basic principled objection to the central bargain theory of contracts. As far as I can tell, one of the basic concepts of contracts is that it is mean to be a exchange. In its most basic form a contract reflects an agreement or a bargain between two parties. Party A promises to do something for Party B in return for Party B's promise to do something for Party A. In other words two parties come together to exchange something of value, it need not be equal value but judges have consistently found the need to find some value or consideration in the exchange. In the absence of such consideration, courts will not honor the contract. I find this hard to fathom. Certainly there is reason to reject a contract when one party is brought to it under duress, however is it reasonable for the courts to hold that there must be an accounting of value in every instance? Is not the fact that the two parties who enter into a contract deem it worthy of value to do so? Does this not imply that the two parties find some value in the exchange?

Of course you have to assume that many of the other elements to a contract continue to exist. There must be an offer and an acceptance. The wording of the agreement must demonstrate certainty. One should have an intent to create legal relations, there must be a binding understanding between the two parties. Most certainly it would be necessary to show that there is the requisite 'meeting of the minds'.

How then would a will theory of contracts operate? Certainly we would no longer need to worry about the Foakes v Beer decision. Williams v Roffey Bros & Nicholls no longer becomes controversial. But what dangers would it open? Check in for the next post...

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