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Theory of contract law

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Freedom, fairness and objective agreement

Balance diagram showing contract law weighing freedom of contract against consumer protection, with autonomy, certainty, risk allocation, standard-form terms, unequal bargaining power and fairness controls labelled

Contract law starts from the idea of voluntary legal obligation: people should usually be free to make their own bargains. A contract is a legally enforceable agreement, and the courts judge agreement objectively by asking what a reasonable person would think the parties meant, as in Smith v Hughes [1871].

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Theory of contract law

x

Freedom, fairness and objective agreement

Balance diagram showing contract law weighing freedom of contract against consumer protection, with autonomy, certainty, risk allocation, standard-form terms, unequal bargaining power and fairness controls labelled

Contract law starts from the idea of voluntary legal obligation: people should usually be free to make their own bargains. A contract is a legally enforceable agreement, and the courts judge agreement objectively by asking what a reasonable person would think the parties meant, as in Smith v Hughes [1871].

Theory of contract law Lesson

Theory of contract law Lesson