Audio recording 5.1 transcript

So, chapter five is all about contract as an agreement. And I think this raises interesting questions about the scope of contract law. So, the more willing you are to find that there has been agreement, and that there is a contract, the broader the scope of contract law, and the less willing you are, so the more you think that there isn't a contract because the terms are not sufficiently certain, but because the parties have not agreed finally to be bound, then that shrinks the scope of contract law. But that doesn't necessarily mean that there isn't a remedy. So, there are other possibilities. So, there might potentially, in some situations, be a claim in torts, or there could be a claim in unjust enrichment. Which is a cause of action that's considered in more detail in chapter twenty-nine, but it's important now to recognize that unjust enrichment is another cause of action in the laws of obligations. But it's not based upon a wrong, so it's not like contract, breach of contract, it's not like torts. So, a typical example is, I transfer a hundred pounds to you thinking I owe you that money, but I don't, I owe it to somebody else. Well, you've done nothing wrong, but equally I should be able to sue you for a hundred pounds, because otherwise you'd be unjustly enriched from the base of my mistake. And the same analysis applies if I transfer to you a hundred pounds, or provide some services which are valuable to you thinking you're going to give me something in return and you don't. So, there I've transferred to you an enrichment on a basis which has totally failed and I should be able to sue you in unjust enrichment. And the ground is called total failure of consideration. So that's interesting in particular when we look at some of these cases, which are said to be subject to contract. So, let's say that we're negotiating a long-term contract between us and all the negotiations are said to be subject to a signed, written deal. And before we have a signed, written deal in place you start to perform the contract in some way. And then the question is, if negotiations for the long-term contract break down, can you still sue me at all? Can you bring any sort of claim against me? And one option is to say, perhaps there might even be a claim in torts, perhaps on some facts that might be claiming promissory estoppel, which we'll look at in chapter seven. But in England, those claims are unlikely to succeed. Another is to say that you have a claim in unjust enrichment, because although there's no contract between us, you should be able to sue me for the value of the services you perform. And another example, and another possibility, sorry, is to say that maybe there is a contract between us. So maybe we don't have the long-term agreement we originally envisaged, but maybe there's an implied collateral, or ancillary contract that has arisen through our conduct, that you provided services, which I've accepted. We might be able to find an offer acceptance and intention to be bound. And we'll look at intention to be bound in chapter eight. And I think that perhaps we should be more willing to find that there is a contract in these sorts of situations. And then to say that if there isn't a contract, well, maybe you shouldn't recover anything at all. Maybe you've performed these services at your own risk when we haven't got a contract in place, and so you shouldn't be paid. So maybe we should say that in those sorts of situations, if you can't bring a contractual claim really, there's not a lot of scope for you to bring any claim at all. And in a way, a lot of these arguments are linked to ideas of good faith. And good faith we'll consider  in much more detail in chapter twenty.