4 - Contract terms : general Flashcards
what must a statment from the negotiation stage be?
Terms - form part of the contract
NOT
Mere presentations - opinions/facts unliklely to form part of a contract
deciding between terms and mere representation
Court often have to decide if the terms of a particular contract are ones that are contractual or mere representations – this is especially important where one party is trying to rely on matter discussed before the actual agreement
when are terms decided upon
during negotiations or inserted into a contract
Express Terms
Matters which are discussed during negotiations and then clearly added to the contract
testing if a term is an expressed term or not
1) How important was the representation?
If either party attaches great importance to a statement made during negotiations then it is likely to be considered to be a term of contract
2) A party relies on the skill of the other making the representation
If a party makes a specific representation due to their level of expertise and the other party relies upon it then the representation is likely to become a term
** 3) Was the written agreement signed?**
If a written agreement is signed the courts will usually take this as both parties have read and understood
4) A representation is not a term unless both parties are aware of it when making a contract
If a party is unaware of a term which is relied upon later by one of the parties then it is unlikely to be actionable
Birch V Paramount Estates 1956
They were told that their new build house “would be as good as the show house” when it wasn’t they sued.
This representation was held to be a term as B bought the house on the basis that it was “as good as the show house.”
how important was the representation
Oscar Chess v William 1957
W, a ordinary motorist sold his car to O, a dealer. W stated that it was a 1948 Morris when it was a 1939 Morris. O the dealer tried to sue
Held that W wasn’t an expert and it was an innocent misrepresentation, O as the expert should have noticed. Therefore it did not form part of the contract and O couldn’t sue
relying on the skill of the other
L’Estrange v Graucob 1934
L bought a cigarette vending machine from G. There was a written contract that had been signed and it contained exclusion clauses. The machine stopped working and L tried to sue. As the exclusion clause had been signed by L – court held G was not liable
was it signed?
implied terms
Not all terms may be expressed or written into the contract. It maybe that an event occurs and doesn’t cover that particular eventuality. You then have to imply the terms
how may terms be implies
fact
statute
terms implied by fact
Through customs – where something is common practice over a long period of time
Through common trade practices – specific to the type of industry
To preserve business efficacy - when two parties contract, the effectiveness of the agreement must be adhered to
Moorcock v 1889
D owned a wharf and allowed C to dock their ship. Both parties knew the ship would be damaged at low tide if it stayed at the jetty. The ship was then damaged
limitations on implied terms
The courts will not simply imply a term because it is reasonable – it has to be necessary
the officious bystander test
A term will be impled by fact if “is something so obvious that it goes without saying …” – the officious bystander test as per Shirlaw v Southern Foundries 1939
Terms Implied by Statue
Due to the rise of our consumer society and the unequal power of a business v consumer governments have introduced statutory terms that are implied into contracts to try and balance the power of the individual v business.
Consumer Rights Act 2015 – is one of the main one
