Is precisely how such realist judges will want to decide anyway.

Finally, because realists have a passion for results rather than rules, they will

tend to take a broad view of appeal court jurisdiction. For realists, the point of

an appeal is not to test out whether the trial court applied the right rules, but

primarily to assess the result handed down. Accordingly, appeal courts should

feel free to overturn trial court rulings where they are judged to have arrived at

the wrong result. Similarly, where the rule-book is in obvious and urgent need

of reform, realists do not see the sense of simply exhorting the legislature to

come to their rescue. If the legislature duly reforms the law, all well and good,

but, in the meantime, realist judges will think that they have a responsibility to

get on with the reforming work themselves: (‘There is a bill now before

Parliament which gives effect to the test of reasonableness (that is, the bill

which led to UCTA). This is a gratifying piece of law reform: but I do not think

we need wait for that bill to be passed into law. You never know what may

happen to a bill. Meanwhile the common law has its own principles ready to

hand’ (per Lord Denning MR in Levison v Patent Steam Carpet Cleaning Co Ltd

1978).)

7

Chapter 1: Sourcebook on Contract Law

Not only do realist judges put results before rules, they put pragmatism ahead

of conceptual purity.14

Thirdly, there are judges who will approach a case from a marketindividualist

angle. On the one hand, they take the view that the market is

there to facilitate exchange – it is the law which must serve business, not vice

versa. Competitive exchange must be encouraged as far as possible and

promises must be kept. In many respects, this view is very much in line with

the ideologies underlying the classical model of contractual relations. Of

paramount importance in this regard is the matter of certainty and

predictability. At all costs, businessmen and their lawyers need to know

where they stand so far as the law is concerned, with the result that the

market-individualist judge will frown on new developments which leave the

parties to a contract guessing as to what the end result will be.

The individualist approach also tends to militate against interventionism.

The market, as far as possible, should be left to regulate itself. Adams and

Brownsword offer the following distinction:

(a) The Market Ideology

According to market-individualism, the marketplace is a site for competitive

exchange. The function of contract is not simply to facilitate exchange, it is to

facilitate competitive exchange. Contract establishes the ground rules within

which competitive commerce can be conducted. Thus, subject to fraud,

mistake, coercion and the like, bargains made in the market must be kept. In

many ways, the line drawn between (actionable) misrepresentation and mere

non-disclosure epitomises this view. There are minimal restraints on

contractors: the law of the market is not the law of the jungle, and this rules out

misrepresentations. However, non-disclosure of some informational advantage

is simply prudent bargaining – contractors are involved in a competitive

situation and cannot be expected to disclose their hands or otherwise negotiate

in good faith (see Lord Ackner’s remarks in Walford v Miles). In line with these

assumptions, market-individualists attach importance to the following

considerations.

First, the security of transactions is to be promoted. This means that where a

party, having entered the market, reasonably assumes that he has concluded a

bargain, then the courts will defend that assumption. The courts’ acceptance of

an objective approach to contractual intention, their caution with respect to

subjective mistake, and their vigorous defence of third party purchasers (see

the mistake of identity cases) reflect the concern for security of contract.

Ideally, of course, security of transactions means that a party gets the

performance he has bargained for, but, as the market reveals an increasing

number of transactions where performance is delayed, the opportunities for

non-performance increase. To protect the innocent party, contract espouses the

expectation measure of damages (it is the next best thing to actual

performance) and, in the principle of sanctity of contract (which we will

14 Adams and Brownsword, 2000, pp 170–72.

8

What is Contract Law All About?

consider under the individualistic side), it takes a hard line against excuses for

non-performance.

Secondly, it is important for those who enter into the market to know where

they stand. This means that the ground rules of contract should be clear.

Hence, the restrictions on contracting must not only be minimal (in line with

the competitive nature of the market), but also must be clearly defined (in line

with the market demand for predictability, calculability, etc). The postal

acceptance rule is a model for the market-individualist: clear, simple and not

hedged around with qualifications which leave contractors constantly unsure

of their position. Similarly, the traditional classification approach to

withdrawal encapsulates all the virtues of certainty, which are dear to the

market-individualist. Conversely, the uncertainty inherent in the consequential

approach weakens its appeal to market-individualists, even though they may

be unavoidably drawn to it where particular terms cannot be dealt with under

the classification test.

Thirdly, since contract is concerned essentially with the facilitation of market

operations, the law should accommodate commercial practice, rather than the

other way round. Therefore, market-individualists sound the alarm bells as

soon as the rules of contract fall out of line with and impede commercial

practice. The majority judgment of the Privy Council in The Eurymedon is an

outstanding example of market-individualist re-alignment of the law; and

Williams v Roffey and Hillas v Arcos testify to an evolving market-individualist

recognition that technical formation requirements should be relaxed to

facilitate agreed adjustments to commercial contracts. In the same way,

deference to commercial practice accounts for the relatively smooth acceptance

of incorporation of terms by reasonable notice, and stamps the

pronouncements of the House of Lords in Photo Production as thoroughly

market-individualist.

Finally, we should notice the import of the commonplace that many of the

rules concerning formation (for example, the rules determining whether a

display of goods is an offer or an invitation to treat) simply hinge on

convenience. This may well be a statement of the obvious, but the obvious

should never be neglected. Contract is concerned to avoid market