People make agreements every day; they are ubiquitous and unremarkable. Almost all the time, these agreements go off without a hitch – we shop, we meet friends, we buy coffee, and we travel on public transport. Each involves an arrangement whereby two persons make a commitment to do something together that is usually to the mutual benefit of each. This often but not always involves the exchange of money or services. When problems do arise, people tend to resolve them by some form of negotiation, or they simply lump it. However, there are situations when there is sufficient at stake that people turn to the law for relief or vindication. It is the law's job to decide which agreements it is prepared to treat as giving rise to legal relations and what remedies might be available to an aggrieved party.

Although there are various areas of special rules (e.g., insurance, investment, real estate), the general law of contract lays out the basic framework within which agreement making is regulated. As does the good guest, the law steps in only when invited to do so; there is no general monitoring role whereby the legal process approves or supervises all agreements. But when and where the law is brought into action, its principles and standards evaluate agreements; their performance; and in particular, the consequences of any breach of their express or implied terms and conditions. One issue that goes to the heart of contract law and still occupies the attention of judges and jurists is the calculation of damages that can be claimed if there is a breakdown in legal agreements reached. A relatively old English case still stands as the main origin for the modern law of contract damages.