The traditionally accepted view of law is that it is an independent set of rules governing society routinely applied by reference to existing precedent. The law is considered autonomous and distinct from custom, morality, religion and politics. In western civilisations, legal systems are built on liberal foundations. Protecting the freedom of individuals to interact with others is the goal of liberalism. It is fundamental to capitalist societies that individuals are free to make individual choices and enter into agreements of their choosing. This is reflected in the common law doctrinal guidelines of contract law, particularly the formation elements. These doctrines categorise which precedent is applicable in which situation, and when. They serve to safeguard the rights of parties who have chosen to be contractually bound. Contract law reflects this value-consensus in a disinterested fashion.
Private agreements made between individuals are considered beyond the realm of the public arm of intervention. Even though the system does contain seemingly conscience-based equitable rules, such as those concerning capacity, undue influence, and mistake, these are merely seen as principles necessary to deny contractual enforcement if the free will of a party has been overborne. Underlying contract law, and indeed the entire common law, is the rule of law. This ensures that everyone is governed by the same set of legal rules. Disputes are settled by an independent judiciary, which uses objectivity and the application of precedent. The predictability and flexibility of contract law makes it effective in guiding and controlling parties’ conduct. This makes contract law useful and provides certainty and stability to the system.
This web page was prepared on 1 June 2015, and the law or facts contained in this article may have changed.