Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

SQE1 - Contract 🎁 > 6. Determining the Terms of the Contract > Flashcards

6. Determining the Terms of the Contract Flashcards

1
Q

What are the two types of contract terms?

A

Conditions and warranties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Can contract terms be express and implied?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the difference between a term and a representation?

A

A term is intended by the parties to form part of the contract.

A representation is made merely to induce a party to enter into the contract.

  • note that for the purposes of classifying term, reliance is irrelevant. Objective test.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How is it determined whether a statement is a term or a representation?

A

Based on the intentions of the parties, viewed objectively through their conduct from the perspective of a reasonable person

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How will the court likely classify an oral statement which was not included in a written contract, and why?

A

As a representation, because if the parties thought it was important enough to be a condition, they should have put it in the written contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the three factors a court will take into account when determining whether a statement is a term or a representation?

A
  1. Importance of the statement
  2. Stage of negotiations at which the statement was made
  3. Whether the party making the statement had any specialist skill
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the question to ask when considering whether a statement is important?

A

If the other party wouldn’t have entered into the contract but for the statement, it is likely to be deemed important, and therefore a term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the question to ask when considering specialist skill?

A

Did the seller make a factual statement that should be within the scope of their knowledge, intending that the other party would act on the statement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Why is the distinction between term and representation important?

A

If the statement turns out to be untrue, the available remedies depend on whether it was a term or representation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the impact of a statement being deemed a term?

A

Any failure to comply will be a breach of contract, entitling the other party to damages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the impact of a statement being deemed a representation?

A

If it is untrue and it has not been incorporated into the contract, the remedy will depend on whether the misrepresentation was made innocently, negligently, or fraudulently

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Why is the distinction between condition and warranty important?

A

It determines the remedies which are available upon breach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Along with condition and warranty, what is the third category of term, where it is unclear whether it is a condition or warranty?

A

Innominate term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What will the courts give more weight to: the term’s label or its effect on the operation of the contract?

A

The term’s effect on the operation of the contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is a condition?

A

A term so fundamental that it goes to the root of the contract, and the contract does not work without it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is another name for a breach of condition?

A

Repudiatory breach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What options are available to the other party upon a breach of condition?

A

They can terminate the contract and sue for damages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the effect of the other party affirming a contract after breach of condition?

A

They lose the right to terminate, but can still sue for damages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is a warranty?

A

A term that is incidental/collateral to the main terms of the contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Can the other party terminate the contract for breach of warranty?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

With innominate terms, how does the court determine what remedy should be available?

A

By looking at the effect of the breach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

In what instance will the court deem an innominate term to be a condition?

A

Where the other party loses substantially the whole of the benefit of the contract due to the breach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the effect of time being of the essence on whether a term is a condition or warranty?

A

Time of the essence: the term is a condition (late performance gives rise to right to terminate)
Time not of the essence: the term is a warranty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

When is time presumed to be of the essence?

A

In commercial contracts, where a delivery time has been agreed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Regarding notice, what is required for a term to form part of a contract?

A

The parties must have reasonable notice of it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What is the parol evidence rule?

A

When a contract is in writing, there is a general presumption that external evidence cannot vary the terms of the written contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What are three exceptions to the parol evidence rule?

A
  1. Implied terms
  2. If there is a secondary (collateral) contract
  3. Where the court finds that the contract was always partly written and partly oral
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What is an entire agreement clause?

A

A term in written contracts which provides that the written document constitutes the entire agreement between the parties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What is one instance in which the courts are unwilling to uphold an entire agreement clause?

A

Where it is being used by a party to avoid liability for misrepresentation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What is the binding effect of an implied term?

A

Same as if it had been expressly agreed between the parties

31
Q

What are four ways through which terms are implied?

A
  1. Statute
  2. Courts
  3. Custom and usage, or
  4. A course of dealing between the parties
32
Q

What are the three main sources of law through which contract terms are implied?

A
  1. Sale of Goods Act 1979
  2. Consumer Rights Act 2015, and
  3. Supply of Goods and Services Act 1982
33
Q

What is an important term implied by the SGA?

A

That the seller has legal right to sell the goods

34
Q

What is the impact of a seller not having title?

A

There is no consideration, and therefore no valid contract

35
Q

What are other terms implied by the SGA?

A

Goods sold should:

  1. match any description given by the seller
  2. be of satisfactory quality (if seller is a business), and
  3. be fit for any particular purpose made known to the seller by the buyer (if seller is a business)
36
Q

What does satisfactory quality mean?

A
  1. Fit for the purpose for which such goods are generally used
  2. Free from minor defects
  3. Safe and durable
37
Q

What defects are excluded when considering satisfactory quality?

A
  1. Defects brought to the buyer’s attention
  2. Defects that would have been obvious to the buyer had they inspected the goods prior to sale
38
Q

Are terms implied under SGA conditions or warranties and what is the importance of this?

A

Conditions, meaning that if they are breached, the buyer can terminate the contract, reject the goods, and refuse to pay, but must return the goods

39
Q

When is a breach of terms implied under the SGA a breach of warranty?

A

When the breach is so slight that it would be unreasonable for the buyer to reject the goods

40
Q

What does the Unfair Contract Terms Act 1977 provide regarding SGA implied terms?

A
  1. UCTA prevents a seller from excluding the implied term as to title
  2. Exclusion of liability for all other implied terms will be valid only if reasonable
41
Q

What are some terms implied by the Supply of Goods and Services Act 1982?

A
  1. Supplier will carry out service with reasonable care and skill
  2. Supplier will carry out service within reasonable time (if no time is agreed)
42
Q

Are terms implied by the SGSA conditions, warranties, or innominate terms?

A

Innominate terms

43
Q

What terms are implied under SGSA for goods supplied incidental to the provision of services?

A

The same terms which are implied under SGA

44
Q

What does the Unfair Contract Terms Act 1977 provide regarding SGSA implied terms?

A

Same as for SGA

45
Q

What is the scope of the Consumer Rights Act 2015?

A

Supply of goods/services in a consumer context, i.e. between trader and consumer

46
Q

What is a big difference between CRA and SGA/SGSA?

A

Under CRA, liability for breach of implied terms cannot be excluded at all

47
Q

What are four terms implied by the CRA into contracts for services?

A
  1. Carried out with reasonable care and skill
  2. Completed in accordance with information relied upon by the consumer (e.g. price)
  3. Completed for a reasonable price
  4. Completed within a reasonable time
48
Q

Although the courts are reluctant to interfere with the presumed intentions of the parties generally, other than in the statutory contexts, when are they prepared to imply terms into contracts?

A

To give business efficacy to the contract, i.e. make it work in a way which reflects the parties’ intentions and expectations

49
Q

What is the officious bystander test in the context of a court implying terms into a contract?

A

They will only do so if the term to be implied is so obvious to a reasonable person that it goes without saying

50
Q

What kind of term are the courts unlikely to imply?

A

One that contradicts an express term

51
Q

What is required for the courts to imply a term through course of dealings between the parties?

A

The parties have contracted on the same terms on several occasions, enough to show a regular and consistent course of dealings

52
Q

Whilst the courts will generally not get involved to make an incomplete or vague contract work, what is required of a contract before they would get involved?

A

Sufficient certainty

53
Q

What is one instance where the courts will not get involved with a contract?

A

Where the court is unable to conclude that the parties intended to be bound

54
Q

What are four instances in which the courts will not get involved in a contract which is uncertain?

A
  1. Mechanism, e.g. a clause, between the parties to resolve uncertainties
  2. Commercial cases in which the parties are familiar with the trade
  3. Future performance over a period of time (parties can resolve uncertainty over time), and
  4. Where there has been partial performance, or one party has invested on the basis of the agreement
55
Q

What is one term the statutes will help resolve if it is not dealt with in the contract?

A

If no price has been agreed and none can be determined from the dealings between the parties, the buyer must pay a reasonable price

56
Q

In deciding to sever an uncertain term, what is the test the courts will use?

A

Whether the term can be severed without affecting the substance of the bargain between the parties

57
Q

What is the effect of an uncertain term not being able to be severed?

A

The entire contract is void for uncertainty

58
Q

How is a ‘consumer’ defined under the Consumer Rights Act 2015?

A

an individual acting for purposes wholly or mainly out of their trade, business, craft, or profession.

59
Q

On whom does the burden lie to establish that a ‘consumer’ was not acting wholly/mainly outside their trade/profession?

A

on the trader, seeking to assert this point.

60
Q

What statutory protection governs B2C contract entered into prior to Oct.1st 2015?

A

Same ones as in B2B context

61
Q

What are the three implied terms for contracts of goods under the CRA?

A
  • goods should be of satsifactory quality (s.9)
  • fit for purpose (s.10)
  • goods sold should match their description (s.11)
62
Q

What are the three implied terms for contracts for digital content under the CRA?

A
  • should be of satsifactory quality (s.34)
  • reasonably fit for purpose (s.35)
  • match any description of it given by the trader to the consumer (s.36)

‘reasonableness’ - assessed objectively taking into ccount description, price, and any relevant circumstances (ie. public adverts by trader).

63
Q

What are the three implied terms for contracts for **services ** under the CRA?

A
  • service is performed with** reasonable care and skill** (s.49)
  • where no price is agreed, a reasonable price is to be paid.
  • where no time is fixed, service is performed in a reasonable time (s.52)
64
Q

In addition to the three implied terms for service contracts in the B2C context, what is an additional way a term may be implied via s.50(1)?

A

anything said or written to a consumer by a trader, or on their behalf, about the trader or the service is to be included as a term of the contract where it is taken into account by the consumer when:
- deciding to enter into contract
- making any decision about the service after entering into the contract.

65
Q

What are the three forms of remedies available for breaches of any of the three implied terms for contracts of goods under the CRA?

A
  • short term right to reject
  • right to repair and replacement
  • right to price reduction or the final right to reject
66
Q

How long does a consumer have to exercise its short term right to reject goods under the CRA?

A

30 days

timeclock starts either from the time (i) ownership has passed and (ii) goods have been delivered; and (iii) where the trader is required to install the goods to allow consumer to use it, after the consumer is notified this has been completed.

67
Q

In order to obtain a price reduction or final rejection of the goods, what initial steps must be exercised before either remedy becomes available?

A
  • after one repair/replacement, the goods do not conform to the contract;
  • where right to repair/replacement cannot be exercised (because it would disproportionate/impossible);
  • consumer has required trader to repaid goods, but trader failed to do so within reasonable time and w/out significant inconvenience to consumer.
68
Q

In what instance will the right to repair or replace a good under the CRA be unavailable?

A

where repair or replacement would be impossible or disproportionate

69
Q

Within what timeframe must a consumer exercise their final right to reject goods under the CRA?

A

6 months
- qualifies for full refund, w/ no deduction for use (except for motor vehicles).

70
Q

What are the four forms of remedies available for breaches of any of the three implied terms for contracts of digital content under the CRA?

A
  • right to repair/replace
  • right to price reduction
  • right to receive a fund within 14 days
  • right to repair/compensation for any damage caused by the trader’s negligence to any ancillary device/other content.
71
Q

What are the two forms of remedies available for breaches of any of the three implied terms for contracts of services under the CRA?

A
  • right to require repeat performance
  • right to price reduction
72
Q

In what instance is the remedy of repeat performance unavailable under the CRA?

A

if completion in conformity with the contract is impossible.

73
Q

What is presumed under the parol evidence rule?

A

if a contract in in writing, all its terms are included in writing.
- note - terms may still be implied, simply a ‘presumption.’

SQE1 - Contract 🎁 (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions