Edwin Peel - Treitel on The Law of Contract

Fourteenth Edition

EDWIN PEEL, B.C.L., M.A.

Professor of Law
Clarendon Harris Fellow in Law, Keble College, Oxford
Barrister, One Essex Court

First Edition 1962
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2015 G.H. Treitel

In the four years since the last edition the more significant changes in the law have been the result of legislation rather than decisions of the courts. The most significant of such developments have been the amendments made to the Consumer Protection from Unfair Trading Regulations 2008 and the passing of the Consumer Insurance (Disclosure and Representations) Act 2012, the Insurance Act 2015 and the Consumer Rights Act 2015.

At the time of writing, neither of the two Acts of 2015 are yet in force. Most of the changes to the law introduced by the Insurance Act 2015 will come into force on 12 August 2016 and affect the duties of disclosure and liability for misrepresentation of insureds. They are therefore anticipated in various parts of Ch.9, which also includes the changes already made by the 2012 Act.

The timing of the Consumer Rights Act 2015 created a particular dilemma. It only received royal assent a few weeks before this edition had to be submitted for publication and it is understood that it will come into force in October 2015. However, for several years at least, and certainly for the duration of this edition, the courts are more likely to be required to consider contracts which were entered into under the law as it currently stands. Given the extensive changes introduced by the 2015 Act, in terms of where the law is to be found if not always in terms of substance, it is covered by way of a separate chapter which can be consulted if the 2015 Act is applicable. In other chapters, most notably Ch.7, the current law is stated but the reader is alerted, where appropriate, to the changes that will be introduced by the 2015 Act; so, for example, Ch.7 still covers the Unfair Terms in Consumer Contracts Regulations 1999, but they will be revoked and replaced by provisions in Part 2 of the Consumer Rights Act 2015. Once the date upon which the 2015 Act is in force is known, it is hoped that, by reference to the date when the contract in hand has been entered, it will be possible for the reader to locate the applicable law.

The amendments made to the Consumer Protection from Unfair Trading Regulations 2008 have resulted in civil remedies for consumers who have been the victims of certain prohibited practices, including misleading action and aggressive practice. These changes are reflected in Chs 9 and 10.

If the more significant developments have taken place in Parliament, this is not to say that the courts have been quiet. In the last edition, Ch.6 took into account the decision of the Court of Appeal on the limits of purposive interpretation in Rainy Sky SA v Kookmin Bank and it now assesses the reversal of that decision by the Supreme Court. It must be a source of some regret that the defence of illegality should have been considered by the Supreme Court on three occasions (Allen v Hounga; Les Laboratoires Servier v Apotex Inc;and Jetivia SA v Bilta (UK) Ltd) and yet it still was observed by Lord Neuberger, on the last of these occasions, that the proper approach to the defence of illegality needs to be addressed by this court (certainly with a panel of seven and conceivably with a panel of nine Justices) as soon as appropriately possible. The continued uncertainty in this notoriously knotty territory (Sir Robin Jacob in ParkingEye Ltd v Somerfield Stores Ltd) is reflected in Ch.11. In Geys v Socit Gnrale a majority of the Supreme Court endorsed the view long held in this book that a contract, including a contract of employment, is not automatically terminated by a repudiatory breach (see Ch.18) and in Benedetti v Sawiris the Court provided welcome clarification on the valuation of services provided pursuant to a failed contract (see Ch.22).

In the Court of Appeal, the decisions in Makdessi v Cavendish Square Holdings BV and ParkingEye Ltd v Beavis have invigorated the debate about the scope of the rule against penalties, as has the decision of the High Court of Australia in Andrews v ANZ Banking Group Ltd to return to its equitable origins and reject the limitation of its application to sanctions imposed only for a breach of contract by the payer. All three decisions are assessed in Ch.20 and the appeals to the Supreme Court in Makdessi and ParkingEye represent the more eagerly anticipated of the decisions which will need to be reflected in the next edition. Mention might also be made of the decision of the Court of Appeal in Daventry District Council v Daventry & District Housing Ltd. The observations of the Lords Justices in that most unusual of cases, along with those of many other judges, have called into question the suggested approach of Lord Hoffmann in Chartbrook v Persimmon Homes Ltd to claims for rectification on the basis of common mistake. This debate is considered in Ch.8.

At first instance, there have been several intriguing developments. Most notable among them is the decision of Leggatt J. in Yam Seng Pte Ltd v International Trade Corp Ltd to acknowledge the existence of a duty to perform a contract in good faith, based on the methodology of terms implied in fact. That has received something of a mixed reception, but it is a development which looks like it is here to stay and it is assessed in Chs 1 and 6. In part prompted by the decision in