What kind of law is contract law, and how to study it

You have opened the contract law reading list, counted the cases, and quietly wondered whether it is too late to take up accountancy. Before you do, answer a smaller question first: what kind of law is this? Students search for it all the time, usually as "is contract law common law?" or "is contract law corporate law?", and the answer turns out to be the key to studying it.

Here is the short version. Contract law is private law, built mostly by judges, with Parliament editing the edges. Once you see it that way, you know how to study it: learn the judge-made tests as tests, learn which statute changes which rule, and practise applying both against the clock. This guide takes University of London LLB students through each step.

So what kind of law is contract law?

Contract law is private law. It governs the promises people and businesses make to each other, and the dispute belongs to the parties. When a contract goes wrong, one party sues the other for a remedy. Nobody is prosecuted and nobody goes to prison for failing to deliver a sofa, however much you may wish otherwise.

It is also, at its core, common law. The rules on when an agreement becomes binding, what a term means and what damages you get for breach were largely worked out by judges deciding real disputes, one case at a time, and those decisions bind later courts. That is why your reading list looks like a guest list for a very long Victorian dinner party.

Statute then sits on top. Where Parliament disliked a judge-made rule, it stepped in, and in those areas the Act wins.

And it is not corporate law, although the two are close neighbours. Company law, about how companies are formed, run and held to account, is a separate subject: the University of London's LLB programme specification for 2025-26 lists Contract law (Level 4) and Company law (Level 6) as separate modules under its Graduate Diploma in Commercial Law. Commercial and company work is built on contract, which is exactly why you learn contract first.

What the contract law module tests

Contract law follows an agreement from start to finish, and the topics line up in roughly the order a real dispute would raise them:

• Formation: is there a contract at all? Offer, acceptance, consideration and the intention to be legally bound.
• Terms: what did the parties actually agree, and what does the law add or refuse to enforce?
• Vitiating factors: was the contract spoilt from the start by misrepresentation, duress or undue influence?
• Discharge: how did it end, whether by performance, breach or frustration?
• Remedies: what does the injured party get, and how much?

A problem question often touches several at once. The sofa never arrives, the seller points to a clause excluding all liability, and the buyer only signed because of something the salesperson said. That is terms, misrepresentation and remedies in three lines, and knowing the order gives you a map before you write a word.

The judge-made tests you learn as tests

The mistake most students make with common law is learning cases as stories. The examiner already knows the smoke ball story. What earns marks is the rule the case stands for, stated precisely enough that you can apply it to a set of facts you have never seen.

Take Carlill v Carbolic Smoke Ball Co [1892] EWCA Civ 1. The company advertised that it would pay £100 to anyone who used its smoke ball three times daily for two weeks as directed and still caught influenza. The Court of Appeal held that the advertisement was an offer, and that where an offer shows that acting on it is enough, performing the condition is acceptance without any need to notify the offeror. The rule you carry into the exam is that one about acceptance by performance, not the smoke ball.

Or take Hadley v Baxendale [1854] EWHC Exch J70, the leading case on remoteness of damage. Damages for breach are those that "may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it." Two limbs, one test, and it turns up whenever a question asks how much a claimant can recover.

For every leading case, write down the rule in a sentence, the facts in a line, and the kind of problem that triggers it. Our free contract law crib sheet sets out the full chain from formation to remedies with the leading authorities, and it is free with a free account.

Where Parliament steps in

Statute changes specific rules, and applying the old common law rule where an Act has replaced it throws away marks for nothing.

Privity. The common law rule is that only the parties to a contract can enforce it. Section 1 of the Contracts (Rights of Third Parties) Act 1999 changed that: a third party may enforce a term if the contract expressly says they can, or if the term purports to confer a benefit on them, unless, for the second route only, the parties intended otherwise.

Misrepresentation. Under section 2(1) of the Misrepresentation Act 1967, a person who made a misrepresentation that led the other party into the contract is liable in damages as if the misrepresentation had been fraudulent, unless they prove they had reasonable grounds to believe, and did believe, that the facts were true up to the time the contract was made. Notice who carries the burden: that detail earns marks.

Exclusion clauses. Section 2 of the Unfair Contract Terms Act 1977 covers business negligence liability: a business cannot exclude or restrict liability for death or personal injury resulting from negligence, and for other loss or damage caused by negligence can do so only where the term or notice satisfies the requirement of reasonableness. It no longer applies to consumer contracts: a consumer buying that sofa relies on sections 62 and 65 of the Consumer Rights Act 2015.

The study habit: for each topic, ask whether a statute changes the common law rule, and if it does, learn the section and its exact test.

Common exam traps

In our experience, the same few habits cost contract law students the most marks.

• Retelling the case. Two paragraphs on the smoke ball, one line on your client. Flip the ratio.
• Skipping formation. If there is no contract, there is nothing to breach. Deal with it first, briefly if it is obvious.
• Forgetting the statute. Applying privity as if 1999 never happened, or ignoring who carries the burden under the Misrepresentation Act.
• Stopping at liability. The question asked what the client can recover. Remoteness is part of the answer.

Each is a problem of application under time, so reading alone will not fix it. Once the rules are in your head, the work is spotting which ones the facts raise, which we cover in issue spotting, not memorisation.

Questions students ask

Is contract law common law?

Mostly, yes. The core rules on formation, terms, breach and damages were developed by judges deciding cases, and those decisions bind later courts. Carlill on acceptance and Hadley v Baxendale on remoteness are two of the best known. Statute then modifies specific areas, such as third-party rights, misrepresentation and exclusion clauses. So study it as judge-made rules first, then learn exactly where an Act has changed them.

Is contract law corporate law?

No. Contract law is the general law of binding agreements between any parties, from buying a sofa to a multi-million-pound supply deal. Corporate or company law deals with how companies are formed, run and held to account, and the University of London's programme specification lists it as a separate module. Commercial and company work rests on contract principles, which is why contract comes first.

How do you study the law of contract?

Work through it in the order a dispute unfolds: formation, terms, vitiating factors, discharge and remedies. For each leading case, learn the rule in one sentence and the facts in one line. For each topic, check whether a statute changes the common law rule and learn the section. Then practise problem questions under time, because the exam rewards applying the rules, not reciting them.

Try it on a real question

The fastest way to test what you know is to answer a problem question and see what you missed. Contract law is a Year 1 subject, and our contract law subject page offers a free trial mock exam: submit a practice answer, get AI-marked feedback, no payment required. It is feedback on a practice answer, not an official mark, and it will show you where your chain from formation to remedies holds and where it snaps.