INTRODUCTION TO THE CONTRACT AND ITS UTILITY IN OUR ROUTINE LIFE HISTORICAL AND CHANGING NATURE OF CONTRACTUAL OBLIGATION.

By:
MUHAMMAD SAQIB HAMEED
Advocate High Court
LL.M (PULC)

1. How we can define Contract?

A contract is basically the nexus of promises, wherein an agreement is setup, each party acknowledging the promise made by other party, in response to his promise being acknowledged by the other party.[1] When more than one person set up certain interpersonal rights and obligations against or towards each other through a settlement between or amongst them, then it can be said that such persons have entered into a contract between them. While law has the affinity to recognize and enforce such rights and obligations arising under the said settlement.[2] In more easy words a contract is an instrument whereby the interests of the persons to the contract are protected.[3] 2(d), S.1 of The American Restatement of the Law of Contract states that a contract is a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.[4] A contract is considered to be a piece of document, wherein the distinct, divergent and variant interests of parties are carved or settled in such a way, which makes it possible not only to reconcile such interests but also setup certain gains which are to be achieved by the parties severely or collectively. [5]

When we come across the general law of contract, as implemented in Pakistan, then it provides that an agreement enforceable by law is a contract.[6]

While in order to ascertain, what is an agreement? It is argued that an agreement is said to be a promise or set thereof, forming the consideration of each other. While there are three basic essential of law of contract naming offer, acceptance and consideration.[7]

2. What is the Utility of Contract:-

These above definitions predict about the function of contract in a very good way. Every human being enters into contract on each day of his life, as contract of carriage, contract of sale, contract of hire etc., but we are not aware of the fact about many of contractual transactions in our life. There are basically the simple consumer contracts of our life, which do not deploy the true picture as to the purposes of contract. In this regard we must have to glance over the commercial transactions, whereby we may better understand the utility of contract in particular. While any transaction where consideration is not to be paid immediately, but at some future time, is considered a commercial transaction.

(a) Anticipation and Compensation:-

Whenever a contract is made, it shall be made to overcome two basic ideas as what parties have undertaken, is fully anticipated and if it is not then defaulting party shall compensate the aggrieved. Mean to say a contract is drafted as to ensure the performance of a certain act, and on non-performance of the act, the aggrieved shall be recompensed.[8]

(b) Creation of Relationship:--

Whenever a contract is made then it shall set up certain relations between the participants. Where each of the participants shall be bound to perform his duty, without the intervention of law. While on non-performance of the promise, the promisee shall have the resort to enforce the legal sanctions against the promisor. [9]

(c) Future Planning:--

Basically a contract is made to overcome the future exigencies relating to a certain transaction. Whereby the participants shall be more able to set a path, which is to be opted for the resolution or performance of the transaction.[10] We may assume that this concept of future planning has some wider scope, which shall cover not only the cost of promise, extent of liability upon the parties, allocation of economic risk, but also the remedies available to the participants against non-performance etc. of the contract.[11]

(d) Cost of Promise:

That basic purpose of the contract is also to determine the value of each promise made during the formation of the contract. Moreover the contract is a mean to make an estimate as what the contracting parties shall receive and loose inter see.[12] For example when 'A' promises to transfer the title and possession of his Car to 'B', and 'B' promises to pay Rs. 100000/- to 'A' at a time specified, then
Rs. 100000/- is the cost of promise made by 'A', while in exchange transfer of Car to 'B' is the cost of the promise of 'B'.

(e) Extent of Liability upon the Parties:

Contract sets up the respective liabilities of the contracting parties. As the rights of one party may be the liability of the other party. So we may also assume that contract sets up both the liabilities and rights of the respective parties. It shall also determine the standard and quality of performance in relation to their obligations towards other contracting party.[13] As for example, 'A' a doctor agrees to operate the body of 'B' against a sum of Rs. 10000/- to be paid by 'B' to 'A', then the contract shall also determine the standard of care and caution, standard of surgical equipment and quality of medications to be used during operation by the doctor. While it is also a standard of performance on the other party to make payment of Rs. 10000/-, on the day fixed under the contract.

(f) Allocation of Economic Risk:

In all the commercial contracts, basically there is evolving the science of economics. As the monies or valuable services/goods of individuals are involved in the contractual transaction. A contract very easily shall determine the monitory and fiscal risks associated with the transaction, between the parties to the contract.[14] For example if 'A' agrees to build a house for 'B'. While the rate of construction is fixed as Rs. 200000/-. 'B' makes payment to 'A', and construction of house is started. Suddenly the prices of building material get rise and estimate of construction exceeds more than the fixed price of construction, as Rs. 250000/-. Now question arises, how the situation shall be faced? The contract shall provide certain provisions in this regard to face the situation. As the contingent economic risk is allocated to any one or all of the contracting parties to the contract.

(g) Remedies against non-performance:

As early said that contract enshrines certain contractual liabilities and rights upon the contracting parties. Besides these, it shall also set up remedies for breach of contract, as if any contracting party fails to comply with its obligations, or violates the contracting rights of the other party, then the defaulting party shall be made liable to the aggrieved party, either by paying damages to the aggrieved, or the aggrieved is given the option/right to terminate the contract, while his right to claim damages shall remain intact.[15]

3. Introduction to the Law of Contract:

Basically the law of contract finds its roots from the eve of mankind. While every legal system considers it fundamental to make certain arraignments, whereby the rights of parties arising under the contract may be enforced.[16] Law of contract flourished more through the principles of common law rather legislature has paid a very little contribution towards its development. Moreover treaties over the general principals of law of contract have made considerable contribution towards the introduction and development of the law of contract.[17]

Contract law is deeply associated with the fields of commerce and economics, as it was developed during the industrial revolution in England. Where strong markets of money, commodity and products were set up as result of which people started to engage into formal types of contracts. Such engagements into formal types of contracts still today, made the operation of law of contract much successful and also caused the commercial developments. In nut shall we may assume that law of contract set up the state of affairs in which an undertaking shall be mandatory upon parties concluding it.[18]

While a student of law when depicts the situation that what should be the scenario if there would be no formal law of contract in the crude and purified form as we see today, then it suggests us to be a matter of further debate. In our daily life we undergo a number of contracts ranging from purchase of newspaper, milk and the travelling tickets. We do all these activities simply, but what is the controversy behind these apparent simplicities of life? For this we should go through a number of sciences for the formation of these daily life contracts. In our daily life we are too busy with contracts that these have become the integral part of our life. Contracts are formulated in different ways as depending upon the monetary value or the duration etc. In this regard the contents and nature of contract may vary from contract to contract. There are many types of statutory contracts as contract of marriage, contract of carriage, contract of sale of goods and contract of employment etc., for which certain provisions have been enacted. Keeping in mind all the above arguments we may assume that though there are numerous contracts, so it is not the law of contract but the law of contracts. But for our discussion as we do not concern with the contents all these types of contracts, our focus is to determine the general principles relating to the law of contract.[19]

4. Basis of Development of the Law of Contract:--

Historians of the law of contract are confused as to conclude the basis of the law of contract, because it is controversial to determine the theories or factors of the basis of law of contract. P.S. Atiyah has rightly stated that modern law of contract deals with great number of circumstances yet its ideology is controversial.[20] One may not oppose that besides the basic theories of law of contract, there were number of factors, which played a vital role to the development of the law of contract, and these factors are still influencing the further development of the law of contract. For further discussion we may divide these factors into basic two slots namely:[21]

(a) Social/Moral Factor:

Although it is the foremost conception in our mind that law and morality are distinct to each other, yet the law represents the moral and social standards of the society, where it is made applicable. While the bird's eye view of the theme of the English law of contract shall suggest us, that it is based upon a moral principle that a promise made by a person is above board and it ought to be fulfilled and one must have to abide by the agreement made by him.[22] Basically the whole theme of the law of contract is based upon two moral principles as:[23]

• One ought to stick to his words and abide by his agreement.

• One should not take any undue advantage or benefit from the other under the contract. Where one party is under come economic or social pressure.

(b) Economic/Business Factor:

With the passage of time, the modern society achieved prosperity and this caused the economic development in the society, which brought more and more economic transactions among the members of the society. This was the moment when a law of contract was desired. Further this economic development provided two following issues, which accorded for the need of a pure law of contract for the society.[24]

(c) Establishment of Financial Institutions:

As Roscoe Pound has emphasized that in this industrial age, wealth in the hand of members of society has given rise to a large number of promises. Industrial revolution has brought economic development in the society, which caused the establishment of the financial institutions. Where the people deposited and borrow monies.[25]

(d) Classification of the Society:

With the industrial revolution in England, the society was divided into number of classes as i-e. Labour Class, Principal/Industrialist Class. Where industrialists in order to run their industry and compete the market, employ certain skilled workers. In this regard they enter into the contract of employment etc. Besides there was also certain transactions of transfer of property. Where it was considered necessary that there must be a special code of the law of contract, which may frame the structure of such contracts.[26]

5. Changing Nature of Contractual Obligation:[27]

Today the modern concepts of law of contract can only be understood if we go through the history of these concepts. If we aim to write a digest on the modem principles of law of contract, then we shall necessarily refer the gradual development of this modern law of contract, which was never imagined so. While probing the basis of modern law of contract we shall glance upon the thinking of lawyers, who contributed for setting up the principles of law of contract. Besides we shall also try to know how an action becomes enforceable? And which of the private rights we considered to be contractual rights? The changing nature of contractual obligations can be illustrated under the following heads, but it must be kept in mind that there are certain issues that still create confusion.

In early days many of the matters were resolved according to the nature of the transaction but not upon the nature of agreement. In order to seek reparation, the aggrieved may invoke a specified type of writ covering his matter of litigation. But if there is no formal writ covering his matter, then he shall go without getting redress.

(a) The Medieval or Early Actions:

After the Norman War, the Majestic judges were not only deputed to maintain the peace in the country but also to set up a system wherein the ownership of land can be preserved with reference to the enforcement of private agreements relating to the sale of land. The last decade of thirteenth century revealed two types of actions for regarding the enforcement of certain rights, which are today called as the contractual in nature. These actions are termed as the action of Detinue, Debt and Covenant.[28]

(b) What is Writ of Detinue?

In early days of the thirteenth century, where a right is arisen under an informal contract, for the recovery of some valuable thing, then the claimant had no option to redeem or recover the said thing, but he may invoke the writ of detinue. Wherein claimant may take plea that his valuable thing is in illegal detention of the other contracting party. Which should be got released from the illegal custody of the other party.[29] In this action the claimant must also have the title to the property unjustly detained by the defendant.

For example, if A had lent his 'mule' to B, and B is not returning said 'mule' to A, then A may invoke the Writ of Detinue, in order to take the possession/recovery of said 'mule' from the illegal custody of B.[30]

(c) The Debt:

The concept of action of debt can be traced from the primitive legal ideas. In its nature as remedy, it has more the recuperatory characteristics than that of contract. Basically the action of debt was a composite of writ of debt detinue, and can be brought through the writ of Debt Detinue. In the early fourteenth century this action of debt can be invoked for the recovery of money, whereas the action of detinue was for the regaining of certain personal property. As money was considered to be the personal property of the claimant.[31] Where a promise is made under seal for the payment of a certain sum of money, then writ of debt was the proper remedy. Some historians regard that it was immaterial to consider the transaction or circumstances, in which the money became due upon the defaulting party. All monies to be recovered under the rent, lease or mortgage agreement or under debt agreement, can be recovered under this action.[32]

• Scope of the Action of Debt:

As we know that action of debt can be invoked only when one person has illegally detained the money really belonging to other person/s. Now question arises as to the transaction, giving rise to the claim of money. Whether it is arising from repayment of loan or recovery of price of sold goods or monies under tenancy agreements or some customary dues, either arising under some law or under a judgment? This scenario depicts that a verity of claims for money can be invoked through the action of debt. The legal practitioners had rightly convened these assertions into following three different modules, where the action for debt shall state in its caption, the nature of debt.[33]

i. Debt on an Obligation:

Here the action of debt was to be invoked against the non-performance of an obligation, arising out of a sealed agreement or under the law.

ii. Debt on the Record:

In this action of debt, the recovery relates to monies due under an order of Court of decree issued by the Court. While the same must be brought on the record of the Court. This shall also include the costs or fines imposed by the parties under the order of the Court.

iii. Debt under Contract:

Debt under a contract was meant, to say that monies arising under some contract. While this contract has vast scope, as it includes not only the debt of contract but also the contracts of sale of goods, the rent agreements and others of similar kinds. While the debt shall become due against the defendant only when the plaintiff has performed his part of agreement. Or the defendant shall become liable only when he has received some benefits against a transaction from the plaintiff. Which is known as Quid pro Quo.

• Procedure under the Actions of Debt:

The Actions of Debt were not much effective in the sense, that in order to prove or establish the debt under this writ, the parties were given opportunity to prove their position on oath. Besides the parties may present twelve persons to support their oath or position. On the other hand under an action of debt, the plaintiff may maintain his claim to a certain sum of money.[34]

(d) What is Writ of Covenant?

During the start of thirteenth century, the advent of Writ of Covenant was a new development in the law of contract. The writ of covenant, was eminent to redress for damages claimed for breach of any sealed written covenant. Where 'A' covenants, under sealed deed, with 'B' to do or to abstain from doing a certain act, but defaults such sealed covenant, then the writ of covenant may be invoked by the aggrieved party for the compensation of damages. A promise between the parties to do or to abstain from doing certain act was considered to a sacred deed of the parties. This remedy was availed not because of some transaction, but because there is a sealed deed of covenant.[35] While the history depicts that this writ did not played any vital role in the progress of the law of contract.[36]

(e) Writ of Account:

This writ, was of limited scope and has contributed a little, but we may say that it has paid nothing to the law of contract. Basically it was invented to call upon one, who had been paid some money on behalf of the other persons.[37]

(f) Writ of Trespass:--[38]

In order to meet the situation of injury to person or property, there was no form of action whereby aggrieved may get redress. The Government in order to handle these situations, brought about the new legislation, named as Statute of West Minister, II (1285, 13 Edw.1 c.24), whereby new writs like writ of trespass were introduced. Originally the action of trespass being a subject of tort was to lie against any direct injury caused by slight force, to any person or property by some other person causing breach of royal peace but later on this remedy was available to person suffering from private wrongs under informal agreements. So the Courts recognized three types of actions under trespass as:

(i) Writ of Trespass to Person:--

Writ or trespass to person means, an action for damages, where one person gets physical injury due to the direct force used by the other person.

(ii) Writ of Trespass to Property.

Writ or trespass to property means, an action for damages, where the property of one person gets physical injury due to the direct force used by the other person. Here the property so injured must be in possession of the claimant, at the time of injury.

(iii) Writ of Trespass on Case.

In order to understand, the trespass over the case, we shall have to understand an example first. If 'A' throws garbage over the road, and 'B' falls over it and gets certain injury. But in order to seek writ of trespass to person or property aggrieved must have to show that he got injury due to direct force of the other person. In this situations the Courts recognized a new concept of Action of trespass on the case.[39] Where 'A' gets the pen of 'B', and uses the pen so negligently to cause damage to it. Here the case of Trespass to person shall never lie, but trespass over the case shall lie. Later on this action was used against the performance of a certain act, ought to be performed in a particular way. But not performed so, causing injury to person or property of the other party. Where liability may arise in two different ways, firstly act was not performed properly because of the negligence of the other party. While on the other hand defendant is being litigated due to his act of omission, which he had undertaken to do.

(g) Action of Assumpist:--

In the fifteenth century, the need for enforcement of ordinary informal agreements of parties was urged. Whereby technical rules of litigation may be abridged. This type of remedy was invented with the cohabitation of two distinct types of actions namely the trespass on case and deceit on case.[40] Although these actions did not prima facie provide the action of Assumpist, yet we have no other choice to trace the origin of Assumpist. As we have discussed the writ of trespass on the case. When this action of trespass on case is sought on the basis of an undertaking to do or to abstain from doing certain acts, then this writ of trespass shall be called as Action of Assumpist. In this regard the petitioner was required to mention in the caption of writ as 'Assumpist Super Se'.[41] While action of deceit is to be leveled against the acts of persons involving con or intentional ill will. While this form action gets its roots in 1442, when in a leading case the act of deception became the basis of assumpist. In Doige's case[42], the brief facts of the case show that plaintiff purchased a plot from defendant. Where defendant promised to deliver or hand over the possession of the same within fourteen days, but he gave the possession of another plot to the plaintiff, and caused the act of deception. Defendant agitated the jurisdiction on the ground that proper form of action in this case is covenant, While Court of Exchequer Chamber rejected such plea of defendant and allowed plaintiff’s case, while introducing this new form of action. While this act of deceit further contributed to the origin and development of action of Assumpist.[43]

6. Development of Competing Theories:--

(i) The Will Theory:--

The foremost doctrine for the basis of law of contract is the will theory, which states that rights and liabilities under a contract arises on the will of the parties to the contract. Law of contract is nothing but a set of rules and regulations that empowers the individuals to draw a private law over a particular matter according to their choice and freedom. As there should be no restraint over the will of the individuals.[44] In a contract two wills of parties are tied in such a way as it shall become one unanimous will of all the parties to the contract, showing the true consensus of parties.[45] Similar to Lazziz Fair Theory, the will theory was considered by the Courts to mean that the right to make contracts is the inalienable right of every individual, but the law may impose certain interference over the individual's right to make contracts.[46] Subject to criticism, Professor Fried (1981), has rightly concluded that will theory evolves around the promise principal, which depicts the true imago of liberty of individuals to draft their contracts according to their wills.[47] Sir George Jessel, has commented in Printing & Numerical Registering Co. V. Sampson, that subject to rules of common law relating to contracts, when a contract is entered freely and according to the will of parties then it is to be considered to be a sacred document, which is to be enforced in Court of justice.[48] According to this theory, the Courts are entrusted with the exclusive jurisdiction to determine, whether the parties had free will of what they have agreed, except in cases of certain vitiating factors.[49]

(ii) Recognition of Freedom of Contract:--

With the eve of the law of contract, a new theory known as the freedom of contract gave rise to the concept that parties are at liberty to draw their own private law. As recently Lord Diplock states "It is the basic rule of the law of contract, which considers that parties are free to determine for themselves what the primary obligations they shall accept".[50]

In the nineteenth century the judges developed the classical theory of freedom of contract with two leading concepts as:

Firstly, the contracts are based upon the mutual agreement of parties. This means that reciprocal nod of the parties is justified for the creation of a contract. This idea also provides that the contract/agreement is to be tested through the objective approach of the parties and not upon the subjective approach. Mutual agreement of the parties need not to prove, what they actually had in their mind but the agreement shall refrain itself to the contents, which set up the contract.[51] Secondly, the contract is the outcome of the free choice of the contracting parties. Free choice directly means to state that parties are free to make their contract subject to economic and social restraints. In the early days the Courts recognized it just to state its narrow scope and doctrine has also certain flaws in it, but with modern social and economic changes the concept of freedom of choice was presenting a very different concept While freedom of choice is to be categorized into the following three aspects namely:[52]

(a) Freedom as to Choice of Person.

A man is said to be free enter into agreement, when he has choice to enter into the contract, with any other person, whom he wants to make the contract. A person is never bound to perform/enter into the contract, when the same is not done with his freedom. But this rule has certain exceptions as in this modern age a person is under legal obligation to enter into contract with a person, where he has no other alternate, i.e. we have no option to enter into contract of supply of electricity at our house, with anyone else but with Faisalabad Electric Supply Company, Similarly where one person is exercising the common calling as certain inn manager, bus driver, then we are under obligation to enter into the contract with that person. Besides there are certain other restraints to the rule as, the capacity of opposite party may restrict you to enter into the contract.[53]

(b) Freedom as to make any kind of contract:

Freedom of choice means that a person is free to make any sort of contract. But this concept in the modern age has certain limitations as:

• Bar of law:--

You cannot make the contracts which are barred by law. For example by the Gamin Act 1945, the wagering contracts were declared to be no longer capable of enforcement.

• Against Public Policy:--

You cannot make the contracts over the subjects which are contrary to the public policy.

(c) Freedom as to Choice of Contents of Contract:

Freedom of choice is also meant that a person is free as to choice of the contents of the contract. As one should be free to choose the terms of contract. But this concept is also restrained by certain grounds as:

• Legal Reasons:

As there are certain terms which are made compulsory by the law as to be adopted, when entering into a certain contract, i.e. duties of seller and buyer under the Sale of Goods Act. While law also provides that these terms can also be set aside with the consent of all the parties.

• Contrary to Public Policy:

While there are certain terms which cannot be adopted because these are contrary to the public policy. As in Pakistan a person cannot adopt in his contract the choice of law or choice of forum clauses, because these are contrary to the public policy.

(iii) Agreement Theory:--

The contract is always based upon the agreement of parties. Agreement consists of the set of promises. Where one party undertakes to fulfill his promise in consideration of the other person fulfilling his part of promise. While in modern circumstances this concept has a very restricted scope. It must also be kept in mind that agreement theory stipulates the general agreement over the whole of the contract, while it does not mean that parties must agree upon each and every term of the contract in this modern age of contracts.[54]

(iv) Theory of Bargaining Power:

Classical law of contract states that whenever a contract is concluded between the contracting parties then it is to be made between the parties having equal status and the contract is never concluded due to any sort of pressure, influence or other social or economic reason. In modern law of contract, this approach is applicable with a narrow scope. For example this concept is diminished, when one is entering into the standard form contract, where one has option either to enter into the contract or to leave the same. Similarly in an employment contract, the employee does not have the similar bargain power to that of the employer. This concept is based upon assumption and law recognizes that where a party enters into the contract, then he cannot retract from the provisions of the contract on the ground that he was not in a position to bargain equally with other party over the terms of the contract. As law considers that a contract is when entered into, it is made with the will, agreement and free choice of the parties. But in this modern age inequality of bargaining power is becoming to be a rule rather an exception.[55]

(v) Doctrine of Sanctity of Contract--

Where we discuss all the above theories, then we shall find a concluding story that subject to certain enclaves the Courts hold the contract to be a sacred instrument. The wisdom behind the rule is that the contract is the outcome of free will of the parties, where their intention and freedom have led them to enter into the contract.[56] Besides this basically law requires that the parties must stick to their deals. This rule is basically designed to diminish the draconian situations, whereof any one may leave his contract. In these rough and tumble circumstances, there are number of pressures and forces, which shall lead you to enter into harsh and laborious contract, yet it cannot be permitted to repudiate the commercial relationship on the ground that the terms of contract are hard and harsh or that you, being a person of full capacity, have not read the terms of contract or have not judged the construction or PROS and CONS of the contract. While in any contract, it is never required to make a statement to this effect that the contract is sacred document.[57]

(vi) Intention of the Parties:--

With the passage of time the jurists have developed the concept of the intention of the parties. This rule suggests that to make a binding contract, there must be the intention of parties to create legal relations. Before this, the Courts were of the view that they cannot judge the inner thoughts of a man, as what is going on in one's mind. In 1806, Evans suggests[58] that every contract derives its effect from the intention of Parties, that intention, as expressed or inferred must be the ground of every decision, respecting its operation and extent, and grand object of consideration in every question with regard to its construction.

Concept of intention to create legal relations is divided of various accounts and can be traced from the persuasive treaties of Pollock and Leake and a German Jurist Savigny.[59] While this doctrine got its significance in the decision of Carlill V Carbolic Smoke Ball Co[60] and later on further developments were made to this concept by the House of Lords in the decision of Heilbut, Symons & Co. V. Buckleton.[61]

Now the question arises, how the intention of the parties can be derived? In this regard Lord Redcliff argues that intention of parties does not matter but intention of the parties is to be determined according to the intention of a fair and reasonable man. As Court shall consider what a reasonable man would have intended in the situation when the contract had been concluded.[62]

(vii) Introduction of Consideration:--

In common law, the mere promise was nothing but it becomes cognizable, when in recompense of the same, the promisee also promises to do or to refrain from doing certain valuable act. Infect the valid and binding undertaking covers the element of reciprocity between the parties. Firstly the question arises that classical law of contract was to deal with the subjects of informal contracts, and which is the element, that caused these informal contracts actionable. Till the sixteenth century, the Courts in order to declare the action ability of the informal contract, caused the analysis of the matters case by case.[63] Secondly, it was to cover the actions of assumpist, which was based upon its tortious nature of action, for fissure of any duty.[64] It is difficult to compare the reasons for action under contract and action under tort. But Action of Assumpist was based not only upon the Nonfeasance but also upon misfeasance. For example A promises B to make a door for B, but does not do so. In order to succeed the action of assumpist, the plaintiff has to show that he has paid consideration for his promise, as in case of action of nonfeasance, the plaintiff shall show that he has paid money to 'A', as the consideration for his promise to make a door for plaintiff. While in the case of misfeasance, detriment to the plaintiff consists of damage caused to the plaintiff.[65] While in Strangbrough V. Warner, it firstly built-in the concept of mutual promises, as promise being the consideration of promise, to describe a new doctrine of consideration.[66] In other words consideration is the motive or reason, which is behind a promise, and which binds the promisor.[67] Later on various developments were made by Courts towards this new concept, besides recently Professor Atiyah and Trital have heavily deployed themselves with this doctrine, to consider the detriment and benefit elements of consideration, along with other reasons for the enforceability of the promise.[68]

(viii) Codification of Law of Contract:

As law of contract is a species of judge made law, which is by no means stagnant but certain amendments, modifications and adaptations have been adopted with the passage of time. But from the mid of nineteenth century considerable efforts were made in order to introduce a law of contract, where the rules are codified under a particular statute. In this regard firstly a master piece namely Indian Contract Act was enacted in 1872, for the colony of Indian Sub-continent. This enacted law was based upon the judge made English Law of contract.[69] Later on after independence, Government of Pakistan also adopted this Indian Contract Act, 1872, with certain modifications and adaptations by naming the Contract Act, 1872.

Conclusion:

A contract is a nexus of promises, wherein an agreement is setup, each party concedes the promise made by other party, in response to his promise being recognized by the opponent. A contract creates interpersonal rights and obligations between or amongst contracting parties. While law considers and enforces such rights and obligations arising under a settlement made by the contracting parties. Lastly a contract is a way out to protect the divorgont and variant interests of contracting parties. Every day each of us enters into a number of contractual transactions, as contract of carriage, contract of sale, contract of hire etc., but we are not aware of the fact about these contractual transactions. Apart from these simple consumer contracts, we find a number of contracts, which have certain commercial contracts. Here we are not concerned with the nature of contract rather the function of contract. Firstly it creates relationship between the contracting parties, where it ties the parties, in a way, whereby certain rights and liabilities are conferred upon all of the contracting parties. Secondly it provides a check upon the contracting parties, as what is anticipated in the contract, whether the contracting parties have tried to achieved that. If the projection of contract is not attained by one of the parties then it shall provide the aggrieved party the compensation for such non-performance. Thirdly contract is a way to resolve the future issues, whereby the contracting parties may choose a plan to resolute their future issues. Fourthly a contract may provide us the true picture as to the value of promises made by the contracting parties, it shall depict us what the contracting parties are losing and gaining from each other. Fifthly, contracts are closely related to the economic issues of parties, so it may allocate the economic risks between the parties. Lastly the contract shall provide us the remedies available to the contracting parties against the non-performance or breach of the contract or any part thereof. History of law of contract is as old as the man kind is old. In ever legal regime, certain arrangements are made to protect the rights and interests of its citizens. Law of contract all over the world was an outcome of various rules of Roman and Common Law System. To set up the rules of law of contract, legislature has not paid favorable attention. While considerable work had been done by the jurists. In England law of contract flourished during the industrial revolution. Law of contract has also contributed towards the social, commercial, economic and industrial development of society. Now we have general codified law of contract, but think about the scenario, when, there was no codification as to the rules of formation of contracts. In our routine life contracts have become the integral part of it. Modern law of contract, does not provide a definite picture as to its history, for this historians do not conclude over the common agenda regarding the history of law of contract. While it cannot be denied that basically these were the various theories regarding the rules of contract, which brought about for the setting up of modem law of contract. While these theories are also the outcome of various factors. In this regard it is argued that certain social, moral, financial, commercial and economic factors played a vital role for the creation of this modern law of contract. When we go through the story, then we shall find the changing nature of contractual action/obligation. In early days many of the matters were decided considering the facts of transaction rather the nature of agreement. To get redress, the aggrieved had the option to invoke a specified type of writ suitable to his matter of litigation. But where there was no formal writ regarding his matter, then aggrieved may not find any redress. While these actions/writs may range from writs of Detinue, Debt, Covenant, Account, Trespass and Action of Assumpist. Where the complainant had to show certain reasons to avail the remedy, according to the cause of action. Later on Common Law started to recognize number of competing theories, i.e. The Will Theory, Doctrine of Freedom of Contract, Agreement Theory, Doctrine of Consideration, Doctrine of Offer & Acceptance, Theory of Bargaining Power, Doctrine of Sanctity of Contract and Doctrine of Intention of Contract etc. While in nineteenth century certain endeavors were made to compile a codified law of contract, which provides uniform rules regarding the creation and other matters of contract/s. Infect there is wide role of lawyers and jurists to recognize this crude form of law of contract as we see today. If the law of contract was not compiled in a form of code, then there might be injustice with the contracting parties regarding the recognition of their

contractual rights and claims. This can be argued in a way that old law of contract may not compete with the present developments of transactions. While it cannot be said that modern law of contract is a bed of sage, but there are many thorny issues, which yet require attention of jurists, legislature, Courts and lawyers for further betterment, whereby certainty, clarity and precision might be attained.

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[1]. Chapter 1, Page. 2. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[2]. Chapter 1, Page No.3, Sutton & Shannon on Contracts 6th Edition by KW Wedder Burn, published by Butter Worth Co. (Publisher) Limited.

[3]. See Gurvitch, Sociology of Law (1947), as referred in Chapter 1, Page 3, of Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[4]. Chapter No. 1, Pg. 1. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[5]. Gurvitch, Sociology of Law (1947): As referred in Chapter No.1, Pg. 3. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[6]. Section 2(h), The Contract Act 1872.

[7]. Sec 2(e), The Contract Act 1872.

[8]. Chapter No.1, Pg. 2. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[9]. Macaulay (1963), 28 American Sociological Review 55.: As referred on Pg. 2. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[10]. Palgrave Macmillan Law Masters, Contract Law by Ewan Mckendrick, 9th Edition, Page.6.

[11]. Chapter No.1, Pg. 3. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[12]. Ibid.

[13]. Ibid.

[14]. Ibid.

[15]. Pages 438 and 511, Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[16]. Chapter 1, Page 1, An Introduction to the Law of Contract by P.S.Atiyah, edited by HLA Hart. Oxford at the Claredon Press1966.

[17]. Palgrave Macmillan Law Masters, Contract Law by Ewan Mckendrick, 9th Edition, Pg.1.

[18]. Chapter No.1, Pg. 1'. Anson's Law of Contract 26 Edition, Clarendon Press Oxford.

[19]. Palgrave Macmillan Law Masters, Contract Law by Ewan Mckendrick, 9th Edition, Pg.1.

[20]. Ibid, Pg.2.

[21]. Chapter 1, Page 1, An Introduction to the Law of Contract by P.S.Atiyah, edited by HLA Hart. Oxford at the Claredon Press1966.

[22]. Ibid, Pg. 2

[23]. Ibid, Pg.11.

[24]. Chapter 1, Page 2, An Introduction to the Law of Contract by P.S.Atiyah, edited by HLA Hart. Oxford at the Claredon Press1966.

[25]. Ibid.

[26]. Ibid.

[27]. See Ames, Lectures on Legal History, viii,ix-xv; Fifoot, History and Sources of the Common Law (Tort and Contract), Part ii; Holdsworth, History of English Law, iii.142; Simpson, A History of the Common Law of Contract; Stoljar, A History of Contract at Common Law; Atiyah, The Rise and Fall of Freedom of Contract. As Referred in Chapter No.1, Pg.8. Anson's Law of Contract 26th Edition. Clarendon Press Oxford.

[28]. The Medieval Actions: Chapter No.1, Pg. 9. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[29]. Chapter 1 Page No 4 Sutton & Shannon on Contracts 6th Edition by KW Wedder Burn, published by Butter Worth Co. (Publisher) Limited.

[30]. Ibid.

[31]. Y.B. Trin.11 Hen. IV, f.73, Pl.II.; As referred in Chapter No.1, Pg. 9. Anson's Law of Contract 26th Edition. Clarendon Press Oxford.

[32]. Chapter 1, Page No.5, Sutton & Shannon on Contracts 6th Edition by KW Wedder Burn, published by Butter Worth Co. (Publisher) Limited.

[33]. Chapter No.1, Pg. 9. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[34]. Ibid Pg.10.

[35]. Ibid.

[36]. Chapter 1, Page No.4, Sutton & Shannon on Contracts 6th Edition by KW Wedder Burn, published by Butter Worth Co. (Publisher) Limited.

[37]. ibid.

[38]. Ibid. Pages 4-7.

[39]. Misom, [1954] Camb. L.J. 105.

[40]. Chapter No.1, Pg.11. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[41]. Chapter 1, Page No.7, Sutton & Shannon on Contracts 6th Edition by KW Wedder Burn, published by Butter Worth Co. (Publisher) Limited.

[42]. Y.B. Trin.20 Hen. VI, f. 34, pl.41.: As referred in Chapter No.1, Pg.12. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[43]. Chapter No.1, Pg.12. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[44]. Palgrave Macmillan Law Masters, Contract Law by Ewan Mckendrick, 9th Edition, Pg.2, 3.

[45]. The Will Theory. Chapter No.1, Page 13. International Student's Edition, Cheshire Fifool & Furmston's Law of Contract by Michael Furmston 14th Edition, Butter Worths. Lexis Nexis.

[46]. Chapter 1, Page 3, An Introduction to the Law of Contract by P.S.Atiyah, edited by HLA Hart. Oxford at the Claredon Press1966.

[47]. Palgrave Macmillan Law Masters, Contract Law by Ewan Mckendrick, 9th Edition, Pg.3.

[48]. L.R. 19 Eq. at 465.

[49]. The Will Theory. Chapter No.1, Page 13. International Student's Edition, Cheshire Fifoot & Furmston's Law of Contract by Michael Furmston 14th Edition, Butter Worths, Lexis Nexis.

[50]. Photo Production Ltd. V. Securicor Transport, Ltd., [1980] A.C. 827, at P.848.

[51]. Chapter 1, Page 4, An Introduction to the Law of Contract by P.S.Atiyah, edited by HLA Hart. Oxford at the Claredon Press 1966.

[52]. Ibid

[53]. Ibid

[54]. Chapter 1, Page 11, An introduction to the Law of Contract by P.S.Atiyah, edited by HLA Hart. Oxford at the Claredon Press 1966.

[55]. Chapter 1, Page 9-16, An introduction to the Law of Contract by P.S.Atiyah, edited by HLA Hart. Oxford at the Claredon Press 1966.

[56]. Chapter 1, Page 18-19, An Introduction to the Law of Contract by P.S.Atiyah, edited by HLA Hart. Oxford at the Claredon Press 1966.

[57]. Chapter No.1, Pg.6. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[58]. In appendix V to his edition of Pothier's Treaties on Obligations, at p.35: As referred in Chapter No.1, Page 13. Int'l Student's Edition, Cheshire Fifoot & Furmston's Law of Contract by Michael Furmston 14th Edition, Butter Worths. Lexis Nexis.

[59]. St Germain Doctor and Student Bk III, Ch VI, See s V: As referred in Ibid.

[60]. [1893] Q.B. 256 (C.A.)

[61]. [1913] AC 30. See Simpson 14 Journal of Legal Studies 345.

[62]. [1956] A.C. at 728.

[63]. Simpson, A History of the Common Law of Contract, Chapters. IV-VII: As referred in Chapter No.1, Pg 15. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[64]. Holdsworth, H.E.L.iii, 3: As referred in Chapter No.1, Pg.15. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[65]. The Malt Case (1505), Y.B. Mich.20 Hen. VII, f.8, pi.18: As referred in Chapter No.1, Pg.15. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.

[66]. 4 Leon 3.

[67]. Chapter No.1, Page 7. Int'l Student's Edition, Cheshire Fifoot & Furmston's Law of Contract by Michael Furmston 14th Edition, Butter Worths. Lexis Nexis.

[68]. Palgrave Macmillan Law Masters, Contract Law by Ewan Mckendrick, 9th Edition, Pg.70.

[69]. Chapter No.1, Pg.16. Anson's Law of Contract 26th Edition, Clarendon Press Oxford.