The Importance Of Contract Law

The term ‘freedom of contract’ is defined as: ‘axiomatic within the classical view that free dealing is fair dealing’ by Lord Devlin. The doctrine provides liberty to anyone who wishes to enter a contract, granted they hold the legal capacity to do so. However, the doctrine is largely criticised for the inequality which it may encourage, since not all parties involved hold the same level of power when entering a contract, leading to the possible infliction of damage upon the disadvantaged party. This is more commonly referred to as the inequality of bargaining power, which is the principle discussed in Lloyds Bank Ltd v Bundy. The transition from the nineteenth century into the late twentieth and early twenty-first century has seen a change

There are evidential restrictions in place to reinforce equity between the parties, one of which is ensuring the consumers hold the required legal capacity to enter. The Minors Contract Act prohibits individuals under the age of eighteen to form a consuming party. Such restriction is to inhibit the possible oppression of the minor, as a result of differing intellectual power. Similarly, the law does not allow mentally unstable individuals to enter a contract as they may lack the reasonable intelligence, making them vulnerable to an unfair bargain. Where the element of mental incapacity is known to the other party, the contract can be set aside. This was reiterated in the case of Hart v O’Connor where an unfair bargain had been agreed with a party that fell short of the required mental capacity therefore, the trial judge held that although the element of insanity was unknown, that coupled with the inequality of bargaining power amounted to unfairness in the agreement hence, the contract was unenforceable. This case manifests the existing intervention of the law, regardless of the doctrine of freedom of contract, which aims to protect consumers of special