Professional Documents
Culture Documents
Dierences between dierent models o capitalism-e.g. the North American model. the Luropean model. or the Japanese
model-are not considered here. But it should not be assumed that the principles o capitalism are applied in exactlv the same
wav in all countries.
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1here is also an ineitable tendencv or those with greater bargaining power to seek to impose their wishes
in contracts on parties with weaker bargaining positions. A great deal o modern law is designed to leel
the plaving ield`. 1here is a ast bodv o consumer law which has the eect o sotening the binding
nature o contractual relationships bv giing added rights to consumers in situations where the bargaining
power between the supplier o goods or serices and the consumer o those goods or serices is regarded
as unequal. 1hus there are legal requirements that those who sell insurance policies or other expensie
inancial products should allow the purchaser a cooling-o period within which he mav change his mind.
lousing law regulates the relationship between landlords and tenants. Lmplovment law seeks to regulate
the relationship between emplover and emplovee. More generallv there are measures which enable the
consumer to challenge terms in contracts thought to be unair.
lere again. as with law and public order or law and social order. in relation to the economic order. the law
mav be said to perorm unctions that are to some degree in conlict. Law has helped to legitimate the
tools essential to the commercial context within which market capitalism is able to lourish. At the same
time law is used to limit the excesses o market behaiour that might otherwise logicallv result rom the
operation o market capitalism.
J.2.5 Law and International Order
Another unction or law is. arguablv. the proision o support or international order. 1his is a complex
and controersial subject not considered in anv detail here. 1here are those who argue that there is reallv
no such thing as international law: rather that maintenance o the international order is sustained bv
international relations and diplomatic pressure. But in erv manv respects. international bodies and
politicians like to assert that what thev are trving to achiee has legal backing. lor example:
Recent incursions bv the United Nations into particular world trouble spots hae been justiied at
least in part bv reerence to the legal ramework o the United Nations (harter and its executie
bodies. in particular the role o the Securitv (ouncil.
Attempts to deal with crimes against humanitv`-a particular curse o the modern age-are being
made through a special \ar (rimes 1ribunal which has been established bv the UN and which sits
in the lague.
In other areas. such as the regulation o world trade. or the protection o the enironment. the
regulation o the use o the sea. or een space. there is an increasing tendencv not onlv to enter
treaties-which historicallv was common practice-but also to create special institutions and
mechanisms or enorcement like courts or tribunals. which are independent o particular national
goernments.
1he conduct o war has long been subject to international legal constraints. or example the Genea
(onention on the treatment o prisoners o war. Similarlv other constraints on behaiour in war
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and other situations o conlict. such as the preention o torture. hae been prescribed in
instruments o international law.
One o the most pressing o current social issues. protection o those seeking asvlum in one
countrv because o ears o persecution in another countrv. is essentiallv shaped bv principles o
international law.
1hese are important and controersial issues. Len though the ocus o this work mav be said to be on
the rather more parochial subject o the Lnglish legal svstem`. we cannot ignore the global context in
which countries now operate. It has been argued that. ollowing the collapse o communism. a new world
order` has emerged. Legal instruments and institutions plav a signiicant part in the deelopment o that
new order. 1hough the ocus here is on what happens in Lngland and \ales,. this signiicantlv wider
dimension should not be orgotten.
J.2.6 Law and Moral Order
Another broad unction o law mav be said to be the proision o support or the moral ordering o
societv. 1his is extremelv controersial. Some theorists argue that there should be little i anv distinction
between law and moralitv: that the law should clearlv and deliberatelv mirror those issues o moralitv
which people think ought to inorm the wav we should behae. Others. howeer. seek to draw a clear
distinction between law and moralitv. 1hev argue that the mere act that manv people betiere that certain
orms o behaiour or actiitv are morallv wrong or example engaging in homosexual actiitv, should
not mean that such actiitv should be deined as being unlawul.
\hile there are clear dangers and considerable diiculties in seeking to equate law and moralitv. not least
because o the problems o determining what the common moralitv on anv gien issue might be.
neertheless manv rules o law are ounded on a moral iew o societv. Perhaps the clearest example is
that the moral imperatie not to kill people is relected in rules o the criminal law which outlaw such
actiitv.
In general it mav be suggested that rules o criminal law which relect some common moralitv. howeer
that mav be deined. mav be more acceptable and eectie in regulating behaiour than those rules which
do not so relect a common moralitv. lor example. there mav well be behaiours which manv would
regard as repugnant-dressing shabbilv. or drinking cheap alcohol in the streets-but which should not o
themseles be deined as criminal. (onerselv. there mav be rules o criminal law. or example about not
exceeding 30 m.p.h. in a built up area. which manv would not regard as particularlv morallv repugnant. but
which should neertheless be deined as criminal.
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(urrent campaigns to change people`s perceptions about the non-desirabilitv o driing aboe the speed limit are being
directed as much to the moral issues as the legal issues inoled.
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In a quite dierent context. much o the law which seeks to regulate relationships between indiiduals is
also based in concepts o moralitv. or example relating to the institution o marriage. 1o an extent.
thereore. it can be said that another unction o law is to proide at least some support or the moral
order. a unction reinorced bv the protection o amilv lie under the proisions o the Luropean
(onention on luman Rights Art. 8,.
Related to a consideration o the relationship between law and the moral order is a consideration o the
relationship between tar ava retigiov. oraer. Despite an apparent decline in religious belie in Lngland. there
are still manv who argue that religion-both ormal and inormal-remains an important component in
the make-up o societv at large. loweer. and bv contrast with discussion about the relationship between
law and moralitv. the argument is not in present circumstances oten made that law should be supportie
o religion. Indeed there would be manv who would make a powerul argument. whether in general
principle or because o their own religious or anti-religious, belies. that law should vot be used to support
the religious order. Ouestions o spiritualitv and religious belie would be argued bv manv as alling within
that priate sphere o actiitv in which the law should not interene.
Neertheless. the historical role plaved bv religion in the deelopment o modern Lngland cannot be
whollv ignored. At its most basic. our calendar and major estials are irmlv based in the (hristian
tradition. not that o other religious groupings. 1here are a number o legal priileges that attach to the
(hurch o Lngland: there are others that applv to religious groups more generallv. 1here remains a
speciic law against blasphemv which eectielv applies onlv to the (hristian religion. 1hus it is arguable.
though not oten seen in this light. that present-dav law still plavs a residual part in the support o religious
order. in particular the (hristian religious order.
1his is controersial. not least because o the rise in a number o countries o arious orms o religious
undamentalism. 1hese are oten accompanied bv degrees o intolerance towards others that manv regard
as quite unacceptable in a modern pluralistic societv. Indeed it mav be the case that. in order to protect
social pluralism. the law should be used more to protect the abilitv o those o dierent religious belies to
hold and practice their religion. another issue embraced in the Luropean (onention on luman Rights
Art. 9,.
J.3 Other Macro Iunctions
In addition to the wavs in which law mav interact with the maintenance o and challenges to dierent
tvpes o order. law also has a number o other macro unctions.
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J.3.J 1he Resolution of Social Problems
1he response o politicians and their oicials to manv o the issues that are perceied as social problems is
to create more law seeking to regulate the behaiour complained against. 1his is regarded as the
appropriate or expected political response. Onlv rarelv do politicians concede that there mav be enough
law and that what is needed is better understanding or enorcement o that law. Len more rarelv are
politicians willing to accept that a possible solution to a problem might be to repeal existing rules o law or
to deelop the law in such a wav as to decriminalize the actiitv in question.
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1heir mindset assumes that a
unction o law is to sole social problems. Indeed whole careers are deoted to the promotion o
legislation allegedlv designed to address particular social issues-een i. as oten happens. there is alreadv
perectlv satisactorv law alreadv aailable. or where changing the law is not reallv a solution to the
problem. Perhaps ciil serants and politicians who are responsible or prerevtivg legislation rom reaching
the statute book should be rewarded more generouslv than those who seek to drie legislation orward.,
In addition. one obious consequence o creating legal proisions to sole social problems is that
people-eer mindul o their own sel-interest-respond to new legal rameworks in wavs not predicted
bv the law-makers. A hidden but oten ineitable consequence o using law to sole social problems is.
thereore. that the erv process o creating new law results not in the solution o an existing social
problem but rather in the creation o new social problems. 1he process o dealing with one issue leads to
the creation o another issue which in its turn has to be soled at a1ater date.
J.3.2 1he Regulation of Human Relationships
Another erv important unction o the law is the regulation o the nature and extent o human
relationships. 1he nature o and ormalities relating to the creation o marriage is determined bv legal rules.
oten supplementing dierent religious rules. Law proides a ramework or the distribution o assets on
the breakdown o marriage. 1he law is also currentlv being deeloped in relation to the regulation and
underpinning o long-term relationships where persons hae not gone though the ormalities o marriage.
1hese deelopments are being considered not onlv in the context o heterosexual relationships. but also
homosexual relationships. Law sets boundaries to the scope o sexual relationships. whether heterosexual
or homosexual. prescribing or example the minimum age o sexual consent. and making certain sexual
relationships within the prohibited degrees o consanguinitv` incest and other close relationships, are
unlawul. 1he law also sets down a ramework or the treatment o children and other amilv members.
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listoricallv this has oten happened. lor example manv o the criminal oences that two or three hundred vears ago might
hae led to Draconian punishments such as transportation or een the death penaltv now seem erv triial and are either no
criminal at all. or dealt with much less seerelv. 1odav manv argue that a less criminal approach to the use o sot drugs`
might not onlv lead to more equitable treatment as compared with those who use alcohol or nicotine. but also lead to
reductions in other orms o criminalitv resulting rom the need or drug users to obtain the monev to buv their drugs. On the
other hand. there are powerul political arguments that anv relaxation in the goernment`s approach to drug use would send
the wrong signal` to the communitv at large.
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J.3.3 1he Lducative or Ideological Iunction of Law
A urther unction o law is that. almost irrespectie o its impact in particular cases. it has an educatie
unction: it contributes to shaping part o the ideologv o a nation. 1o gie a simple i signiicant example:
there is no doubt that attitudes to drinking and driing hae changed dramaticallv oer the last twentv
vears. In part this is the result o powerul adertising. demonstrating the deastating impact that drink-
drie accidents can hae on ictims and their amilies. But the change in attitude has also been the result
o changes in the law contributing to a climate o opinion in which drinking and driing is just no longer
regarded as sociallv acceptable behaiour.
Another example. alreadv mentioned aboe. is law dealing with arious orms o discrimination. \hen
such laws are brought into eect. those who argue or their introduction oten accept that the law will not.
on its own. alter the attitudes o mind that led to the patterns o discriminatorv behaiour which hae led
to the creation o these laws. loweer. those who hae sponsored such laws see them as not onlv creating
certain legal rights which mav be enorceable bv indiiduals. but also sending a more general educatie
signal to members o societv at large that discriminatorv behaiour is not acceptable.
More generallv. countries that embrace the principle o the rule o law are. in eect. asserting that powers
o oicials o the state must be limited and that the indiidual citizen should hae both the right and the
opportunitv to challenge decisions. where thev are thought to be wrong or in some respect unair.
1he recent decision bv the British goernment to introduce the luman Rights Act. incorporating the
Luropean (onention on luman Rights directlv into Lnglish law. is another example o legislation that
will not onlv crate legal rights which indiiduals mav seek to pursue through the courts. but which also
sends an important educatie signal about the limits within which people. particularlv those who work
within goernment. must behae. In this sense. thereore. another unction o law relates to the education
o attitudes amongst members o the population.
J.4 Micro Iunctions of Law
1urning rom the macro to the micro leel inoles consideration o rather more speciic unctions or
law. manv o which derie rom the macro unctions identiied aboe. A number o examples are oered:
this does not purport to be a comprehensie list. 1he reader is inited to think o other unctions not
identiied here. In addition. the reader mav be able to think o other examples to illustrate the particular
unctions which hae been identiied.
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J.4.J Defining the Limits of Acceptable Behaviour
1he area o law with which most people hae at least some amiliaritv is the crivivat tar. A major objectie
o this branch o the law is to prescribe the limits o behaiour which are sociallv acceptable. 1he criminal
law seeks to prohibit manv kinds o actiitv about which there would be widespread agreement. such as
murder and iolent crime. It also outlaws a wide range o other actiities about which there mav be more
debate. such as the use o particular tvpes o drug. 1he ollowing points mav be made in this context:
Not all behaiour which mav be regarded bv manv as undesirable is therebv characterized in legal
terms as criminal. 1hus there is no law preenting a person oer the age o 18 rom drinking
alcohol. loweer. where the consequences o that conduct mav impinge on others. the law oten
steps in. 1here is a strict law which makes it unlawul or persons who hae been drinking alcohol
to drie their car.
1here are more wavs in which human conduct is regulated than simplv bv the use o law. (odes o
moralitv. religious principles. the pressures o riends are all other actors which restrain the wavs in
which people behae.
Dierent countries set the boundaries o their criminal law in dierent places: what is criminal in
one countrv is not necessarilv criminal in another.
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Although there is a great deal o commonalitv
between dierent bodies o criminal law. in important respects the boundaries o criminal law are
cvttvratty aetervivea. set bv the demands o the speciic societv. 1here are particularlv important
distinctions in societies with dierent religious traditions or moral backgrounds: laws operating in
Islamic countries are oten quite dierent rom those in countries ounded on the Judaeo-(hristian
tradition.
1he boundaries o the criminal law are ayvavic. Actiitv which has been regarded as criminal at one
point in time will not necessarilv be regarded as criminal at another point in time. 1he prohibition
o alcohol in the US during the 1920s is a good example.
1he attempt bv law to regulate human behaiour is not exclusielv through use o the criminal law. Areas
o cirit tar also seek to do this. lor example. i parties to a contract break that contract. rules o law allow
the partv aected to claim compensation or other remedies rom those in breach o contract. 1he law o
negligence prescribes situations in which a person who has injured another has to compensate that other
or the injurv. In short. law seeks to deine the scope o the obligations that exist between indiiduals.
Although the objecties o rules o ciil law are not to punish an oender. in the sense used in the context
o the criminal law. it is neertheless the case that rules o ciil law indicate that a contract cannot be
breached with impunitv. nor can one person act negligentlv in relation to another. In this sense. thereore.
the rules o the ciil law also send the message that certain tvpes o behaiour are not acceptable or are
undesirable.
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1his can hae an important practical consequence in that i a person commits a criminal act in one countrv and lees to
another countrv where that act is not criminal. that is oten the basis or successullv resisting extradition proceedings-
oicial proceedings to bring the alleged miscreant back to the countrv where the original act took place or trial.
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J.4.2 Defining the Consequences of Certain Iorms of Behaviour
Law does not o course simplv deine those orms o behaiour which are unacceptable. It also prescribes
consequences. In the case o criminal law. these are the punishments that attach to a inding o guilt.
Similarlv in the area o the ciil law. the law prescribes the remedies that the person aected bv a breach
o contract or a negligent act mav be able to obtain rom the perpetrator.
In some situations the same acts mav generate quite dierent legal consequences. lor example. a road
accident mav be caused bv a person driing a car carelesslv or recklesslv. 1his mav result in the police
seeking to get that person prosecuted through the criminal courts: i ound guiltv this mav result in the
imposition o a ine or een imprisonment. I the accident causes damage to another. that other person
mav seek compensation bv bringing an action or damages in negligence. 1he drier mav argue that the
accident occurred because his car was improperlv sericed. and mav thereore bring an action or breach
o contract against his garage. 1hree dierent legal consequences hae thus arisen rom the same incident.
J.4.3 Defining Processes for the 1ransaction of Business and Other Activities
A rather dierent unction o law is to deine procedures bv which certain transactions must be carried
out. Some o these are quite simple. such as those relating to the making o simple contracts. loweer. in
manv cases. particularlv in situations where there is a concern to preent raud. considerable ormalitv mav
be required. Manv o these relate to transactions dealing with the transer o entitlement to propertv rights.
lor example. the process o buving and selling houses is subject to a number o ormal legal requirements.
known collectielv as the rules o conevancing. 1here are detailed rules which relate to the creation o
leases. 1here are special rules which relate to the creation o wills. Similarlv. there are detailed
requirements or the creation o trusts or settlements o propertv.
One o the problems with prescribing ormal requirements is that. whateer the law states. people in
practice attempt to carrv out these transactions in ignorance o the rules. 1he law then has to deelop
supplementarv principles which seek to preent injustice occurring. notwithstanding the existence o
procedural irregularitv. Manv o the principles o the law o Lquitv hae deeloped in response to this
problem.
J.4.4 Creating Regulatory Irameworks
Related to the last categorv a great deal o law seeks to regulate those who proide serices to the public.
lor example. substantial bodies o law regulate the actiities o solicitors. doctors. architects. nurses. or
estate agents. 1here is a ast regulatorv ramework designed to control the actiities o those who proide
inancial serices to the public. to preent raud and other breaches o trust. A consequence o the
priatization o the bulk o the ormer nationalized industries has been to create a ast bodv o law
designed to regulate the actiities o companies now in the priate sector such as telecommunications.
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utilities. and transport, including the promotion o competition and the regulation o prices. And speciic
areas o economic actiitv are subject to the most detailed legal regulation designed to promote standards
and gie the consumer alue or monev. 1he regulation o the housing market through housing law is a
prime example.
A dierent orm o regulatorv law. but one that has been in existence or manv vears. is planning law
regulating the use to which land can be put in this countrv. Law which seeks to regulate industrv in order
to protect the enironment is another example. In this context. the law operates at an international as well
as a national leel.
Regulatorv law also seres another purpose. It deines the categories o person able to make
representations to goernment about a particular policv or decision. lor example. again in the context o
planning law. the releant law determines who mav challenge decisions o the planning authorities. and
who mav appear to make their case at anv public inquirv resulting rom a planning decision.
J.4.5 Giving Authority to Agents of the State to 1ake Actions against Citizens
Another unction o law is to gie power to state oicials to take action against members o the public.
1here are numerous examples: the powers o the police to stop. search. question. arrest. and caution
members o the public is one: the power o doctors to detain in mental hospital those diagnosed as
suering rom acute mental illness is another: the power o social workers to remoe children rom
amilies where thev are thought to be as risk and to replace them in the care o the local authorities is a
third. Similarlv. agents o both central and local goernment are gien power to take monev awav rom
members o the public through the taxation svstem.
A rather dierent example is the power gien to goernment and other agencies o the state to acquire
land compulsorilv in the public interest.
J.4.6 Preventing the Abuse of Power by Officials
Set against the last heading. much law is designed to preent abuses o power bv public serants. lor
example. the police are required to operate within a ramework o powers prescribed bv the Police and
(riminal Lidence Act 1984. designed to set boundaries to their powers o arrest. search. and questioning.
1he heart o the principles o administratie law |.| relates to the importance o oicials acting within
the ramework o the law which prescribes their power: not allowing oicials to make use o the
discretionarv powers in an abusie wav. and giing people the opportunitv to take adantage o certain
procedural saeguards-or example a right to a hearing-beore aderse decisions about them are taken.
1hese are urther examples o rules o law setting boundaries to the power o the state oicials.
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J.4.7 Giving Power/Authority to Officials to Assist the Public
In contrast to the preceding categorv. the law also sets down a ast range o requirements wherebv
agencies o the state must proide serices or other goods to the public. At the most general leel. all
public expenditure has to be legitimated bv special Acts o Parliament known as the Appropriation Acts.
1hese gie general authoritv or the expenditure o public monev on the range o social and other policv
programmes run bv goernment.
More speciic bodies o law deal with the details. Social securitv law is one example. setting out as it does
the entitlements to social securitv beneits which hae been related bv goernment. Manv other examples
could be gien: entitlement to ree education is one. ree treatment within the National lealth Serice
another. All these actiities o the social securitv. and health authorities. are underpinned bv detailed legal
rameworks.
J.4.8 Prescribing Procedures for the Use of Law
In addition to prescribing procedures or conducting dierent tvpes o transaction. there is another
important bodv o lawprocedural lawwhich seeks to control the wav in which courts and other
adjudicatie bodies are to operate. 1his bodv o law mav set limits to the eidence that can be brought in
dierent tvpes o case. It also prescribes the wav in which dierent tvpes o proceeding. whether in the
courts. or other ora. are to be conducted.
J.5 Conclusion: Law and Society
It is not claimed here that these examples o the macro and micro unctions o law in societv are
exhaustie. Readers should think about whether there other unctions or law and whether thev should be
regarded as macro or micro in character. 1here is indeed a huge literature on the relationship o law and
societv o which the oregoing is onlv a erv limited summarv. loweer a number o points need to be
made here.
1, All the unctions o law. whether deined as macro or micro. are covtivgevt upon the stage o
deelopment o that societv. \hile manv o these unctions o law will be common to erv manv societies.
other will certainlv not be.
2, 1he laws that exist and the wavs in which thev are used are dependent on the ideologv and politics o
the particular countrv. lor example. current notions o social justice and equalitv in the United Kingdom
hae deeloped in the light o particular socio-political and economic theories. 1hev will change again in
the uture. 1he list o unctions proposed here should not thereore be regarded as set in concrete: it will
relect other broader changes in the social and political ideas and ideals o that societv.
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3, 1he unctions o law are bv no means alwavs consistent with each other: preseration o social order
mav on occasion be in sharp conlict with the unction o protecting ciil liberties: the role o law in
adancing equalitv or social justice mav be in conlict with its role in supporting current social and
economic orders.
4, It should be remembered that there are still actiities which are not currentlv the subject o legal
regulation. Goernments requentlv claim that thev are seeking to limit the encroachment o law.
Interestinglv. howeer. when a new technologv arries which actuallv enables actiities to occur outside
the normallv accepted regulatorv rameworksthe internet is a good current examplepoliticians and
others quicklv become agitated.
5, 1here are also signiicant techniques. apart rom recourse to law. used to regulate and alter the wavs in
which people behae. lor example. much o the practice o economics is based on the assumption that i
inancial incenties are right. then behaiour patterns will change. An interesting example is the current
proposal that problems o global pollution and global warming must be tackled not just bv laws saving
what should or should not be done. but also bv getting inancial incenties righthigher taxes paid bv
those who pollute. or example.
6, More undamentallv. there are signiicant issues about the wav in which we order our societv which are
either not touched on at all bv law. or onlv in relatielv insigniicant wavs. lor example. one o the major
social issues o our time relates to the extent to which groups in the communities are excluded rom the
mainstream o social lie. whether through lack o monetarv resources. or other material resources such as
housing. 1o be sure. there are legislatie proisions relating to the proision o social securitv beneits. or
to be proision o accommodation to the homeless. But the entitlements contained in these bodies o law
are highlv contingentthose claiming beneits or access to housing hae a substantial list o conditions
that thev must satisv beore thev will be helped. 1he act that the rhetoric o law emplovs concepts such
as libertv` or justice` does not mean that the bodv o substantie law is actuallv able to delier social
justice to all the citizens o the United Kingdom.
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2. Other Jurisdictions
2.J Origin of Administrative Law in South Africa
JJ
Although South Arican law in general is a complex mixture o common law
12
which is basicallv Roman-
Dutch in character. with large chunks o Lnglish doctrine. chielv in the areas o public and commercial
law.
13
it can be said that the South Arican administratie law is mainlv based upon the traditional British
model o administratie law and its doctrines. traditions and conentions.
14
1his Lnglish svstem can be
characterised bv the kevwords legislatie supremacv and parliamentarv soereigntv. ministerial
responsibilitv or administratie action. the Dicevan doctrine o the Rule o Law and the idea o separation
o powers.
15
1he soereigntv o parliament. especiallv. meant that courts could not question the aliditv o
dulv enacted Acts o Parliament
16
nor could thev impose their own standards upon the administratie
process.
1
1his had great inluence on the question o judicial reiew o administratie action. On the
other hand. the courts generallv did create law bv deeloping the legal requirements or a alid
administratie act
18
and thev also plaved a crucial role in the scrutinv o the administration and its action.
19
In contrast to the German svstem o administratie law or example. the ocus was more on the
relationship between the administratie bodies and the courts and not on the wav in which administratie
decisions are taken bv the administratie bodv.
20
In this context. South Arican administratie law had to
be considered as a legal svstem with retrospectie ocus concentrating on judicial remedies or
maladministration instead o being more prospectie in creating procedures and structures that would
oster good decision-making.
21
1hese preliminarv remarks hae led to the question o how the South
Arican administratie law has dealt with the problem o executie discretionarv powers and judicial
reiew in general and with unreasonableness as a ground o judicial reiew in particular.
2.2 Origins of American Law
22
Just as there was no uniorm eolution o political organization in the colonies. there was no uniorm
growth o colonial law. 1he same diersitv as to extent o crown control. date o settlement. and
11
Lange. (.. |vrea.ovabteve.. a. a Crovva ot vaiciat Rerier iv ovtb .trica. Nomos Verlagsgesellschat. Baden-Baden. 2002. p. 11.
12
(order & Maluwa .avivi.tratire v.tice iv ovtberv .trica: ac/grovva ava ove ..ve. in (order & Maluwa eds, .avivi.tratire
v.tice iv ovtberv .trica 199, 3 5: (order vporervevt ava .ccovvtabitity 21: Parker 1he Administratie Justice` proision o
the constitution o the Republic o Namibia: a constitutional protection o judicial reiew and tribunal adjudication under
administratie law` 199 C. 88 89.
13
(order 1989 .R 23: Parker 1991 C. 89.
14
(order vporervevt ava .ccovvtabitity page 21: Lrath 1996 DOV 314: ater .avivi.tratire ar 30.
15
ater .avivi.tratire ar 30. 31: Asimow 1996 . 624.
16
Burns .avivi.tratire ar 6: Van \vk Administratie Justice in erv.teiv r e.ter and ^et r e Rov 199 .R 249 251:
Motala Cov.titvtiovat optiov. tor a aevocratic ovtb .trica 1994, 206.
1
Baxter .avivi.tratire ar 30.
18
Baxter .avivi.tratire ar 83.
19
Grant .avivi.tratire ar tbrovgb tbe ca.e. 1998, 1.
20
Lrath 1996 DOV 314.
21
Breakwater Declaration 1993 .aa vriaica 18.
22
larnsworth. A.. .v vtroavctiov to tbe egat y.tev ot tbe |vitea tate.. Oceana Publications Inc. USA. 1983. pp. 6. 11. & 12.
^it. oppe
18
conditions o deelopment resulted in thirteen separate legal svstems. each with its distinct historical
background. lurthermore. as the boundaries o the United States were extended. large areas were added
which had been subjected to Spanish. Mexican. or lrench soereigntv or substantial periods o time. A
ew states. most notablv Louisiana. still show the imprint o such origins. and the ciil law institution o
communitv propertv can be ound in eight states todav. Neertheless. the similarities among state law ar
outweigh the dierences and there is on the whole an unmistakable amilv resemblance to the law o
Lngland. 1hat the inluence should hae been Lnglish is hardlv surprising in iew o the language and
nationalitv o most o the colonists: that this inluence should hae met with the resistance that it did calls
or some explanation.
|.|
1he inluence o Lnglish law in America. which had irtuallv ended bv the time o the (iil \ar. is
negligible todav. Onlv inrequentlv are the more recent Lnglish cases cited in contemporarv American
judicial opinions and een more rarelv will a question arise that turns on the reception o Lnglish law. \et
the undamental approach. much o the ocabularv. and manv o the principles and concepts o the
common law are as amiliar in the United States as in Lngland. Lnglish cases. though in relatielv small
numbers. are still part o the taught tradition` in American law schools. And while American lawvers and
judges mav commonlv ignore Lnglish authorities. thev are neertheless conditioned bv Lnglish ideas that
were imported into American law oer a centurv and a hal ago. loremost among these are: irst. the
concept o supremacv o law. as exempliied in this countrv bv the distinctie principle that een the state
is subject to judicial reiew under constitutional standards: second. the tradition o precedent. according to
which later decisions are based on earlier cases: and third. the notion o a trials as a contentious
proceeding. a contest. oten beore a jurv. in which the adersarv parties take the initiatie and in which
the role o the judge is that o umpire rather than o inquisitor.
2.3 Law in Scotland
23
\hen we examine the law in Scotland certain unique problems conront us. Most Scots would claim
Scotland is a nation. (ertainlv in most sports though not at the Olvmpic Games, it counts as a nation.
But it is not in itsel a state. In the Scottish Oice it has onlv some o the apparatus o a state. part o that
o the United Kingdom o Great Britain and Northern Ireland. It has no legislature o its own. but its
representaties participate in special wavs in the Parliament o the United Kingdom. It does hae its own
courts. but it shares with the rest o the United Kingdom a common highest court in non-criminal cases.
Most o its tribunals are part o a United Kingdom organisation. It has its own legal proession.. Some o
its laws are peculiar to Scotland. some are common to the whole o Britain i.e. Lngland. Scotland and
23
\hile. R. & \illock. I.. )be cotti.b egat y.tev. Butterworth & (o Publishers, Ltd. Ldinburgh. 1993. pp. 6-.
|virer.ity ot avvorer Cevtre tor .pptiea ivgvi.tic. ava peciat avgvage. Ca.e. c Materiat.: vgti.b tor ar
19
\ales,. some are shared with the rest o the United Kingdom i.e. with Northern Ireland as well,. Some
are separate in orm. but almost identical in substance. |.|
2.4 1he Development of Lnglish Law in Ireland
24
It is alreadv clear that the legal historv o Ireland is. in some respects. also its political historv. lrom the
antage point o the late 20
th
(enturv. it is clear that Ireland was to become a satellite o Lnglish control
up to independence in 1922. lrom 1800 onwards. in the wake o the .ct ot |viov. Lnglish rule in Ireland
took the orm which was to be the basis or so much iolence. ailed insurrections and complaints until
the granting o independence. During the late 18
th
(enturv. there had been an Irish Parliament Grattan`s
Parliament,. but the Act o Union o 1800 centralised control in London until 1922.
Going urther back in time. Lnglish rule had been a practical realitv onlv since the 16
th
or 1
th
(enturv.
and prior to that date Lnglish law and Lnglish rule onlv applied in the area around Dublin known as 1he
Pale where Lnglish traders were entitled to operate the King`s law. Outside the Pale. natie customs and
rules. known as the rebov ar. continued to be applied in spite o decrees o the Lnglish kings that such
rules were contrarv to Lnglish law and o no eect. 1he modern phrase bevond the Pale` relects this
point. 1he natie Irish were ruled bv local chies who came into inrequent contact with the Lnglish. 1he
sophistication o the Brehon Law can be gauged rom the substantial literature which remains or scholars
to discuss.
Beore the 16
th
and 1
th
(enturies. thereore. Lnglish rule in Ireland was a matter o occasional sorties into
the hinterland rather than a matter o the tvpe o permanent enorcement o laws which took place in
Lngland and \ales. 1he irst. and most inamous perhaps. rom the Irish perspectie was the Norman
Inasion o Ireland` o 110. \hile the landing o Strongbow Richard litzGilbert. Larl o Pembroke, in
\exord mav hae had immense svmbolic signiicance leading to the reerence to 00 vears o
oppression,. it did not hae the immediate eect o transorming Ireland into an Lnglish colonv. It was.
howeer. the beginning o a process which inoled the passing o Poyvivg`. .ct o 1494. which stated that
all laws passed bv the Lnglish Parliament applied to Ireland. but which did not hae ull orce and eect
in Ireland. ultimatelv. until the passing o the Act o Union in 1800. loweer. as mentioned at the
beginning o this section. whateer the position prior to 1800. Ireland was irmlv in Lnglish control rom
that date and all laws passed up to then had eect in Ireland rom that time: some o them continue to do
so. 1he court svstem which was established in Ireland during the 19
th
(enturv was modelled on the svstem
which had deeloped in Lngland since the 1066 Norman (onquest. and so rom our present antage
point. the court svstem which existed up to 1922 owed its origins to eents in Lngland rom the 11
th
24
Bvrne. R. & Mc(utcheon. J.. )be ri.b egat y.tev. Butterworth Ireland, Ltd. 1995. pp. 9-10.
^it. oppe
20
(enturv onwards. een i Ireland came to inherit that legacv at a relatielv late stage. In this respect.
Ireland was the irst recipient o the Lnglish legal svstem |.|.
|virer.ity ot avvorer Cevtre tor .pptiea ivgvi.tic. ava peciat avgvage. Ca.e. c Materiat.: vgti.b tor ar
21
3. Contract Law
25
3.J Introduction
3.J.J Definition of Contract
A contract mav be deined as an agreement which is either enorced bv law or recognised bv law as
aecting the legal rights or duties o the parties. 1he law o contract is. thereore. primarilv concerned
with three questions: is there an agreement is it one which should be legallv recognised or enorced and
just how is the agreement enorced. or in other words. what remedies are aailable to the injured partv
when a contract has been broken
1his introductorv chapter deals with a number o general points arising mainlv. though not exclusielv.
out o the three questions just put.
3.J.2 Contract and Contracts
1he subject-matter o this book is the law o contract`. It was ormerlv the ashion. which in some parts
o the common law world still persists. to reer to the law o contracts in the plural,. 1he point o
modern reerences to a law o contract in the singular, is to indicate that the law has a general or uniied
theorv o contract. that is. one which applies to all contracts irrespectie o their content or subject-matter.
A contract mav relate to anvone or more o a large number o transactions. such as sale o goods. land or
shares. emplovment. carriage. hire. lease. mortgage and so orth. A general theorv o contract asserts that
there is at least a substantial bodv o rules which applies to all contracts in common: and that these rules
constitute the law o contract`. 1his is the theorv o modern Lnglish law. On the other hand it has been
said that Roman law had not a theorv o contract. but a theorv o contracts`.
26
\hat is meant is. that the
rules which goerned the ormation and eects o a contract depended either on its content e.g. whether
it was sale or loan, or on its orm e.g. whether it was expressed orallv or in writing,. Neither theorv can be
accepted without qualiication. In most modern svstems o law there is. indeed. a bodv o rules which
applies to contracts generallv. 1hese rules mav. howeer. applv to particular transactions such as sale.
emplovment or carriage. subject to certain modiications: and such transactions mav also be goerned bv
special rules peculiar to them. in the sense that thev hae no close analogv with general rules which applv
to other transactions. In this book our concern will be with the general rules. and to some extent with the
modiied orm in which thev applv to particular transactions. At the same time. it is necessarv to warn the
reader that the general law o contract` is something o an abstraction. since most contracts obiouslv
concern some particular class o transaction: and since there is alwavs some degree o danger in assuming
that a general` rule applies at least without modiication, to a contract o the particular tvpe under
consideration.
25
1reitel. G.. .v Ovttive ot tbe ar ot Covtract. Butterworths. London. 1995. pp. 1-2.
26
Buckland and McNair. Rovav ar ava Covvov ar 2
nd
edn,. p. 195.
^it. oppe
22
3.J.3 Agreement
In the normal case. a contract results rom an agreement between the parties to it: but the description o a
contract as an agreement is neertheless subject to a number o important qualiications.
1he irst o these is that the law generallv speaking applies an objectie test o agreement. I the words or
conduct o one partv. A. are such as to induce the other. B. reasonablv to beliee that A is assenting to
certain terms proposed bv B. then A will generallv be held so to hae assented. whateer his actual state o
mind mav hae been.
2
1he law adopts this objectie test because a person who reasonablv belieed that a
contractual proposal had been made to him might be seriouslv prejudiced i he could not take it at its ace
alue. 1he principle is. howeer: one o conenience onlv. so that it will not be applied where. on balance.
the inconenience to A o applving the objectie test. exceeds the inconenience to B o allowing A to
relv on his actual intention: or example. where B knows that A`s actual state o mind was not in
accordance with the objectie appearance created bv A`s conduct.
28
1he position is probablv the same
where. though a reasonable person in B`s position would hae belieed that A was assenting to the terms
in question. B actuallv had no such belie: or in such a case B cannot suer the prejudice against which
the objectie test is meant to protect him.
1he second qualiication is that. een where agreement determines the existence o a contract. it does not
necessarilv determine all the contents or scope o a contract. 1hese matters are oten determined bv so-
called implied terms`. 1hese mav be diided into terms implied iv tact and terms implied iv tar |.|. Onlv
terms implied in act are trulv based on the intention o the parties. 1erms implied in law are duties prima
acie imposed bv law: and with respect to them. the intention o the parties is releant onlv insoar as it
mav be open to the parties to exclude the implied terms bv contrarv agreement.
1hirdlv. there are cases. commonlv discussed under the general heading o contract. in which the
obligation does not trulv arise out o an agreement between two parties. but rather out o a promise made
bv one o them. 1his would be the position where a person made a gratuitous promise in such a orm that
it was legallv binding: or example. in a deed. Such a promise can bind the promisor een beore it is
communicated to the promisee and hence without anv agreement between the parties.
lourthlv. the idea that contract depends on agreement must be qualiied in cases in which one partv is in a
erv much stronger bargaining position than the other. so that the ormer can in a sense impose his terms
on the latter. 1his possibilitv is illustrated bv the standard orm contracts which are used bv manv
commercial suppliers o goods or serices. Under such contracts the customer mav be bound bv terms o
2
!it.ov tPaat) c Co . r Partevreeaerei avvab tvvevtbat |1983| 1 A( 854. as interpreted in .ttiea Marive )rav.port tta r 1ate ao
Rio Doce ^aregacao .. )be eoviaa. D |1985| 2 All LR 96.
28
See covv ta r Cvav Cvav bippivg tPte) ta. )be Cotaev ear |198| 1 Llovd`s Rep 330 at 341
|virer.ity ot avvorer Cevtre tor .pptiea ivgvi.tic. ava peciat avgvage. Ca.e. c Materiat.: vgti.b tor ar
23
which he is not aware because he has taken his chance o whateer terms were contained in the orm. or
he mav hae agreed reluctantlv. or he mav not in truth hae agreed` at all.
3.J.4 Ireedom of Contract
In its most obious sense. the expression reedom o contract` is used to reer to the general principle
that the law does not restrict the terms on which parties mav contract: it will not gie relie merelv because
the terms o the contract are harsh or unair to one partv. Manv o the basic principles o the modern law
o contract were settled in the last centurv. when. in the light o the preailing tai..e. taire philosophv. it
was thought wrong to interere with priate agreements on such grounds. 1he present trend is rather to
stress abuses to which the principle o reedom o contract` can gie rise: so that the principle has been
considerablv restricted. both bv legislation and bv judicial decision. Verv substantial legislatie inroads on
the principle hae. or example. been made in the law o landlord and tenant. and in the law o consumer
contracts: while restrictions on the eectieness o exemption clauses in standard orm contracts are due
partlv to judicial decisions and partlv to legislation. Such deelopments now gie a good deal o protection
to the person who is assumed to be the weaker partv to a contractual relationship. But in most commercial
transactions between parties. bargaining at arm`s length. the principle o reedom o contract` remains an
important one.
lreedom o contract` is also used in another sense. to reer to the principle that. in general. a person is
not bv law compelled to enter into a contract. lere again the law has rom time to time made exceptions
to the general rule on grounds o public interest. 1he earliest exceptions related to the so-called common
callings` o common carriers and innkeepers. Such persons could not reuse their serices as thev pleased:
thev could do so onlv on certain grounds speciied bv law. In modern times a similar principle has been
extended bv legislation oer a wider area so that. or example. a supplv o goods mav not be reused to a
retailer on the ground o price-cutting:
29
emplovment or accommodation or certain other acilities mav not.
in certain circumstances. be reused to a person on grounds o race or sex:
30
it is unlawul to reuse to
emplov a person because he is. or is not. a member o a trade union`:
31
and exclusion rom a trade union
on one o a number o speciied grounds gies rise to a claim or compensation.
32
Len at common law
there seems to be a remedv or arbitrarv exclusion rom an association e.g. on religious or political
grounds,. i the exclusion depries the person in question o the opportunitv to exercise a particular
proession.
33
29
Resale Prices Act 196. s 11.
30
Race Relations Act 196. Pts II and III: Sex Discrimination Act 195. Pts II and III.
31
1rade Union and Labour Relations (onsolidation, Act 1992. s 13 1,a,.
32
1rade Union and Labour Relations (onsolidation, Act 1992. ss 14-1. as substituted bv 1rade Union Reorm and
Lmplovment Rights Act 1993. s 14.
33
See ^aget r eitaev |1996| 2 OB 633 a case o sex discrimination. now unlawul under Sex Discrimination Act 195. s 13,.
^it. oppe
24
It is obious that. the more the law intereres with the relationship o the parties. the less important the
actor o agreement becomes. In some situations the degree o intererence is so large that it becomes
improper to describe the relationship between the parties as a contract. One obious illustration o such a
relationship is that o marriage. lere. the parties can onlv decide whether or not to enter into the
relationship. Once thev hae done so. its essential incidents are determined bv law: or example. an
agreement that a marriage should last or a trial period o three vears would not hae anv legal eect. In
other cases. one o the parties mav not hae anv choice at all: or example where a person`s propertv is
compulsorilv acquired against his will under statutorv powers. 1hese cases dier rom those discussed in
the preceding paragraph. In those cases. the relationship is contractual because the parties hae a
considerable degree o legal reedom to decide upon the terms o their relationship. een though thev mav
enter it under some degree o legal compulsion.
3.J.5 Reasons for Lnforcing Contracts
1he legal enorceabilitv o contractual agreements is so well established. in all western svstems o law. that
a discussion o the reasons or it mav seem to be superluous. \et such a discussion is important in
relation to the topic o remedies or breach o contract. since the principles on which enorcement is
based will determine the oten diicult question o the extent to which enorcement is to be carried.
1hree reasons or the enorcement o contracts are commonlv gien. and thev mav be illustrated bv some
simple hvpothetical cases. lirst. A has agreed to buv something rom B and paid or it in adance but B
has not deliered it. I B could neertheless keep the adance pavment. he would be unjustlv enriched: and
it is thereore generallv agreed that he should at the erv least pav back the monev to A. 1his process is
sometimes reerred to as protecting A`s restitution interest`. Secondlv. A has agreed to render some
serice to B at a distant place. le incurs traelling expenses in getting to that place but on his arrial there
B repudiates the agreement. lere A`s expenditure has not enriched B. but it is neertheless generallv held
that A should hae a remedv against B. in respect o the wasted expenditure which he has incurred in
reliance on the contract. 1his process is sometimes called the protection o A`s reliance interest`. But the
law o contract goes bevond protecting the restitution and reliance interests. as a third illustration will
show. A oers to buv a picture rom B or +20.000 and B accepts the oer. 1he same dav. beore A has
paid B or incurred anv expense in reliance on the contract. B repudiates it bv reusing to delier the
picture. 1here is no doubt that A can enorce the contract: and the reason gien is. that A`s expectations
arising out o the contract hae been disappointed. It is said that the law here protects A`s epectatiov
ivtere.t. 1he protection o such expectations is the characteristic eature o the law o contract. O course.
other expectations are protected bv other branches o the law: or example. under the law o torts a
person who has been injured bv another`s negligence mav recoer damages or loss o his expected
earnings. But this expectation exists independentlv o the negligence giing rise to the legal liabilitv to
compensate or its loss. 1he law o contract. on the other hand. protects expectations which owe their
existence solelv to the erv agreement or breach o which the action is brought. 1he common
|virer.ity ot avvorer Cevtre tor .pptiea ivgvi.tic. ava peciat avgvage. Ca.e. c Materiat.: vgti.b tor ar
25
explanation o this state o the law is that such protection is necessarv in the interests o commercial
conenience: that business could not go on` unless contractual expectations were protected bv law. 1his is
probablv too extreme a iew. In practice. a good deal o business does go on without the sanction o legal
enorceabilitv o expectations. One mav instance the erv considerable credit betting industrv: or business
arrangements which are so ague as not to amount to binding contracts. or which are expressed to be
gentlemen`s agreements`. On the other hand the rule o law bv which agreements or the sale o homes
subject to contract` are not legallv binding has been criticised preciselv because o the inconenience
which it can cause to the disappointed partv. 1he protection o contractual expectations does mitigate
such inconenience and so tends to promote stabilitv: it also proides the legal ramework or the
operation o share. commoditv and similar markets. 1his is the best explanation or the general principle
that the law will protect these expectations. een where there has been no receipt o beneit under the
contract and no loss suered bv action in reliance on it.
3.J.6 Common Law and Lquity
Lnglish law recognises a distinction between common law and equitv: and hence between legal and
equitable rights. remedies and deences. Originallv. the distinction was based on the act that common law
and equitv were distinct svstems o law. administered in separate courts. 1his separate administration o
the two svstems was abolished oer a hundred vears ago. so that both are now administered in the same
courts. Len so. the distinction remains o considerable importance to an understanding o the law o
contract. Although generalisations on the point are hazardous. it is broadlv speaking true that equitv oten
takes a less rigid or literal approach than the common law to contract problems: that it pavs greater regard
to substance than to orm: and that it oten proides more satisactorv remedies than those aailable at
common law. Dierences between the common law and equitable approaches to contract problems will
thereore hae to be discussed at manv points in the ollowing |sections|.
3.2 Agreement
1his |section| is concerned with the process bv which the parties to a contract reach agreement. Generallv.
that process can be analvsed into the acceptance bv one partv o an oer made bv another. lor example.
A mav oer to sell B 20 tons o coal or ]500: and when B savs I accept` or uses words to that eect, a
contract is concluded. In practice. the course o contractual negotiations is oten erv much more
complex than this. \hen parties begin to negotiate there mav be considerable dierences between them
as to price. quantitv. qualitv. delierv dates. terms o credit and so orth. Graduallv. bv a series o
concessions. thev moe towards agreement. and it is oten hard to sav just when an oer has been
accepted. lor the purpose o answering this question. the law distinguishes between arious steps or
stages in negotiations.
^it. oppe
26
3.2.J Offer and Invitation to 1reat
An oer is a statement to the eect that the person making it is willing to contract on the terms stated. as
soon as these are accepted bv the person to whom the statement is addressed. 1he person making the
statement is called the otteror: the person to whom it is made is called the otteree or i he accepts the oer,
the acceptor. 1he oer mav be made to an indiidual. or to a group o persons. or to the public at large: it
mav be made expresslv or bv conduct. Under the objectie test. A`s words or conduct can constitute an
oer i thev induce B reasonablv to beliee that A intended to make an oer to him. een though A
actuallv had no such intention: or example. where a uniersitv oered a place to an intending student as a
result o a clerical error.
34
Len ailure to act mav occasionallv amount to an oer: or example. ailure to
assert a right or remedv mav amount to an oer to abandon it.
35
But inactiitv is onlv likelv to hae this
eect when combined with other circumstances indicating that A has the necessarv intention: inactiitv
alone is usuallv too equiocal to gie B reasonable grounds or thinking that A is making an oer to him.
36
1he essential eature o an oer is that the person making it must actuallv or objectielv, intend to be
bound without urther negotiation. bv a simple acceptance o his terms. 1hus there is no oer where the
owner o a house. in response to an enquirv rom a person who wishes to buv it. states the price at which
he might be prepared to sell:
3
nor een where the owner wishes to sell and inites oers at or about a
speciied price. In the latter case he is said to make an initation to treat`. and he is not bound to accept
the highest or anv other oer. In border-line cases it is obiouslv hard to determine with what intention
the statement was made: but the diicultv is mitigated in two wavs. lirst. it is enough to show that the
statement was reasonablv understood bv the person to whom it was addressed as indicating an intention
to be bound: and secondlv. the character o certain requentlv-recurring tvpes o statements is settled bv
rules o law. at anv rate in the absence o clear eidence o contrarv intention.
1hus it is generallv accepted in Lngland that a displav o price-marked goods in a shop-window. or on the
sheles o a sel-serice shop. is usuallv no more than an initation to treat.
38
1he oer in such a case
comes rom the customer. An indication o the price at which petrol is to be sold at a illing station is.
similarlv. onlv an initation to treat.
39
Likewise. adertisements in newspapers or in tradesmen`s circulars
are commonlv held not to amount to oers.
40
1hese rules mav applv een though the person making the
statement calls it an oer: a shop`s special oer` mav well be nothing more than an initation to treat. But
it should not be supposed that all displavs and adertisements are onlv initations to treat. 1hev can be
34
Morav r |virer.ity Cottege attora t^o 2) |1993| 4 LLR 18. (A.
35
.var et Cie . r Marive )rav.oceav ta. )be ptevaia vv |1981| OB 694 see now Arbitration Act 1950. s 13A. as inserted bv
the (ourts and Legal Serices Act 1990. s 102,: Cottiv r Dv/e ot !e.tviv.ter |1985| OB 581.
36
avvab tvvevtbatt |1983| 1 A( 854: .ttiea Marive )rav.port ta r 1ate ao Rio Doce ^aregacao .. )be eoviaa. D 1985, 2 All
LR 96: Cebr 1av !eetae cbeepraart/avtor 1 r Cia ^ariera ea Orievt . |198| 2 Llovd`s Rep 223: ooa Corpv ot vaia r
.vtcti.o bippivg Corpv |1998| 2 All LR 513.
3
Cib.ov r Mavcbe.ter City Covvcit |199| 1 All LR 92.
38
Pbarvacevticat ociety ot Creat ritaiv r oot. Ca.b Cbevi.t. |1953| 1 OB 401.
39
..o Petrotevv ta r Cv.tov. ava ci.e Covr. |196| 1 \LR 1 at 5. 6. 11.
40
Partriage r Crittevaev |1968| 2 All LR 421.
|virer.ity ot avvorer Cevtre tor .pptiea ivgvi.tic. ava peciat avgvage. Ca.e. c Materiat.: vgti.b tor ar
2
oers i the intention to be bound is suicientlv clear: or example. where a notice in a shop window
stated that we will beat anv 1V.price bv ]20 on the spot`.
41
A notice displaved at the entrance to an
automatic car park has likewise been described as an oer. presumablv because no urther act o
acceptance on the part o the proprietor was contemplated ater the customer droe in.
42
lor the same
reason. adertisements o rewards or the return o or example, lost propertv are commonlv held to be
oers. Similarlv. in Cartitt r Carbotic vo/e att Co |1893|
43
the manuacturers o carbolic smoke balls
promised to pav ]100 to anv person who caught inluenza ater using the appliance as directed: and thev
added that thev had deposited ]1000 with a named bank shewing our sinceritv in the matter`. It was held
that the adertisement was an oer.
It is a common commercial practice to ask or tenders` or the purchase or sale o goods. or or the
supplv o serices. In this situation. the person asking or tenders normallv makes an initation to treat:
the oer comes rom the person making the tender. \here the tender is or an indeinite amount e.g. or
so much coal. not exceeding 1.000 tons. as vou mav order`, it constitutes a standing oer which mav be
accepted rom time to time as speciic quantities are ordered.
44
1he person to whom a tender is made is
normallv ree to accept or reject it as he pleases.
45
1his general rule is. howeer. qualiied in a number o
wavs. lirst. the initation or tenders mav indicate that the best tender will be accepted: the initation will
then be an oer and the best tender which complies with its terms will amount to an acceptance. giing
rise to a contract.
46
Secondlv. the terms o the initation mav bind the person making it at least to consider
though not to accept, such a tender.
4
1hirdlv. in the case o tenders or certain public works. the
reedom o the bodv seeking the tenders is restricted bv legislation. the object o which is to preent
unair discrimination in the award o such contracts between contractors rom member states o the
Luropean Union.
48
In the case o auction sales. no oer or sale is made bv the adertisement o the auction:
49
nor bv putting
the goods up or bidding. 1he oer is made bv the bidder and accepted bv the auctioneer in the
customarv manner. i.e. usuallv bv the all o the hammer`.
50
Len where the auction is expresslv said to be
without resere` there is no contract o sale i the auctioneer reuses to knock the goods down to the
highest bidder: though it has been held that the auctioneer was liable or breach o a separate undertaking
that the auction would be without resere.
51
41
R r !arric/.bire Covvty. e p obv.ov |1993| A( 583 at 588.
42
)borvtov r boe ave Par/ivg ta |191| 2 OB 163 at 169.
43
|1893| 1 OB 256.
44
Percirat r CC ..ytvv. ava Mevtat Deticievcy Covvittee 1918, 8 LJKB 6.
45
See pevcer r araivg 180, LR 5 (P 561: !ittiav acey tovv.tor) ta r Dari. |195| 1 \LR 932 at 939.
46
arreta vre.tvevt. ta r Royat )rv.t Co ot Cavaaa tC) ta |1986| A( 20.
4
tac/poot ava ytae .ero Ctvb ta r tac/poot orovgb Covvcit |1990| 3 All LR 25.
48
SI 1991269: SI 19912680: SI 1992329.
49
arri. r ^ic/er.ov 183, LR 8 OB 286.
50
Sale o Goods Act 199. s 52,.
51
!artor r arri.ov 1859, 1 L & L 309. contrast. in Scotland. evric/ r Macaovata ra.er c Co ta 1904, 6 l 850.
^it. oppe
28
In contracts or the carriage o passengers. manv iews hae been expressed on the question when and bv
whom the oer is made. At the one extreme. a railwav time-table has been held to be an oer:
52
and it has
been suggested that the act o running a bus constitutes an oer to intending passengers.
53
Another iew
is that the carrier does not make the oer until he issues the ticket. and that the contract is made when the
passenger keeps the ticket without objection.
54
or when he claims his seat.
55
\here a booking is made in
adance. the oer mav come rom the passenger. or it has been said that the contract is made as soon as
the carrier accepts` the booking.
56
or when he issues the tickets.
5
1here is no single rule which determines
the time when the contract o carriage is made: the question depends in each case on the wording o the
releant document and on the circumstances in which it was issued.
3.2.2 Acceptance and Counter-Offer
Assuming that an oer has been made. a contract comes into existence when the oer is accepted. 1o
accept an oer. the oeree must indicate his assent to the terms o the oer. le mav do this either
expresslv bv words o acceptance, or bv conduct. In most cases. the acceptance. no less than the oer.
contains a promise. 1he contract is then said to be a bilateral one. that is. one under which each partv
undertakes obligations: or example one partv agrees to delier goods and the other to accept and to pav
or them. 1here mav also be a unilateral contract. under which onlv one partv comes under an obligation.
1he stock examples are a promise bv A to pav ]100 to B. i B walks rom London to \ork: or one to pav
B ]l00 i he rerains rom smoking until he is 21. lere. onlv A undertakes an obligation: B does not
promise to do. or to rerain rom doing. anvthing.
1he most important rule with regard to an acceptance is that it must correspond with the oer. I it seeks
to qualiv or to arv the oer. it is ineectie as an acceptance: or example. an oer to sell 1.200 tons o
iron is not accepted bv a replv stating that the oeree will take 800 tons.
58
1riial ariations between the
terms o the oer and acceptance mav be disregarded: and the same is true o ariations which merelv
make express a term which the law would in anv eent implv.
59
Subject to these qualiications. a purported
acceptance which introduces dierent terms is not in law an acceptance but a counter-oer. As such it
mav hae two legal consequences. lirst. it rejects the original oer. so that the original oeree cannot
subsequentlv accept it: e.g. in the aboe example he cannot send a second letter accepting the oer to sell
1.200 tons. Secondlv. it amounts to a resh oer. which the original oeror who has now become the
oeree under the counter-oer, mav accept. A counter-oer mav be ollowed bv a urther
communication o the same character: and complicated negotiations mav take the orm o a long series o
52
Devtov r Creat ^ortberv Rty Co 1856, 5 L & B 860.
53
!it/ie r ovaov Pa..evger )rav.port oara |194| 1 All LR 258 at 259.
54
)borvtov r boe ave Par/ivg ta |191| 2 OB 163 at 169.
55
MacRobert.ov Mitter .irtive errice. r Cov ot tate )aatiov ot tate ot !e.terv .v.tratia 195, 8 ALR 131.
56
)be agte |19| 2 Llovd`s Rep 0.
5
Dittov r attic bippivg Co. )be Mi/bait ervovtor |1991| Llovd`s Rep 155 at 159.
58
)ivv r ottvav c Co 183, 29 L1 21.
59
ar/ r Ovtbraite |1991| 2 Llovd`s Rep 132 at 139.
|virer.ity ot avvorer Cevtre tor .pptiea ivgvi.tic. ava peciat avgvage. Ca.e. c Materiat.: vgti.b tor ar
29
counter-oers. alleged to hae culminated in a concluded agreement when one o the counter-oers is
inallv accepted without. or with onlv triial. ariations. In such a situation. the court must look at the
whole course o negotiations
60
to determine whether. and. i so. exactlv when the parties hae reached
agreement.
1he rules relating to counter-oers are particularlv important in the increasinglv common situation.
commonlv known as the battle o orms`. in which each partv sends the other a preiouslv prepared orm
containing the terms on which he is prepared to contract. lor example. a buver oers to buv goods on the
terms o his purchase orm` and the seller purports to accept the oer on the terms o his sales orm`. I.
as is probable. the terms o the orms dier since the one is drated in the buver`s. and the other in the
seller`s. interest, there is at this stage no contract. All that has happened is that the seller has made a
counter-oer. 1his counter-oer mav be accepted bv conduct when the buver takes delierv o the goods.
In that eent. there will be a contract on the terms o the seller`s orm.
61
On the other hand. the contract
would be on the buver`s terms i the original oer had come rom the seller. and had been ollowed bv a
buver`s counter-oer which had in turn been accepted bv the conduct o the seller. 1hus ictorv in the
battle o orms` normallv goes to the partv who ires the last shot. i.e. to the partv bv whom the last orm
in the series is despatched. But this is not inariablv true: or i that partv has. in his own last
communication. indicated his acceptance o the terms stated in the other partv`s orm. the contract will be
made on those terms.
62
3.2.3 Communication of Acceptance
As a general rule. an acceptance has no eect unless and until it is communicated to the oeror.
63
1his
means that the act o acceptance must be brought to the notice o the oeror. I the words o acceptance
are drowned bv an aircrat lving oerhead.` or spoken into a telephone which has gone dead. there is no
contract.
64
1he reason or this rule is that it might be unjust to the oeror to hold him bound i he did not
know that his oer had been accepted. On the other hand. no injustice is normallv caused to the oeree
bv holding that there is no contract. In the cases put. he knows at once that there has been a ailure o
communication. so that he can take steps to retriee the situation bv making a second attempt to
communicate the acceptance. lor the purpose o the present rule. the acceptance need not be
communicated to the oeror personallv. It is suicient to communicate it to an agent authorised to
receie it. such as a companv`s senior oicial. Obiouslv. leaing a message with a porter would not
suice.
60
v..ey r orveyPayve 189, 4 App (as 311.
61
See riti.b Roaa errice. r . 1 Crvtcbtey ta |196| 2 All LR 85 at 8 and |1968| 1 All LR 811 at 81.
62
vtter Macbive )oot Co ta r CettO Corpv tvgtava) ta |199| 1 All LR 965.
63
rogaev r Metropotitav Rty 18, 2 App (as 666: riv/ibov ta r tabag tabt vva tabtrarevbavaet.ge.ett.cbatt vb |1983| 2 A( 34.
64
vtore. ta r Mite. ar a.t Corpv |1955| 2 OB 32 at 333.
^it. oppe
30
1here are three exceptions to the general rule that an acceptance must actuallv be communication. 1he
irst is that there mav be a contract when the ailure in communication is in some sense due to the ault. or
at anv rate to the act or omission. o the oeror himsel.
65
1his would be the position i the oeror did
not hear words o acceptance spoken into a telephone simplv because. at the crucial point. he had put the
telephone down without telling the oeree that he was doing this. 1he second exception arises where the
terms o the oer expresslv. or bv implication. dispense with communication o acceptance. 1his is oten
the position where the oer inites acceptance bv conduct.
66
lor example. in Cartitt r Carbotic vo/e att
Co the plainti accepted the deendants` oer bv simplv using the smoke ball: she did not at this stage
need to tell them that she had done so. 1he contract which arises between the issuer o a credit card and a
retailer to whom the card is presented bv a customer similarlv arises when the retailer deals with the
customer. een though the retailer has not at this stage communicated with the issuer o the card.
6
And
where goods are ordered rom a supplier. it mav be that the oer to buv can be accepted bv simplv
despatching the goods. 1he third exception relates to acceptances sent through the post. 1his is a complex
subject calling or separate treatment.
3.2.4 Postal Acceptance
1here are manv possible answers to the question when an acceptance sent bv post should become
operatie. At the one extreme. it is possible to take the iew that such an acceptance should onlv take
eect when it is actuallv brought to the notice o the oeror: at the other extreme. there is the iew that
such an acceptance should take eect as soon as it is posted. Intermediate possibilities are that the
acceptance should take eect when it is deliered to the oeror`s address. or when it should hae arried
there in the ordinarv course o post. Anv iew is bound to gie rise to the possibilitv o some hardship to
one or other o the parties. especiallv where the acceptance is lost or delaved in the post. I the contract is
complete on posting. the oeror mav be bound beore he knows o the acceptance: and this result mav be
justiied bv saving that he takes the risk o being placed in such a position bv initiating negotiations
through the medium o the post. But when it is recalled that a contract mav result rom a lengthv
sequence o counter-oers leading in the end to an acceptance. it will be obious that the inal oeror is
not necessarilv the person who has initiated the negotiations. I. on the other hand. the contract is not
complete till the acceptance reaches the oeror. then the oeree will ind it hard to know exactlv when he
can relv on haing secured a irm contract. 1here is no wav o reconciling these interests. 1he choice
between the arious solutions is an arbitrarv one and can onlv be justiied on grounds o conenience.
Len this justiication ineitablv takes the point o iew o one or other partv. Lnglish law looks primarilv
to the conenience o the oeree. and this is best sered bv holding that the acceptance takes eect as
soon as it is posted.
68
or i the letter o acceptance goes astrav or is delaved the oeree will usuallv not
65
Ibid.
66
1itot . r ^orett ta. )be avta Ctara |1993| 2 Llovd`s Rep 301 at 304.
6
ir.t port ta r arctay. av/ ptc |1993| 3 All LR 89 at 94.
68
.aav. r iva.ett 1818, 1 B & Ald 681: evtborv r ra.er |1892| 2 (h 2 at 33: rvver r Moore |1904| 1 (h 305 telegram. now
replaced or inland purposes bv telemessage,.
|virer.ity ot avvorer Cevtre tor .pptiea ivgvi.tic. ava peciat avgvage. Ca.e. c Materiat.: vgti.b tor ar
31
know this until it is too late to make a urther communication. \here instantaneous` means o
communications. such as the telephone. telex. ax or L-mail. are used the rule will not applv i the ailure
in communication is such that the oeree knows o it in time to retriee the situation e.g. i a telephone
goes dead in the course o negotiations,:
69
but it should applv where he has no such knowledge or means
o knowledge e.g. i a axed acceptance reaches the oeror in a partlv illegible orm,.
1he rule with respect to posted acceptances is subject to a number o commonsense limitations. In the
irst place. it must be reasonable in all the circumstances to use the post.
0
Obiouslv it would not be
reasonable to replv bv second class mail to a telexed oer. or to send an acceptance bv post on the ee o
a postal strike. Secondlv. the general rule presupposes that the letter o acceptance is properlv addressed
and stamped. I this is not the case. anv loss due to resulting delav should all on the partv who is
responsible or the deect in the communication. 1his will normallv be the oeree: but it mav be the
oeror: or example. where he sends out an oer in which he ails to gie his own correct or complete
address. linallv. the general rule can be excluded bv the terms o the oer. which mav require the
acceptance to be actuallv communicated to the oeror. or at least to be deliered at his address.
1
\here the general rule does applv. it leads to a number o practical consequences. 1he irst. and bv ar the
most important. is to curtail the oeror`s power to withdraw his oer. 1he posting o an acceptance
concludes the contract een though. ater the acceptance has been posted but beore it has reached the
oeror. he communicates a withdrawal o the oer to the oeree: and een though. beore the acceptance
was posted. the oeror had posted a withdrawal which had not vet reached the oeree when the latter
posted the acceptance.
2
1he second consequence o the rule is to put the risk o accidents in the post on
the oeror: thus there is a good contract although the acceptance is delaved in the post:
3
and the same is
true een i it is lost in the post. so that it neer reaches the oeror at all.
4
1his is perhaps the case in
which the posted acceptance` rule can cause the greatest hardship to the oeror: but to hold that there
was no contract could cause equal hardship to the oeree. i he had acted in reliance on his posted
acceptance. 1hirdlv. the contract is taken to hae been made at the time o posting:
5
this mav be
important in order to determine the prioritv o two or more competing claimants each o whom has made
a contract aecting the same subject-matter.
It should not be supposed that the posted acceptance` rule necessarilv applies in all situations to which it
could logicallv be applied. 1he rule will not be applied where it would lead to maniest inconenience and
absurditv`:
6
in each new situation the question must be asked whether the rule produces. on balance. a
69
vtore. ta r Mite. ar a.t Corpv |1955| 2 OB 32: riv/ibov ta r tabag tabt vva tabtrarevbavaet.ge.ett.cbatt vb |1983| 2 A(
34.
0
evtborv r ra.er |1892| 2 (h 2.
1
otrett ecvritie. ta r vgbe. |194| 1 All LR 161.
2
yrve c Co r eov 1av )ievborev 1880, 5 (PD 344.
3
Dvvtop r iggiv. 1848, 1 lL (as 381.
4
ov.ebota ire ava Carriage .cciaevt v.vravce r Cravt 189, 4 Lx D 216.
5
Potter r avaer. 1846, 6 lare 1.
6
otrett ecvritie. ta r vgbe. |194| 1 All LR 161 at 166.
^it. oppe
32
conenient result.
1his is the test which should be applied to the diicult question whether a posted
acceptance can be reoked bv the oeree. i he manages actuallv to communicate the reocation to the
oeror beore the latter has receied the acceptance. One iew is that the oeree should be allowed to do
this. since the oeror cannot hae acted in reliance on an acceptance o which he is as vet unaware.
Another iew is that. just as the posting o the acceptance curtails the oeror`s power to withdraw the
oer. so it should curtail the oeree`s power to reoke his acceptance. lor. i it did not hae this eect. an
oeree could. on a luctuating market. post an acceptance and relv on it i the market moed in his aour:
while he could reoke it later on the same dav. i the market moed against him. Although the rule o
conenience exists to protect the oeree. it does not seem that he should be allowed to exploit it in this
wav.
1he Vienna (onention on (ontracts or the International Sale o Goods which has not vet been ratiied
bv the United Kingdom,. goerns not onlv the rights and duties o the parties to. but also the ormation
o. such contracts. Under the (onention an oer takes eect when it reaches` the oeree
8
and an
acceptance when it reaches` the oeror.
9
i.e. in both cases, when it is communicated to the addressee or
deliered to his address.
80
1hus there is no contract i the acceptance is lost in the post: but i the
acceptance is delaved in transmission. it is eectie. unless the oeror inorms the oeree promptlv on its
receipt that he regards the oer as haing lapsed.
81
Once an oer has become eectie. it cannot be
reoked ater the oeree had dispatched his acceptance:
82
this preseres the Lnglish position that a posted
acceptance preails oer a preiouslv posted withdrawal reerred to in the (onention as a reocation,.
An acceptance mav be withdrawn bv a communication which reaches the oeror beore or at the same
time as, the acceptance would hae become eectie
83
i there had been no such withdrawal.
3.2.5 Method of Acceptance Prescribed by Offer
An oer mav in his oer expresslv require the acceptance to be made in a certain wav. e.g. bv letter or
telex. Priva tacie. the oeree can then accept onlv in that wav. as the oeror has made the requirement or
his own protection: an attempt to accept it in some other wav amounts at most to a counter-oer.
84
1o
this rule there are. howeer. two exceptions. lirst. an acceptance made in a dierent manner mav be
eectie. i the manner actuallv adopted is no less eicacious rom the oeror`s point o iew: i.e. i it is in
eerv wav as quick and reliable as the prescribed method. Secondlv. allowance must be made or the act
that an oer is oten made on a orm supplied bv the oeree: or example where land is to be sold bv
tender and the seller requires tenders i.e. oers, to be made on printed orms issued bv him. lere the