6. Content

Question 1

For a provision to be a ‘term’ of a contract, it must be incorporated. How?

Answer 1

1. By signature
2. by notice
3. By previous consistent course of dealing

Question 2

When will signature of a contract NOT incorporate a provision (exemption clause) as a term?

Answer 2

1. Clause is illegible
2. Effect of the clause has been described inaccurately and innocent party has reasonably relied on inaccurate description
3. Clause is unusual and onerous and is not fairly / reasonable drawn to the attention of the other party

Question 3

How is incorporation by ‘notice’ done? What requirements are there

Answer 3

1. Document containing notice must be contractual in nature (reasonable person test)
2. Innocent party must know of clause, or party relying on clause must take reasonable steps to bring it to their attention before contract is finalized
3. Timing of reasonable steps - must be taken before contract is finalised

Question 4

The Contra Proferentem Rule

Answer 4

if a party relies on a clause which is ambiguous or unclear, court will interpret against defaulting party

Question 5

When does UCTA 1977 apply?

Answer 5

1. All contracts except for trader to consumer
2. Apply to any clause excluding limiting or restricting liability
3. Assesses reasonableness of the clause

Question 6

General Rule wrt excluding liability for harm caused by negligence

Answer 6

1. Negligence causing loss / damage can be excluded but negligence causing death or personal injury cannot be excluded (liability still in place)

Question 7

If one party violates a contractual term which is a condition - what can the other do?

Answer 7

If the term is a condition (and the contract has not been fully performed) innocent party may terminate future performance of the contract and obtain damages for additional loss suffered

Question 8

If one party violates a contractual term which is a warranty - what can the other do?

Answer 8

If the term is a warranty: the consumer cannot terminate the contract but can sue for any damages or loss suffered

Question 9

What is a guarantee. What evidence is needed for a guarantee?

Answer 9

one person guarantees (the guarantor) that if another person (the debtor) does not pay back money owned then the guarantor will pay the money back instead
- must be evidenced in writing

Question 10

What is an indemnity?

Answer 10

Creates a primary obligation. One party promises to reimburse pound-for-pound the other party wrt a particular loss arising under the contract. Primary obligations so do not need to be evidenced in writing.

Question 11

Party suing another under the SGA 1979 for an implied term that goods are of satisfactory quality - what damages can be recovered?

Answer 11

All those which flow naturally from breach / in reasonable contemplation of both parties and are not too remote, could include
1. damage to faulty item itself
2. damage to other physical property
3. personal injury caused by faulty item