Notion of freedom of contract is not always an ideal one. In Suisse Atlantique Societe d'Armement Maritime S.A. v N.V Rotterdamsche Kolen Centrale [1967] 1 AC 361. Lord Reid said, at p. 406:
"Exemption clauses differ greatly in many respects. Probably the most objectionable are found in the complex standard conditions which are now so common. In the ordinary way the customer has no time to read them, and if he did read them he would probably not understand them. And if he did understand and object to any of them, he would generally be told he could take it or leave it. And, if he then went to another supplier the result would be the same. Freedom to contract must surely imply some choice or room for bargaining."
This illustrates that for the lay person freedom of contract is not important.
Despite such new regulations and legislations I think that in the majority of cases, the freedom of contract remains. As stated by Lord Denning in Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269:
"I myself have always regarded it as in the public interest that parties who, being in an equal position of bargaining, make contracts, should be compelled to perform them, and not to escape from their liabilities by saying that they had agreed to something which was unreasonable."
There is some research to back up Dennings line of thinking. Two leading judge-watchers are Adams and Brownsword who explain their interpretive framework in an article called 'The Ideologies of Contract Law'. Adams and Brownsword identify two opposing judicial ideologies: formalism and realism. From the formalist perspective, the judicial role is simply seen as applying the rules in the rule-book regardless of the outcome. To the realist, by contrast, the judicial role is to make acceptable decisions regardless of what the rule-book says. Realist judges fall into two categories. They are either ‘market-individualists’, or ‘consumer-welfarists’.
Market-individualists adhere strongly to the principle of freedom of contract. They see the function of contract law as facilitating competitive exchange in the market place. This function is best achieved by leaving individuals to make their own bargains. It follows that the courts should intervene as little as possible in the economic activities of the market place. However, By contrast, consumer-welfarists are communitarians. They see the function of contract law as a regulating the economic activity of individuals in the market place. So, the courts should readily intervene in order to protect weaker parties - e.g. consumers - from the unfair and unreasonable use of economic power by stronger parties.
This shows that despite legislation seemingly damaging freedom of contract, the actual interpretation of the law complies with it in so far as bargaining power is equal.
This follows in line with thinking in the United States of America. American law has traditionally left private parties free to advance their own interests through contracts. I believe this is the most appropriate way of dealing with private contracts. Particularly if bargaining power is equal.
It could be argued however that despite equality of bargaining power, freedom of contract still is not respected by the law and its legislation. Take The Unfair Contract Terms Act 1977. The Act was passed to provide a substantial degree of regulation of the use of exemption and limitation clauses. It extended earlier provisions in the Sale of Goods (Implied Terms) Act 1973, which were concerned with contracts for the sale of goods only. Despite it appearing to be legislation to protect weaker parties to the contract for example the consumer in a seller/supplier relationship, it also regulates those with individually negotiated terms. Large companies and corporations can be involved in buying and selling to each other. They have the resources to be able to individually negotiate terms within a contract. Therefore, as Denning suggests, they should not be able to exclude liability or escape the contract on grounds such as unreasonableness.
A further example where the court has lessening respect for freedom of contract is where the courts have attempted to minimise the extent to which control over penalty clauses involves control over agreement. Thus, the law relating to penalty clauses is usually presented in the books as a part of the law of remedies, rather than enforceability. There are reasons of convenience that may justify this approach, but, as Corbin wrote, there can be no doubt that in relieving against penalty clauses, the courts are limiting the freedom of contract .
I think that the classical idea of freedom of contract still exists within the law today but it is more to do with the interpretation and application of the law by judges than actual legislation itself. On the whole, I feel that law has somewhat restricted such a notion but this has been for the better of the UK population at large. It has provided us with legislation and regulation that protects us in the 100’s of contracts we make on a daily basis. I do not think that this has been to the expense of the larger companines indulging in privately negotiated contract. As mentioned above I feel that this is recognised by the courts and a lesser protection, if at all any is applied to them because of this.