ABSTRACT
The main subject matter of this chapter is the means by which the courts decide whether parties have reached an agree ment that is poten tially one which the courts will enforce. A related ques tion is that of why and how the law of contract becomes engaged in dealing with the parties’ trans ac tion. There are several poten tial reasons. First, it might be the case that the courts will simply be respond ing to the wishes of the parties. In other words, the law is acting in a facil it at ive way. The parties have inten tion ally formu lated their agree ment as a contract, and now wish to make use of the mech an ism of the courts to resolve a dispute. They can choose not to use the courts if they wish, and indeed many commer cial disputes are settled by altern at ive methods such as arbit ra tion or medi ation. Such methods may make refer ence to the law of contract as it is thought it would be applied by the courts, but essen tially the parties have in such a situ ation decided to take their dispute out of the formal legal process. Thus, the decision to engage with the law of contract is in
Another reason for the courts’ involve ment may, however, be where there is a dispute as to whether there is a contract at all. This might be because one of the parties disputes the fact of agree ment, or wishes to argue that although there is an agree ment, it is unen force able. If the courts become involved, and again there is an element of choice in that one party must initi ate an action by issuing a claim form, it will be against the wishes of one of the parties. That party will be arguing that there is no contract, and that there fore the courts should not be involved at all. In this situ ation, the court is not acting in a purely facil it at ive way, but is saying to one of the parties that although it thought that it was not enter ing into a binding contract, in fact it was, and there fore it is obliged to submit to the juris dic tion of the court. The extent to which parties can delib er ately exclude an agree ment from the juris dic tion of the court is considered further in Chapter 4, in connec tion with the require ment of ‘inten tion to create legal rela tions’.
