Questions surrounding the formation of contract are important both in practice and in theory. This book is a welcome addition to the literature on the topic. It deals with the major principles underpinning the law, and draws on a wealth of authority from the Commonwealth and beyond. Practitioners, teachers and students will find much of interest.
Issues of offer and acceptance are analysed first (chapters 3 and 4). The discussion of “firm offers” and estoppel in chapter 3 is especially illuminating, particularly since it draws extensively upon foreign case law to enrich the narrow exposition of English case law which is often provided in other texts. There is then a helpful discussion of auctions and tenders (chapter 5), and chapter 6 is dedicated to contracts formed online. It is perhaps unfortunate that a separate chapter is thought to be needed on this last topic; indeed Eliza Mik, the contributor of this chapter, recognises that “[f]uture editions of this book may not contain a chapter on ‘electronic’ or ‘online’ contract formation. … It can be expected that some of the issues discussed in this chapter will be slowly assimilated by legal doctrine and case law” (para. 6.01). It is to be hoped that such assimilation will occur quickly. The general principles of offer and acceptance appear sufficiently flexible to accommodate this area of law (see, for example, D. Nolan, “Offer and Acceptance in the Electronic Age” in A. Burrows and E. Peel, Contract Formation and Parties (Oxford 2010)). Transactions over the internet should cease to be seen as either novel or problematic. But regardless of the assimilation of electronic contracts with “general” principles of contract law, this chapter might, perhaps, have been better assimilated within the book as a whole if more extensive cross-referencing to the “general” chapters had been made.
Letters of intent have long proved problematic in this area, and indeed have recently been at issue in the Supreme Court (RTS Flexible Systems Ltd. v. Molkerei Alois Müller GMBH & Co. K.G. (UK Productions) [2010] UKSC 14, [2010] 1 W.L.R.753, which unfortunately appeared too late for inclusion in the book). There is a thorough consideration of letters of intent generally in chapter 7, and “practical aspects of letters of intent” in chapter 8. Conditional contracts are then considered (chapter 9), before finally considering intention to create legal relations (chapter 10, which includes a very useful examination of letters of comfort) and certainty and completeness (chapter 11). The book concludes with chapters on a possible duty to negotiate in good faith (chapter 12) and pre-contractual liability (chapter 13). There is considerable overlap between these two chapters. Yet the discussion of estoppel in the latter chapter concerns only proprietary estoppel, whilst promissory estoppel is dealt with in the former (although, strangely, no reference is made in such discussion to Baird Textile Holdings Ltd. v. Marks & Spencer plc. [2001] EWCA Civ 274, [2002] 1 All E.R. (Comm) 737). This split is untidy and makes it difficult to consider whether proprietary estoppel really is a sub-species of promissory estoppel (as Lord Scott suggested in Yeoman's Row Management Ltd. v. Cobbe [2008] UKHL 55, [2008] 1 W.L.R.1752 at [14]) and what the effect of this might be.
This is a scholarly work which offers a thorough examination of the major areas of interest concerning contract formation, and the authors deserve much credit for a vast amount of research which collates a huge quantity of disparate material. This book should serve as a helpful reference point, particularly for practitioners, at whom it is primarily aimed. It might also be useful for students, even undergraduates: too often students skim over offer and acceptance at the start of a contract law course, without truly appreciating the complexities of the topic.
A major strength of the book is its reliance on authorities from other jurisdictions. However, at rare moments this was a little distracting. For example, at para. 1.19 the authors cite Australian authority (Kriketos v. Livschitz [2009] NSWCA 96 and Adunat Pty Ltd. v. Olivetti Concrete Lifting Systems Pty Ltd. [2009] FCA 499) for the proposition that a contract will not be implied unless necessary, and that it is insufficient that the parties' conduct be simply consistent with there being a contract, whereas the English decision of The Aramis [1989] 1 Lloyd's Rep. 213, 224 seems equally on point and worthy of mention (especially since it has recently been cited at appellate level: Whittle Movers Ltd. v. Hollywood Express Ltd. [2009] EWCA Civ 1189, [2009] 2 C.L.C. 771; Müller). Given the thorough appraisal of both domestic and foreign jurisprudence throughout the book, it is understandable that such lapses occur, and that, conversely, the survey of foreign authorities is at times less extensive. For example, it is stated that, in the context of auctions, the English presumption appears to be that if nothing is said, then it is assumed that there is a reserve price, but that “[o]ther jurisdictions may have different presumptions”, without further explanation (para. 5.10).
The authors quite rightly point out that new cases inevitably abound in this area and that the book must necessarily focus upon the general principles at play. This it does very well. Nevertheless, with the advantage of the passing of a little more time, it may be that recent developments concerning the boundary between formation of contract and unjust enrichment (such as Whittle and Müller) perhaps indicate that this topic might merit a fuller treatment than that which it is currently accorded. In future editions, the discussion of “battle of the forms” cases will be better informed by consideration of Tekdata Interconnections Ltd. v. Amphenol Ltd. [2009] EWCA Civ 1209, [2010] 2 All E.R. (Comm) 302.
Overall, Furmston and Tolhurst have produced a helpful book on an important subject, which will assist and illuminate discussion of this major field of contract law.
