What is freedom to contract?

You may have heard that under English laws, individuals and companies have ‘freedom to contract’. But what does that jargon mean?

Freedom to contract has several aspects:

  1. you can choose whether you enter into a contract, and with which persons (party freedom, or freedom to contract);
  2. you can choose the terms of that contract i.e. the obligations you and the other individual/company are going to promise to carry out (term freedom, or freedom of contract terms).

What should you do?

When it comes to a contract strategy, realise that you can enter into bad, unwise and unfair bargains and no-one can or will stop you (provided it is legal). You are ‘masters of your contractual fate’ (as Denning said). It is your job to do your research about whether the other party to your contract is competent, trustworthy and financially stable!

Also be aware that an English court cannot change any bad contract you have signed simply to make it better. The courts have always been clear that it is their job to act as an ‘umpire’ to enforce the rules you have agreed to apply to the project you are involved in. It has no role in making your contract fair [see note below].

Do not whine: read before you sign!

Note: A slight anomaly is the court’s role in deciding whether specific contract provisions can be relied on (and enforced) under the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015.

Like this article?

Share on Facebook
Share on Twitter
Share on LinkedIn
Share on Pinterest

Leave a comment