Essays

Here you will find a selection of essays that have been assessed as being 1st Class or 2:1 degree level.

 The merits of equitable fairness in the context of injunctions. 

A comprehensive discussion concerning the merits of equitable fairness in the context of injunctions would not be achievable without first defining the terms ‘equitable fairness’ and ‘injunctions’. Firstly, an injunction is an order issued by the court compelling the defendant to act, or refrain from acting, in some way. Correspondingly, injunctions are “powerful legal tools: to fail to comply with their conditions is to act in contempt of court and can result in imprisonment”.   Equitable fairness refers to the impartiality of this particular equitable remedy. In order to present an accomplished discussion, there are a number of aspects of the law surrounding injunctions that must be examined since the scope of equitable fairness is broad. An assessment of equitable fairness will include an observation of the issue of who has access to particular types injunctions. Furthermore, the different forms of injunction will be compared in relation to the effects that they have on the parties involved. Moreover, the equitable fairness of judicial discretion in the context of injunctions will encounter scrutiny. It is essential to provide an assessment of varying perspectives of the matter in question. Finally, the notion that it is not possible to have equitable fairness in the context of injunctions will be explored. Injunctions are a flexible and unquestionably valuable equitable resource, however, their fairness is dubious and in need of consideration.  

A historical perspective of equitable jurisdiction 

An understanding of the merits of equitable fairness in the context of injunctions is aided by a consideration of the changing face of the jurisdiction of injunctions over time. Until the middle of the nineteenth century, it was only the Lord Chancellor who possessed the jurisdiction to grant injunctions.  However, following the Common Law Procedure Act 1854, limited jurisdiction was granted to the common law system to award injunctions. The Judicature Act 1873, also served to alter the landscape of this equitable remedy. Interpretation of section 25(8) is of particular importance with regard to the fairness of injunctions. Referring specifically to interlocutory injunctions this section has been the subject of contrasting interpretations. The cases of Beddow and North London Railway Company demonstrate how judicial interpretation can effect the granting of an injunction and therefore, equitable fairness. In Beddow, Jessell MR stated “In my opinion…I have an unlimited power to grant an injunction in any case where it would be right or just to do so: and what is right or just may be decided, not only by the caprice of the Judge, but according to sufficient legal reasons or on settled legal principles”. However, in the North London Railway case, Brett LJ took a different approach, declaring “In my opinion there is nothing in the Judicature Act which can enables any part of the High Court to issue an injunction in a case in which before the Judicature Act there was no legal right on the one side or no legal liability on the other at law or in equity”. The view of Brett LJ was reaffirmed in the Siskina case. The differences in interpretation illustrate how equitable fairness in the context of injunctions is sensitive to the role of the judiciary and the perception of the presiding judge of the court’s jurisdiction. 

Access to injunctions 

The issue of who can obtain certain injunctions is important to a discussion of the merits of equitable fairness in the context of injunctions. It is arguable that injunctions cannot be deemed to promote equitable fairness where there are barriers that prevent some individuals from accessing this equitable remedy. The super-injunction has now become infamous as a resulting of media intrigue. However, an important point must be made in that this injunction is beyond the reach of those who cannot afford to pay £20,000-£50,000 in order to obtain one. It is unquestionable that equitable fairness in respect of injunctions cannot exist where a certain form of injunction is not in reality accessible to the majority of the population. 

Judicial discretion 

Judicial discretion is a matter of incontrovertible significance in relation to the equitable fairness of injunctions. The most pressing matter in respect of judicial discretion is consistency. Equitable fairness cannot be achieved without judicial reliability. The assertions of Lord Bingham are of value in relation to the discretion afforded to judges. Bingham states that “…while some remedies, notably damages, may be claimed as of right if liability and damage are proved against a defendant, others, notably an injunction, are discretionary in the sense that the judge is not bound to grant an injunction even if liability is proved. He has a discretion whether to grant one or not. But rules have grown up to direct the exercise of this discretion. If the defendant’s conduct is shown to be unlawful, and likely to cause harm to the claimant for which he will not be adequately compensated by damages, and if the defendant appears likely to go on doing whatever it is that the claimant complains of and gives no undertaking to desist, the judge is virtually bound to grant an injunction restraining the defendant from acting in that way. He has a discretion, but it is a discretion in name only because it can only be exercised in one way”. It is apparent from the valuable words of Lord Bingham that although injunctions in theory are a discretionary remedy, in practice this is not the case. With respect to the equitable fairness of injunctions, restricting judges in their application of discretion enables consistency in decisions, this immediately denotes fairness. However, the fact that injunctions retain their status as a discretionary remedy enables the courts to react accordingly where challenging circumstances arise as consequence of the flexibility and vast scope of this equitable remedy. 

Types of injunctions 

Some forms of injunction are more controversial in terms of how fair they are than others. Interlocutory (or interim) injunctions cause difficulties that are inherent to their purpose and to the manner in which they are applied. As highlighted by Sarah Worthington, the difficulty with this form of injunction is “…that the court has to decide whether or not to grant the injunction before the parties have fully argued their case. If the wrong preliminary decision is made, then one party’s interests may be damaged without good cause”. The concerns that Worthington points out have undoubted implications with respect to the equitable fairness of injunctions. If wrongfully applied, the courts will serve to unjustly cause harm to one party’s interests. This is inequitable and certainly not the purpose of injunctions. In an attempt to prevent circumstances of this kind and as indicated by the American Cyanamid11 case, the court assesses the “balance of convenience” between the parties. Worthington, aptly describes this process as the assessment of “…the harm each side is likely to incur if the injunction is granted and if it is not, and whether that harm could be compensated for in money when the issues are finally determined at trial. Any injunction is then usually supported by cross-undertakings in damages, whereby the claimant promises to compensate the defendant for any consequential losses should the injunction turn out not to have been warranted”. However, the adequacy of this procedure has been the subject of severe scrutiny. The timing of interlocutory injunctions is hugely significant particularly in the context of commercial dealings. Worthington illustrates a further issue with the interlocutory injunction in terms of its ability to serve as an equitably fair remedy and provides an insight into the limits of the court’s attempts to ensure parity between the interested parties. Worthington states that “…even this test misses the real difficulty, however, which is that the court’s initial stance often signals the practical end to the dispute without the benefit of a full trial. For example, a defendant prohibited by interlocutory injunction from manufacturing and selling a product that allegedly breaches the claimant’s patent may well be forced out of the competing business even though the underlying issues have not been fully tried. But if the courts do nothing, the claimant may be equally wrongly forced out of business by the unfair competition provided by the defendant. The real difficulty is the time it takes to come to a final resolution of the issues before the courts”. The Court is faced with the difficult decision of deciding whether or not it is equitably fair to grant an interlocutory injunction not just in a legal sense, but also in a practical sense in the context of the circumstances of the case. Furthermore, difficulties with respect to equitable fairness are apparent in relation to freezing orders (previously named Mareva injunctions). Freezing orders have been the subject of considerable criticism in relation to the jurisdiction of the Court and the undermining of Parliament’s role. Worthington states “…courts have no jurisdiction, statutory or otherwise, to grant such orders without usurping the functions of Parliament”. This poses the dilemma that equitable fairness in the context of injunctions is achieved, but at the expense of Parliament’s prerogatives. Search orders (formerly known as Anton Pillar orders) can be deduced to promote equitable fairness, since their primary aim is to protect evidence prior to litigation. The above discussion suggests that the variety of injunction in question influences whether or equitable fairness can be deemed to have been ensured. 

Is fairness achievable? 

The issue of whether or not equitable fairness is achievable in the context of injunctions is far reaching. However, it is possible to shed light on the matter with an assessment of the court’s stance when deciding upon whether to award damages or to grant an injunction. Considering the thoughts of Sebastian Kokelaar in Damages versus Injunctions, an article written in the aftermath of the Regan case, enhances this assessment. Kokelaar examines the effects that case law has had on the freedom of the court to award damages in favour an injunction. Thus, inspiring a reflection on how fair the actions of the court are when deciding how to resolve the concerns of a case and whether their judgment can ever be seen to fall within the scope of equitable fairness. Central to Kokelaar’s argument are the cases of Shelfer and Colls. Kokelaar asserts that Regan demonstrates a number of importance points in relation to the granting of injunctions, he states that “there can be little doubt that the good working rule as laid down in Shelfer is still good law. The Court of Appeal has roundly rejected the suggestion that anything said in Colls or any later cases means that judges are now less free to grant an injunction, even in cases such as this where there is a real question over whether the claimant’s legal rights had been infringed”. Kokelaar highlights that the Courts are no less free to grant an injunction as a result of the decision in Regan. This fact is important since it preserves the scope of the Court to grant injunctions, this in turn aids equitable fairness since the Court retains the flexibility to grant injunctions based on the circumstances it faces. 

Conclusion 

To conclude, the merits of equitable fairness in the context of injunctions can be assessed with regard to a number of factors. The jurisdiction of the court is an essential consideration since it provides a view on the limits face in the granting of injunctions. This point has been highlighted with reference to the Common Law Procedure Act 1954 and the Judicature Act 1873. The views of Jessell MR and Brett LJ have illustrated the significance of judicial interpretation in relation to equitable fairness. Moreover, the matter of who can obtain particular forms of injunctions is imperative with respect to fairness, since fairness cannot exist where some individuals are able to benefit from an equitable remedy purely because they possess the wealth to fund it, whereas others are not so fortunate. Judicial discretion is also a key concern to the equitable fairness of injunctions. As pointed out by Lord Bingham, although discretion is limited and in practice judges are confined to certain decisions, the discretionary status of injunctions is important in terms of fairness since their scope is broad. A view on certain types of injunctions has resulted in an understanding that fairness can be prevented by in both a legal sense and in a practical manner. Furthermore, that equitable fairness may come at a cost of undermine Parliament’s role. Whether or not equitable fairness is in fact achievable is dubious. There are circumstances that arise that may result in harm to one party in order to secure equitable fairness for the other. Equitable fairness in the context of injunctions it seems will always be a matter that causes controversy, with some believing that equitable fairness is currently ensured, whereas other commentators will argue to the contrary. It would seem that injunctions do serve to promote equitable fairness, however, the pursuit of equitable fairness has resulted in practical implications. 

Bibliography 

Sarah Worthington, Equity, (2006, Second Edition, Oxford University Press)  

Graham Moffat, Trusts Law, Text and Materials, (2009, Fifth Edition, Cambridge 

University Press) 

Tom Bingham, The Rule of Law, (2011, Penguin Books)  

American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL) 

Regan v Paul Properties Limited and Others [20006] EWCA Civ 1319 

Shelfer v City of London Electric Lighting Company [1895] 1 Ch 287 

Colls v Home and Colonial Stores Limited [1904] AC 179 

Sebastian Kokelaar, ‘Damages versus Injunctions’, (2007) 18 2 Cons. Law 26 

Common Law Procedure Act 1854 

Judicature Act 1873 

Beddow v Beddow (1878) 9 Ch D 89 at 93 

North London Railway Company v Great Northern Railway Company (1883) 11 QBD 

30 

Siskina (Cargo Owners) v Distos Compania Naviera SA [1979] AC 210  

Mareva Compania Naviera SA v International Bulkcarriers SA [ 1975] 2 Lloyd's Rep 

509 

Duncan Lamont, Sex, Lies and Super Injunctions, 2011 

Anton Piller KG v Manufacturing Processes Limited [1976] Ch 55  

The Law of Obligations

The extent to which the relevant statutory and judicially formulated legislation in relation to consumer and retailer rights hinders the application of the freedom of contract.

Freedom of contract is an essential aspect of the law of obligations in both a theoretical and practical sense. At present, freedom of contract is unacceptably restricted under the current statutory and judicially inspired system of law. Freedom of contract is the term employed to describe the notion that contractual relationships should not be subjected to unwarranted interference. The term is founded upon the thought that those who have the benefit of the necessary competence should have the ability to enter into contracts without statutory or judicial restriction. The description of the freedom of contract put forward by Treitel is of value here. Treitel delared that “in its most obvious sense, the expression ‘freedom of contract’ is used to refer to the general principle that the law does not restrict the terms on which the parties may contract: it will not give relief merely because the terms of the contract are harsh or unfair to one party.” In order to discover the extent to which freedom of contract has been hindered, the Unfair Contract Terms Act 1977, the Unfair Terms in Consumer Contracts Regulations 1999 and the Consumer Protection Act 1987 will be scrutinised. Furthermore, an outlook of relevant case law will provide further insight into the attitude towards freedom of contract. Moreover, a demonstration of the views of numerous academics on this matter and an inspection of those views will enhance the authority of the assertions expressed in this discussion. Additionally, the distinction between classical and neo-classical contract law will be put forward followed by an inference of its effect on the status of freedom of contract. There is an unquestionable need to protect and preserve the notion of the freedom of contract rather than subtly and irresponsibly extinguishing its scope, this discussion will determine whether the current law succeeds in achieving this requirement.

The importance of preserving the freedom of contract

The importance of retaining freedom of contract is demonstrable with reference to a number of issues that either have occurred or will occur should its scope be limited. Contracts in commercial situations are seemingly the most central concern to the hindrance of the concept. Business success is founded upon a vast array of factors, the skill of the individuals managing the enterprise and economic conditions are merely two examples. However, it is not the subject of discussion here to point out the most significant aspects of commercial success, since that is a murky and uncertain topic, simply that such aspects exist. What is clear, however, is the fact that when entering into a contractual relationship in the context of a commercial situation both parties are doing so with the aim of enhancing their own financial position. Freedom of contract serves to benefit the business that possesses the higher degree of commercial acumen. Although it may be argued that restrictions on the freedom of contract may be successful in securing a more level starting position, this should not be the concern of the law or of the courts. Niccolo Machiavelli once expressed the view “No enterprise is more likely to succeed than one concealed from the enemy until it is ripe for execution.” A powerful statement and one which can be aptly applied to this discussion. Based on this assertion, to Machiavelli, it would be unwise for a party entering into a contract to reveal its intentions until that party is equipped to exercise them. Freedom of contract is not an oppressive notion favouring the strong over the weak, it is quite the opposite. It provides for a situation in which both parties have the opportunity to enter into an agreement with the intention of creating legal obligations in which the parties possess the freedom to agree to whatever they wish. Similarly, to reject conditions that they deem unfavourable to their position. Excessive restriction on the freedom of contract is unnecessarily paternalistic. The fact that one party has the benefit of greater resources, knowledge or experience should not be considered a basis on which to intervene to protect the apparently weaker party. The skill of negotiating a contract that benefits the commercial interests of a party should not be harnessed to protect the ignorant. There exist of course, incontrovertibly necessary limits on freedom of contract. Although ostensibly paradoxical, such limits preserve freedom and shall be presented a later stage. With respect to the position of consumers in the context of contract law and the freedom of contract, it would seem that there is a greater need to cast a watchful eye over contractual proceedings. The basis of this argument has a societal foundation. There is a notable difference between the relationship between two commercial practices and the relationship between a business and a consumer. In many circumstances, a contract between a consumer and a business is merely a byproduct of obtaining a product or service in the eyes of the consumer.

Freedom of contract and the Unfair Contract Terms Act 1977

The Unfair Contract Terms Act 1977 has had unquestionable effects on the freedom of contract. For example section 24(1) of the Act states “In determining for the purposes of this Part of this Act whether it was fair and reasonable to incorporate a term in a contract, regard shall be had only to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties to the contract at the time the contract was made.” This provision has implications on the freedom of contract. The reasonableness test restricts the terms on which negotiating parties may agree. Moreover, section 17(1)(a) of the Act serves to protect negotiating parties, but also restricts the freedom of contract albeit in a manner that is welcomed. This section states “(1) Any term of a contract which is a consumer contract or a standard form contract shall have no effect for the purpose of enabling a party to the contract: (a) who is in breach of a contractual obligation, to exclude or restrict any liability of his to the consumer or customer in respect of the breach.” This section is attempting to ensure the proper use of consumer or standard form contracts, limiting the freedom of contract in a favourable manner that protects the position of the parties. Were it not for safeguards of this nature, negotiating parties may decide to avoid entering into a legal agreement. It is clear that the Unfair Contract Terms Act 1977 has affected the scope of the freedom of contract, however, the manner in which this has occurred is encouraged due to its protection of contracting parties.

Freedom of contract and the Unfair Terms in Consumer Contracts Regulations 1999

The effects that the Unfair Terms in Consumer Contracts Regulations 1999 have had on the freedom of contract are wide ranging. Regulation 5(1) and (2) of this statutory instrument has had the effect of clarifying what shall be regarded as an unfair term. It states “(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer. (2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.” This can be said to hinder the freedom of contract, since it restricts the manner in which contracting parties can operate and which terms they may incorporate into a contractual agreement. Regulation 7(1) dictates the language that must be employed. This has the effect of indirectly affecting the freedom of contract as parties are being instructed how to articulate their agreements. It states that “A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.” Freedom of contract is impinged upon here as parties must reconsider the language that they use. This will aid those who are less experienced with contractual dealings or perhaps less intelligent individuals, since they will have greater understanding of the terms of the contract in question. The Unfair Terms in Consumer Regulations 1999 have had the effect of improving the safeguards that exist to prevent the freedom of contract becoming unmanageable.

Freedom of contract and the Consumer Protection Act 1987

The Consumer Protection Act 1987 has had implications on the freedom of contract. The aim of this Act is to defend consumers from iniquitous contractual relationships. The Act has the effect of ensuring that consumers are not at risk from clauses that are not brought to their attention that exempt the party with whom they are contracting from certain obligations. Furthermore, the Act states that parties may not “offer to supply, or enter into an agreement to supply goods or services, on terms that are unfair, unreasonable or unjust, or at a price which is unfair, unreasonable or unjust.” The Act clearly prevents the exploitation of the consumer in a manner that hinders the freedom of contract. However, freedom of contract should not be so important that it encourages the manipulation of consumers.

The effect of case law

The effect of case law on the freedom of contract is a key consideration since judicial activity over time has unquestionably altered the attitude towards the notion. Chris Turner highlights that “contract law only concerns itself with enforceable bargains.” Furthermore, he reflects upon the importance of the Williams case, stating that this case “…demonstrates that the courts are not interested in the quality of the bargain that parties freely reach. They are merely concerned with the existence of a bargain that is then enforceable.” This seems to infer that the interest of the courts is not on the freedom of the parties, but the resulting agreement and whether that agreement can be deemed to have legal effect. Moreover, the case of Walford illustrates the inherently adversarial views of negotiating parties. Each party holds the intention of accomplishing their commercial objectives. Subsequently, an obligation of negotiating in good faith is as unfeasible in practice as it is innately contrary to the position of negotiating parties. Next, the claims of Waddams in respect of conceptions of fairness also serve to uncover the extent to which the freedom of contract has been hindered. Waddams proposes that “conceptions of fairness, both procedural and substantive, underpin the rules of English contract law.” This statement accurately indicates the importance of fairness in the eyes of the court. The view of Steyn LJ in the case of First Energy aids an understanding of how the freedom of contract works in practice alongside an insight into the attitude of the court towards fairness in contractual relationships. Steyn LJ professed that “…a theme that runs through our law of contract is that the reasonable expectations of honest men must be protected. It is not a rule or a principle of law. It is the objective which has been and still is the principal moulding force of our law of contract. It affords no licence to a judge to depart from binding precedent. On the other hand, if the prima facie solution to a problem runs counter to the reasonable expectations of honest men, this criterion sometimes requires a rigorous re-examination of the problem to ascertain whether the law does indeed compel demonstrable unfairness.” The above reference to the reasonable expectations of honest men seems to place a suggestive restraint on the freedom of contract. With regard to the statement made by Steyn LJ in the First Energy case, Chen-Wishart declared that “recognition of a general principle against unfairness would facilitate the rational development of rules which conform to the standards of fair and reasonable people. By giving contracting parties greater security against the risk of opportunism and exploitation, it may also make parties more willing to embark on otherwise risky ventures.” This remark is of extreme significance to the freedom of contract, it suggests that the practice of entering into contractual relations is encouraged by the implementation of safeguards rather than allowing absolute freedom to negotiating parties. Since, such freedom may result in the avoidance of both commercial contracts and consumer contracts, where those involved would rather avoid a legal agreement that pursuing one that would be detrimental to their commercial or personal position.

The theoretical perspective

A theoretical view on the freedom of contract is essential to a comprehensive discussion. Although the assertions of numerous theorists will be assessed, when assessing the notion it would be negligent to omit the views of Sir George Jessell and Patrick Atiyah, particular attention will be given to their opinions. Jessell is irrefutably an advocate of the freedom of contract he believes that “If there is one thing more than another which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting and their contracts, when entered into freely and voluntarily, shall be held sacred and shall be enforced by courts of justice.” Here, Jessell is indirectly critical of any restriction imposed by the courts on those who possess the necessary capacity to enter into a contractual relationship. Atiyah is the orchestrator of an argument that compares politics with the freedom of contract. Atiyah professes that “freedom of contract has largely lost its close association with democracy” and feels that “no one argues that the people cannot be trusted with the vote, but many still argue that they cannot be trusted in the market-place.” This political comparison displays the lack of trust afforded to those in the market place and symbolises the changing face of contract law and the general disdain direction at the world of commercial dealings. Freedom of contract in the mind of Patrick Atiyah wrongly encounters greater scrutiny than the freedom to vote. Atiyah maintains that we must “extricate ourselves from the tendency to see contract as a monolithic phenomenon.”This suggests that Atiyah views contract law as a multi-faceted entity, freedom of contract being one of those facets. The examination of the interference in contracts by statutes and judicial activity is also assessed by Chris Turner. Turner illustrates that “…parties to a contract should be free to include in a contract whatever terms they choose. In this way the courts will not interfere in contracts by trying to make a bad bargain good. They will merely ensure that there is a bargain and that is has been properly created.” This is clearly a view against the meddling of the law in contractual dealings. In additional, the work of Collins also strengthens a theoretical perspective on freedom of contract and contract law in general. Collins believes that “…in most societies, markets serve as the principle mechanism for the production and distribution of wealth.”It is debatable whether the distribution of wealth should be a priority of the court when assessing the viability of contracts. However, what is clear is that freedom of contract is viewed less favourably now than in the past.

From classical to neo-classical

Contract law like all law is subject to evolution over time. The transition from classical contract law to neo-classical contract law has had implications on the standing of the freedom of contract. As highlighted by Mindy Chen-Wishart, “the classical model assigns the law a non-interventionalist role, ideally confined to identifying and enforcing the parties’ agreement. The argument runs that, once the rules of the contract ‘game’ (which should themselves be minimalist) have been observed, the courts should respect the outcome as the expression of the parties’ exercise of freedom; if the procedure is fair, the outcome must logically be fair. The law’s legitimate sphere of control is thus confined to ensuring procedural fairness in contract.” Wishart adequately describes the classical stance towards the freedom of contract.  The most valuable aspect of the description refers to the fairness of the procedure from which a contract is formed. As Wishart indicates, if the procedure that precedes the forming of a contract is fair then the contract itself through the application of logic must also be fair. Thus, freedom of contract has not hampered the ability for either of the contracting parties to contribute to a fair agreement. The resulting practical implications of that agreement should not be the concern of the courts. The assessment of the classical theory by Ewan McKendrick is valuable to this discussion. McKendrick professes that “the classical theory is the will theory. Closely associated with laissez-faire philosophy, this theory attributes contractual obligations to the will of the parties. The law of contract is perceived as a set of power-conferring rules which enable individuals to enter into agreements of their own choice on their own terms.” From this it is evident, that the classical theory is closely associated with the will of the parties. The will theory has been fervidly criticised since “…doctrines such as consideration, illegality, frustration and duress cannot be ascribed to the will of the parties, nor can statutes such as the Unfair Contract Terms Act 1977.” The will theory has been rightly criticised and as have the attempts of Professor Fried to refine the theory with his contention that contract law is founded upon the “promise-principle.” The criticism of Fried is based on two arguments. Firstly, as explained by McKendrick “…that it is difficult to explain many modern contractual doctrines in terms of liberal individualism or laissez-faire philosophy. The growth of standard form contracts and the aggregation of capital within fewer hands has enabled powerful contracting parties to impose contract terms upon consumers and other weaker parties.” In terms of the freedom of contract, the effect that the evolution of modern contractual doctrines has had in relation to liberal individualism and laissez-faire economics is that Parliament and the courts have been influenced into enforcing boundaries in respect of contractual power. The second criticism of Fried’s assertions is that “…in many cases, the courts do not uphold the promise-principle because they do not actually order the promisor to carry out his promise. The promisee must generally content himself with an action in damages.” In respect of the freedom of contract, the promise-principle is theoretically sound, however, placed in practice it is dubious. Freedom of contract may occur, Fried’s principle may stand strong, but following the legal agreement there are other factors that the court must consider where a promise has not been carried out, such as mitigation. From a neo-classical perspective, contract law is at fault for endorsing a change in practice, deterring from the classical values of autonomy and freedom and nominal legal intervention and embarking on journey towards paradoxically excessive limited freedoms and more stringent regulation, such as those affecting consumer and retailer rights.

Conclusion

To conclude, it is evident that freedom of contract is an important notion. If too much freedom is granted to contracting parties, this may have the effect of allowing exploitation to occur. However, if freedom of contract is limited to an extent that is too severe, then it may result in instances where commercial activity is stifled. The statutory provisions that have been discussed in conjunction with relevant case law have provided an insight into the status of freedom of contract. Statutory and judicially formulated legislation in relation to consumer and retailer rights have imposed limitations on the freedom of contract, however, it would seem that they are necessary limitations. The theoretical perspective that has been presented displays how the freedom of contract is regarded in terms of its importance in contract law. Whether or not statutory and judicially formulated legislation in relation to consumer and retailer rights have hindered freedom of contract there are academics who vehemently believe that freedom of contract should be preserved as far as possible. However, it is clear from this discussion that although the freedom of contract is an essential aspect of contract and that freedom has been restricted in certain circumstances, it is necessary for the law to have done so. Freedom of contract is not so important that individuals and commercial enterprises are unfairly treated. Therefore, the extent to which statutory and judicially formulated legislation in relation to consumer and retailer rights have restricted the freedom of contract is extensive, however, it is an incontrovertible necessity.

Bibliography

G H Treitel, An Outline of the Law of Contracts, (Fifth Edition, Butterworths, 1995)

Chris Turner, Unlocking Contract Law, (Third Edition, Hodder Education, 2010)

Williams v Roffey Bros & Nicholls Contractors Ltd [1990] 1 All ER 512

Walford v Miles [1992] 2 A.C 128

S Waddams, ‘Unconscionabiity in Contracts’ (1976) 39 MLR 369

First Energy (UK) Ltd. v. Hungarian International Bank Ltd. [1993] 2 Lloyd's Rep. 195, 201

Mindy Chen-Wishart, Contract Law, (Third Edition, Oxford University Press 2010)

Printing and Numerical Registering Co. v Sampson (1875), L. R. 19 Eq. 462 (Sir George Jessell)

Patrick Atiyah, Essays on Contract, (1986),

Patrick Atiyah, Contracts, Promises and the Law of Obligations, (Oxford University Press, 1986)

H Collins, The Law of Contract, 2003,

Ewan McKendrick, Contract Law, (Eight Edition, Palgrave Macmillan, 2009)

Charles Fried, Contract as Promise, (Harvard University Press, 1981)

Adams J, and Brownsword, ‘The Unfair Contract Terms Act: A decade of Discretion’ 104 QLR 94

Unfair Contract Terms Act 1977

Unfair Terms in Consumer Contracts Regulations 1999

Consumer Protection Act 1987

Critically examine the purposive approach often used by the Court of Justice of the European Union when interpreting EU law. What is there to stop the Court usurping the prerogatives of the EU legislature?

The purposive approach frequently adopted by the Court of Justice of the European Union when interpreting European Union law is a matter that is unquestionably contentious. The purposive method of interpretation possesses a number of characteristics that can be deemed to be irrefutably beneficial to the practice of interpreting and implementing European Union law. However, there also exist numerous negative consequences of this method of interpretation. In order to meticulously critically examine the purposive approach used by the Court of Justice, it is first imperative to explain the meaning of this method of interpretation. Furthermore, it is necessary to understand what is inferred by the prerogatives of the European Union legislature. Firstly, the most appropriate manner in which to present an understanding of the nature of the purposive method of interpretation employed by the Court of Justice of the European Union is through the use of a statement asserted by the Court itself. In the Cilfit case, the court declared that “every provision of [Union] law must be placed in its context and interpreted in the light of the provisions of [Union] law as a whole, regard being had to the objectives thereof and to its state of evolution at the date on which the provision in question is to be applied”. Therefore, the purposive (or teleological) approach essentially means that European Union law should be interpreted with consideration to the purpose of the law in question at the date of interpretation. Moreover, the question of whether the methods that are available to prevent any usurpation of the prerogatives of the European Union legislature is a question concerning the safeguards that are accessible to ensure that the superiority of the legislature is not undermined by the actions of the Court. A critical examination of the matter in question will be performed with the application of case law in conjunction with scrutiny of European Union Treaties, the work of relevant commentators and academics, journal articles and personal reasoned analysis. Irrespective of the protective measures to be examined that exist to avert the occurrence of the Court irresponsibly interpreting European Union law, it is indisputable that the Court has become transgressed in terms of its judicial role. However, there are certain measures that if properly employed serve to protect the prerogatives of the European Union legislature.

Prerogatives are safeguarded by virtue of the origin and purpose of European Union law

It would seem that perhaps the most fundamental manner in which the prerogatives of the European Union legislature are protected is the origin and purpose of European law. As pointed out by Charles Hobson, “…European unity began in the wake of wars that disrupted prewar economies that were similarly dependent on international commerce…European states faced challenges posed by the collapse of their commercial and economic systems and by their vulnerability to rival superpowers”. European states “experienced the same incentives toward eliminating internal trade barriers and had much to gain by pooling resources into a closer economic union”. Therefore, the Court of Justice of the European Union would be damaging the fabric of European unity were it to act with disregard towards the objectives of the legislature. The Court need only remind itself of the origin of its own existence in order to motivate itself to preserve the legislature’s intentions. It is apparent from the objective of the first of the Foundation Treaties, the European Coal and Steel Community 1952, that there was a determination to take the raw materials of warfare and place them under the authority of a supranational body. The formation of a European Community and later the European Union sought to unify Europe following a period a war and protect the respective economies of each Member State. The Court of Justice, therefore must recall these facts and act to serve each Member State in a manner that is aligned with the original reasons for uniting Europe, such an imperative obligation serves to prevent the Court from usurping the legislature’s prerogatives.

Interpretation in relation to the multilingual nature of European Union law

The European Union is comprised of twenty-seven Member States with twenty-three languages that possess an equal degree of authenticity. It is inevitable that circumstances will arise that call into question the manner in which the subtle variations of European Union law that exist after translation should be interpreted by the Court. The case concerning the Institute of the Motor Industry is a superlative example of such a situation.  The issue in the aforementioned case concerned whether the supply of goods and services by the Institute of the Motor Industry was exempt from VAT under Article 13(l) of the Council Directive 77/388/EEC (commonly known as the Sixth VAT Directive). The exemption in dispute stipulated that “supply of services and goods closely linked thereto for the benefit of their members in return for a subscription fixed in accordance with their rules by non-profit making organisations with aims of a political, trade-union, religious patriotic, philosophical, philanthropic or civic nature, provided that this exemption is not likely to cause distortion of competition”. The Institute of the Motor Industry argued before the London VAT and Duties Tribunal that it should be deemed exempt from VAT since it was a non-profit making organisation with aims of a trade union nature. Furthermore, they sought to adopt the French version of the Directive, which possesses a seemingly wider scope with its reference to “objectifs de nature syndicale”. However, based on the established case law of Milk Marketing Board, the Court of Justice of the European Union professed that “the wording used in one language version of [Union] provision cannot serve as the sole basis for the interpretation of that provision, or be made to override the other language versions in that regard. Such an approach would be incompatible with the requirement of the uniform application of [Union] law. In the event of divergence between language versions, the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms part”. In this instance, the purposive approach of the Court of Justice was prevented from usurping the European Union legislature due to the importance of the proper functioning of the single market, this is clear from the Court’s reference to uniformity. It would have been damaging to imply the superiority of one language over another.  The importance placed on the protection of the single market plays an important role in preserving the legislature’s prerogatives.

Protection of the legislature’s prerogatives in respect of Treaty provisions

There are a number of Treaty provisions that serve to prevent the usurpation of the prerogatives of the legislature. Firstly, Article 19(3)(b) of the Treaty on European Union provides that “the Court of Justice of the European Union shall, in accordance with the Treaties give preliminary rulings, at the request of courts or tribunals of the Member States, on the interpretation of Union law or the validity of acts adopted by the institutions. If the Court were to act in such a way that could not be considered to be in accordance with the Treaties then it would be acting ultra vires, the Court is bound by this provision. Next, Article 267 of the Treaty on the Functioning of the European Union implements an obligation on the Court to act in a certain fashion. This provision prevents the Court of Justice from applying European Union law to the underlying facts of the case or to interpret or apply national law.

Judicial restraint and impropriety

One of the ways in which the prerogatives of the European Union legislature can be protected from exploitive usurpation by the Court of Justice is paradoxically the action of the judiciary itself. Judicial restraint is an inherently effective course of interpretational conduct in respect of the desire to adhere to the legislative aspirations of the legislature. The cases P v S and Cornwall County Council and Grant demonstrate the value of judicial restraint. In P v S and Cornwall County Council, a teacher had informed his employer that he intended to undergo gender reassignment surgery, the school and the County Council immediately dismissed him. Following a complaint to an employment tribunal in Truro, the tribunal requested a preliminary ruling from the Court of Justice. The Court of Justice of the European held that dismissal for reasons relating to gender reassignment surgery was a breach of Directive 76/207/EEC of the Union, commonly known as the Equal Treatment Directive. Although the Directive does not refer to gender reassignment since this was not an issue in 1996, the Court interpreted that Directive in the light of contemporary reality. The Court held that even though the Directive in question did not mention gender reassignment, dismissal for that reason was a violation of the Directive. Consequently, it is evident that judicial restraint in this instance has aided the protection of the prerogatives of the European Union legislature. This is the result of the Court of Justice upon encountering an issue created by social and medical evolution, preserving the objectives of the Union regardless of the fact that the issue under consideration did not benefit from specific existing legislation. In Grant, the Equal Treatment Directive was again in dispute, however, the circumstances were different. Lisa Grant was an employee of South West Trains and was in a long-term same sex relationship. Under South West Trains employment policy, employees were entitled to certain travel concessions; they were also entitled to these concessions for their spouses or long-term opposite sex partner. However, the company’s employment policy excluded long-term same sex partners. Lisa Grant complained that to deny her and her partner the travel concessions that were available to other employees constituted unlawful discrimination and was in violation of the Equal Treatment Directive. Grant contended that in the light of P v S and Cornwall County Council, the Equal Treatment Directive should be interpreted broadly to encompass discrimination on the grounds of sexuality. However, the Court did not adopt this approach. One of the reasons being that the Amsterdam Treaty amended the European Community Treaty to inject into that Treaty a new provision enabling action to be taken by the Union legislature to combat discrimination on the grounds of sexuality. However, the Amsterdam Treaty was not in force at the time of the Grant case. The Court could not take much account of it except to express that it was not the role of the judges to introduce a ban on sexuality discrimination by judicial means when quite obviously the Amsterdam Treaty contends with this matter. The Court could not pre-empt the Treaty, the Court and Grant had to wait for the new provision to become enforceable and to give rise to legislation to combat discrimination on grounds of sexuality. The judges were not prepared to carry out the legislature’s work for it. Although the Court was widely expected to continue in its mode of expansion interpretation, it refrained from doing so, it chose to respect the role of the legislature. This is a clear example of the legislature’s prerogatives being preserved by judicial restraint. Additionally, as highlighted by Albors-Llorens “…the court also laid down from its early case law that it would only answer the questions that had been specifically put to it”. Here, Albors-Llorens illustrates a further example of the Court displaying judicial restraint, limiting its own role. Albors-Llorens, continues with an example of the Court acting in this way, with reference to the Deutschamann case.  Declaring “…in Deutschmann v Germany, the Court was asked whether a German charge impose for the grant of import licences was incompatible with Article 90(1) EC (ex Article 95(1)). It seemed clear that the charge was solely imposed on imported products and therefore, it would have fallen within the scope of another set of Treaty provisions, namely Articles 23 and 25 EC. The Court stated that Article 86 was not applicable”. The Court has clearly set out to act in a manner that can be deemed as a responsible use of its jurisdiction. Furthermore, the Court can be seen to have performed in a sensible manner in the Goffart case. This case concerned the interpretation of a Regulation No. 3, the question put to the European Court of Justice by the national Court was regarded as unnecessarily long winded, the Court of Justice simplified the issue and gave an interpretation based on a particular aspect of that provision. The case of Office National de Pensions can also been seen to have adopted this approach. From the above examination, it is undeniable that judicial restraint and the prevention of judicial impropriety are imperative in order for the Court to prevent itself from usurping the prerogatives of the European Union legislature.

Principles emerging from European Union case law

It is clear that the cases of Pfeiffer and Van Colson have aided the prevention of unruly interpretation of European Union law. As highlighted by Sacha Prechal, in Pfeiffer, the Court added that the requirement of consistent interpretation is inherent in the system of the Treaty. The Court linked the obligation explicitly to the need to provide legal protection and to ensure the full legal effectiveness of Community law.Therefore, it is evident that case law can have the effect of ensuring that the Court of Justice does not diverge from its duty to properly interpret European Union law in terms of the prerogatives of the legislature. In Van Colson, the Court provided a further indication of a limitation of its ability to undermine the legislature of the European Union, the fact that if it were to dispense with the legislature’s prerogatives then it would be guilty of hypocrisy. Prechal points out that in Van Colson the Court made clear that national courts are under a legal duty to interpret and apply national law and in particular legislation adopted for the implementation of a Directive, in conformity with that Directive. Consequently, it would be contradictory to the instructions given to national courts for the Court of Justice to stress the importance of national courts respecting the purpose of the European Union law and the provisions of Treaties and then to itself appear insolent towards it, regardless of the fact that the Court is not bond by its previous rulings.

Instances of failure to stop the Court usurping the prerogatives of the EU legislature

Regardless of the safeguards against the undermining of the prerogatives of the European Union legislature, there are circumstances that have resulted in criticism of the Court for acting outside of the boundaries of its role. Advocate General Eleanor Sharpston openly disapproved of a particular stance taken by the Court. Sharpston, speaking in the Bartsch case, condemned the findings of the Court in the case of Mangold. Sharpston articulated that “Mangold has attracted a certain amount of academic criticism. The general theme of the criticism is that the Court (of its own volition, without good reason and against the wishes of the legislature) extended the scope of a Directive, to give it effect before the end of its transitional period and in horizontal circumstances, by making an innovative reference to a general principle of [EU] law”. Essentially, the Court has increased the range of Article 288 of the Treaty on the Functioning of the European Union against the wishes of the legislature. Furthermore, it would seem that the interpretation of the Court has destabilised the purpose of direct effect. It is apparent that irrespective of inevitable criticism, the Court has the capacity to veer away from the legislature’s prerogatives.

Conclusion

To conclude, the danger of the Court of Justice of the European Union usurping the prerogatives of the European Union legislature is suppressed in a number of ways, however, there are instances that demonstrate how the safeguards in place are powerless to prevent divergence from the wishes of the legislature. The origin and purpose of uniting Europe provides an inherent need to respect the prerogatives of the legislature in order to preserve parity, particularly with respect to the single market. The single market is conceivably the most central concern of European Union law alongside judicial restraint. Furthermore, specific Treaty provisions and case law have limited the scope of the Court’s jurisdiction or demonstrated its limitations. Judicial restraint is also at the forefront of the ways in which the Court can be prevented from acting in a manner that is contrary to the prerogatives of the European Union legislature. Irresponsible interpretation of European Union law is an incontrovertible concern and certain cases, such as Mangold may suggest that it does occur, however, the methods that exist to prevent usurpation by the Court of Justice, particularly judicial restraint, can be deemed to have been successful in ensuring the Court does not stray beyond the boundaries of the legislature’s intentions.

Bibliography

Case C-283/81 CILFIT [1982] ECR 3415

Charles F. Hobson, ‘The Marshall Court and the European Court of Justice, [2000] 33 J. Marshall L. Rev 1197

Case C-149/97 Institute of the Motor Industry [1998] ECR I-7053

Council Directive 77/388/EEC Article 13(l)

Council Directive 77/388/EEC Article 13(l)  (French Version)

Case C-372/88 Milk Marketing Board v Cricket St Thomas [1990] ECR I-1345

Case C-149/97 Institute of the Motor Industry [1998] ECR I-7053, para 16.

Consolidated Version of the Treaty on European Union [2010] OJ C83/15

Case C-13/94 P v S and Cornwall County Council [1996] ECR I-2143

Case C-249/96 Grant v SW Trains [1998] ECR I-621

Joined Cases C-397/01 to C-403/01 Pfeiffer [2004] ECR I-8835

Case 14/83 Von Colson [1984] ECR 1981

Sacha Prechal, Directives in EC Law, (Oxford University Press, 2009, Second Edition)

Case C-427/06 Bartsch [2008] ECR I-7245

Case C-144/04 Mangold [2005] ECR I-9981

Case C-427/06 Bartsch [2008] ECR I-7245 (AG Sharpston)

Albors Llorens, ‘The European Court of Justice, More than a Teleological Court’, Cambridge Yearbook of European Legal Studies, 1999 Vol.2 

Case 10/65 Deutschmann [1965] ECR 469

Case 22/67 Caisse Regionale de Securite Sociale du Nord-Est v Goffart [1967] ECR 321

Case 11/67 Office National des Pensions v Couture, [1967] ECR 379

European Coal and Steel Community 1952

Directive 77/388/EEC

Directive 76/207/EEC

Treaty on European Union

Treaty on the Functioning of the European Union

European Community Treaty

Amsterdam Treaty 1997