An actionable misrepresentation is a false statement of fact (not a statement of opinion or future intention) or misleading conduct by one party to the other which induces the other to enter into the contract, rendering the contract voidable (liable to be set aside)—and giving rise to other possible remedies for misrepresentation.

Affirmation occurs when a party, with full knowledge of its ability either to terminate a contract for repudiatory breach or to rescission for actionable misrepresentation, continues performance of the contract or acts in such a way that an unequivocal intention to continue performance can be implied from conduct. Affirmation preserves the contract and therefore the parties’ performance obligations.

The parties may provide in their contract for the amount of damages to be paid upon breach. Traditionally, where these clauses were designed to reflect the compensatory aim of damages for breach, they were enforceable (liquidated damages clauses). By contrast, if the intention was punitive and the clause was merely a threat to compel performance, it was an unenforceable penalty clause. In Makdessi v Cavendish Square Holdings BV and ParkingEye Ltd v Beavis (2015) the Supreme Court recast the penalty rule in terms of ‘legitimate interest’.

An anticipatory breach occurs where before the time fixed for performance one party indicates that he will not be performing, i.e. rejects the contract. The innocent party has the usual election to terminate, in which event he need not wait until the date for performance before claiming damages, or to affirm.

Bilateral agreements are the cornerstone of classic contracts where both parties are bound. For example, both parties are bound on the exchange of promises, although it may be that there has yet to be any performance of those promises.

A breach of contract occurs where, without lawful excuse (e.g. frustration), a party either fails or refuses to perform a performance obligation imposed upon it under the terms of the contract or performs that obligation defectively, in the sense of failing to meet the required standard of performance.

Where both parties enter into a contract based on the same fundamental mistake, e.g. that the subject matter exists, and where there is no express or implied provision allocating the risk of this mistake to one party, the contract will be void at common law for mistake.

A condition is an important term of the contract going to the root of the contract so that its breach is considered repudiatory and justifies the option to terminate the contract (so discharging the parties’ future obligations). Condition is sometimes used in other senses, e.g. in a generic sense to mean any ‘term’ of the contract.

Consideration means an act or a promise given in exchange for the act or promise of the other party (i.e. the price for which the other’s promise or act was bought). Unless a promise is contained in a deed it is generally only enforceable if supported by consideration. Some enforceability of alteration promises may be achieved via the doctrine of promissory estoppel.

A counter-offer may purport to be an acceptance but has either added a new term or, more usually, amended an existing term. It can be compared with a request for further information which is merely asking for more information or whether a particular means of performance will be possible before finally committing via acceptance.

Damages are a financial remedy which generally aims to compensate the injured party for the loss it suffers as a consequence of the breach or actionable misrepresentation.

Duress is a common law doctrine allowing a contract to be set aside because it was entered into as a result of illegitimate pressure or threats such that the other party had no realistic choice other than to agree.

An entire agreement clause provides that all the terms of the parties’ agreement are contained in the written document and there are no other terms. This often prevents a party from alleging that there are separate oral terms or an oral or written collateral contract.

An exemption clause is a particular term which purports to exclude or limit the liability or the remedies which would otherwise be available to the injured party.

In the absence of a contractual provision allocating the risk of the event in question, frustration occurs when, during the performance of the contract, and without the fault of either party, some event occurs which renders further performance impossible, ­illegal, or radically different so that the purpose of both parties is no longer possible and the contract becomes essentially different. Frustration automatically discharges the contract (terminates both parties’ obligations for the future).

An innominate term is a term which can be broken in a number of different ways, not all of which would be serious. The courts look at the effect of its breach when deciding whether the injured party should be able to terminate for its breach or should be limited to a remedy in damages. Only if the effects of the breach deprive the injured party of substantially the whole benefit it was intended to obtain by the contract will the breach of this term be repudiatory.

An invitation to treat is an invitation to others to make offers as part of the negotiating process.

The injured party has a ‘duty’ to minimize the losses it suffers following breach or misrepresentation so that it cannot recover for any losses which it failed to mitigate by taking ‘reasonable steps’ to minimize its loss.

A mutual mistake occurs where each party is fundamentally mistaken but each makes a different mistake, i.e. the parties are at cross-purposes. This mistake will prevent agreement where it is not possible for the reasonable person to say which party’s interpretation is the more reasonable (using the objective test for contract formation) because of the ambiguity in the offer terms. Such a ‘contract’ is void, i.e. of no effect from the very beginning.

A definite promise to be bound on the terms proposed, made with the intention that it is to become binding as soon as the person to whom it is addressed (the offeree) accepts the offer terms.

The doctrine of privity of contract provides that only the parties to a contract may enjoy the benefits of that contract or suffer its burdens. In other words, generally only the parties can enforce the contractual obligations, rely on its protections, or be subjected to its restrictions.

Promissory estoppel is an equitable doctrine designed to prevent the promisor from going back on their promise or representation that they would not insist on their strict legal rights under an existing contract where this would be inequitable (unfair) because the promisee has relied on this promise or representation.

Sometimes a party may recover on a quantum meruit (as a restitutionary remedy) for the reasonable value of a non-financial benefit which they have provided and which is not otherwise recoverable since there is no express contractual provision for remuneration. The basis of recovery may broadly be that the other party would otherwise secure a benefit that it did not have to pay for.

Remoteness determines the scope of losses for which a party can be held responsible and so be liable to compensate the injured party in the event of breach or actionable misrepresentation. Some losses are considered too remote a consequence of the contractual wrong.

A representation is a statement which induces the contract but which generally does not involve any binding promise as to truth. If a representation turns out to be false it may be an actionable misrepresentation.

Every breach of contract will give rise to a right to claim damages. However, unless the breach constitutes a repudiatory breach, the contract will remain in force. If the breach is repudiatory, the non-breaching party may also have the option either to accept the breach as terminating the contract or to affirm the contract.

Where a contract is voidable, e.g. for actionable misrepresentation, duress, or undue influence, the remedy of rescission may be available to the injured party (unless barred) in order to set aside the contract, involving handing back the property received under the contract and the return of the price paid.

Restitution allows for the recovery of money paid to a party or the value of benefits conferred on that party (via a quantum meruit) on the basis that such a party should not be unjustly enriched at the other party’s expense.

Revocation of an offer involves the withdrawal of an offer previously made.

This is an equitable (and hence discretionary) remedy (or order) which compels the party in breach to perform its obligations.

A term is a statement, pre-contractual and/or included in a written contract, or clause which becomes part of the contract. If a positive term/promise is broken, it amounts to a breach of contract, giving rise to remedies for breach of contract.

Future performance of both parties’ obligations may be discharged (terminated for the future) where a repudiatory breach occurs and the injured party exercises its option to accept that repudiatory breach as terminating the contract, rather than affirming the contract.

The doctrine of undue influence is an equitable doctrine allowing a contract to be set aside (the remedy of rescission) where there has been a wrongful (undue) exercise of influence by one party over the other.

Unilateral agreements are a promise that if the other party performs X they will receive X but where there is no obligation on that other party to perform X. The other’s acceptance is the performance of the requested act.

A unilateral mistake occurs where one party is mistaken as to a term of the contract and the other knows or ought to know of this mistake and cannot be allowed to take advantage of it. Such a mistake will prevent agreement so that any ‘contract’ is void.

Where a contract is void it is automatically of no effect from the very beginning. There is no, and never was, effective agreement (and hence there is no contract). This effect is automatic and has nothing to do with an election by either of the parties.

Where a contract is voidable it is liable to be set aside by one party using the remedy of rescission. Once it is set aside, the contract is treated as never having existed. However, there are bars to rescission and where any of these applies the voidable contract must remain valid and binding.

A warranty is a less important term of the contract (not going to the root of the contract) so that if it is breached the injured party would be adequately compensated by the payment of damages. If this term is broken, it is not therefore a repudiatory breach. The word warranty is also sometimes used in a more general sense to mean ‘a term’.