Purpose of Contract Law

The purpose of contract law is multifaceted, serving as the foundation for legal agreements and transactions across various aspects of society, business, and personal interactions. Its primary purposes include:

Creating legal framework for agreements: Contract law provides a structured legal framework within which parties can freely enter into agreements. This framework outlines how contracts are formed, interpreted, and enforced, ensuring that parties have a clear understanding of their rights and obligations.

Ensuring predictability and certainty: One of the core functions of contract law is to ensure predictability and certainty in commercial and personal transactions. By establishing standardised procedures and principles for contract formation and enforcement, parties can anticipate the legal outcomes of their agreements, thereby facilitating planning and decision-making.

Protecting the parties involved: Contract law serves to protect the interests of the parties to a contract by holding them accountable to their commitments. It provides mechanisms for the resolution of disputes and remedies for breaches, ensuring that injured parties can seek redress. Protection extends to ensuring that contracts are entered into voluntarily, without coercion, and by parties who have the capacity to understand the terms.

Facilitating economic exchange and growth: By providing a reliable basis for the enforcement of agreements, contract law enables economic activity and growth. It underpins a vast array of transactions, from the sale of goods and services to employment agreements and beyond, making it easier for individuals and businesses to engage in complex exchanges with confidence.

Allocating risk: Contracts often include terms that allocate risk between the parties. Contract law allows parties to foresee potential risks involved in their dealings and to allocate these risks through their agreements. This ability to manage and distribute risk is crucial for the stability and efficiency of business operations.

Promoting fairness and equity: Contract law incorporates principles of fairness and equity, ensuring that contracts are not only legally valid but also ethically sound. It provides safeguards against exploitation and unfair practices, such as fraud, misrepresentation, and undue influence, thereby ensuring that contracts are not only enforceable but just.

Encouraging Cooperation and trust: By establishing clear rules for the creation and enforcement of agreements, contract law promotes cooperation and trust among parties. Knowing that agreements are backed by legal recourse encourages parties to comply with their obligations, fostering a culture of trust and reliability in personal and business relationships.

In conclusion, contract law is essential for the orderly conduct of affairs in society, offering a system that balances freedom of contract with legal principles designed to ensure fairness, reliability, and justice in agreements.
Back to blog

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Yale University
Council of Europe
Baker Mckenzie 
University of Chicago
Columbia University
New York University
University of Michigan 
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law


    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory


    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.