Contract law emerged as a distinct discipline during the Industrial Revolution through the 18th and 19th Centuries. This growth at a period when industry, commerce and trade were expanding rapidly in the UK illustrates its importance to British society. Contract law underlies and guarantees all contracts and agreements. This makes the field important because it enforces conditions that enable trust between parties in any agreement.
The field of contract law covers all types of agreements. In commerce, any purchase agreement, employment contract or service agreement is covered by contract law. Most people understand a contract to be an agreement written in a formal document and signed by all parties and witnesses. This is not the case. Under British law, any agreement is termed a "contract," including verbal agreements and emails. A contract does not have to be signed in order to be subject to contract law. The field of contract law does not focus on how a contract is formed. It exists to enable parties to an agreement to enforce the conditions of the contract, or seek compensation if the contract is broken.
It is unlikely that any society would be able to function without some form of legal enforcement of agreements. Although there are some parliamentary laws relating to contracts, the majority of the field derives from case law. Case law is also called "common law" and can be equated to "common sense." Under these principles it was inevitable that people feeling themselves cheated under a contract should seek to have their day in court. Contract law formed over the centuries from these appeals for fairness.
The United Kingdom is split into three jurisdictions: England and Wales, Scotland and Northern Ireland. Although each jurisdiction is subject to different statutes, the basis of common law ensures that the evolution of contract law in all three nations evolved at the same pace. There is little difference in the tenant of the law across the UK.
Contract law within the UK is becoming further synchronised by the integration of EU law into the British legal system. This European drive for harmonisation not only bring the UK into line with other EU countries, but standardises contract law within the UK. Owing to the evolution of the British Empire into the Commonwealth, many other nations in the world have similar contract law to the UK, specifically, Canada, Australia, New Zealand, India and South Africa derive much of their contract law from the English system.
As London is a major centre for international banking, English contract law has become the basis for much international finance law. For example, the new Greek bonds issued as compensation for the 2012 Greek debt write down were issued under English contract law. This gave creditors confidence to accept losses on their Greek bonds because their new bonds would not be subject to arbitrary changes in the law by the Greek government. Once more, this demonstrates how the most important aspect of contract law is its ability to create confidence and enable agreements to be made in good faith.