A.4. Terms of the Contract Flashcards
Bannerman v White (1861) 10 CBNS 844.
TIME OF THE STATEMENT. IMPORTANCE OF THE STATEMENT. The Seller told the buyer there was no sulphur in the hops: which the buyer told the seller was a preliminary stipulation - that he would not have bothered even asking about the price. The statement was held to be a part of the contract. The truth of a pre-contractual statement being a precondition of any binding agreement being reached will strongly support the view that it was intended to form part of the contract. With regards to time: this case supports the view that a statement made at or near the time of concluding will make it more likely to be a term.
Routledge v McKay [1954] 1 All ER 855.
STATEMENT IN WRITING. TIME OF THE STATEMENT. The statement with regards to the age of the motorcycle was not in the written contract and was made some time before the contract was concluded. The further the statement is in time from conclusion: the less likely it is to be a term. Something not specifically in writing is presumed to not be a term (there are several important exceptions.)
Birch v Paramount Estates (1956) 167 EG 396.
STATEMENT IN WRITING. SPECIAL KNOWLEDGE. The seller of the house: the developer: stated that the house sold would be as good as the show house. He had expertise: and this was taken to be a term of the sale. That statement was made orally and not in writing: but as an exception to Routledgeve v McKay: that oral statement was taken as part of the written contract.
Dick Bentley v Smith
SPECIAL KNOWLEDGE. Extension of Birch v Paramount. Even if the maker didn’t have specific knowledge of the case at hand but through their expertise could find out: his statements will usually be held to be terms. Seller: a car dealer: made a statement as to the mileage of the car. This was held to be a term here as he should have been able to find out and had more knowledge than the buyer. CORROLARY to Oscar Chess v Williams. In both cases: in one the expert receiving the statement: in the other making it: it will be interpreted in the favor of the non-expert.
Oscar Chess Ltd v Williams [1957] 1 All ER 325.
SPECIAL KNOWLEDGE. Here: as a corollary to Birch v Paramount: the maker of the statement was not a specialist: and his statement with regards to the age of the car. The intelligent bystander could not say would not say that he instended to guranatee the age of the car. Also: the buyer: being a specialist in cars: was better able to find out the age of the car. Held to be a representation.
Ecay v Godfrey (1947) 80 Lloyd’s LR 286. Available on the VLE.
VERIFICATION OF STATEMENT. If the person who made the statement asked or told the other party to check: it’s more likely to be a representation. The seller made statements about the boat’s conditions: but told buyer to have it surveyed - clear he didn’t intend his statements to be a term. The same principle applies when verification is expected (such as house): even if it is not actively encouraged. Held that his statement was a representation.
Schawel v Reade [1913] 2 IR 64.
VERIFICATION OF STATEMENT. SPECIAL KNOWLEDGE. The buyer was inspecting the horse which he told the seller was for stud purposes. The seller told him the horse was sound. Even though verification would be expected in this case: the expertise of the seller was the predominant ratio: and it was held the statement was a term.
J Evans & Son v Andrea
EXPRESS TERMS allowed the shipper to send goods however he wanted. Asked permission to send by container and goods would be under deck. It was agreed orally and the goods were lost off the deck. They were allowed damages as the oral statement was a contractual promise.
City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129.
EXPRESS TERMS. This is a case with a written contract and oral collateral contract. Oral statement that he could live in the office: collateral contract made: consideration being he signed lease.
Rainy Sky v Kookmin Bank
Where the language is clear, the courts will apply whatever the parties have agreed. However, such as here, in cases of ambiguous language, the more reasonable business sense must be applied. If a clause is capable of two meanings, as on any view this clause is, it is quite possible that neither meaning will flout common sense. In such circumstances, it is much more appropriate to adopt the more, rather than the less, commercial construction.
Prenn v Simmonds
Exception to PE where terms are technical: amibgous or absurd. We should use the matrix of fact to find out the purpose of the contract.
Investors Compensation v West Bromwich
CRP - MOF - EP - RU - NM
Too wide an application of matrix of fact: Lord Hoffman stated absolutely anything that can contribute to our understanding. 5 rules for construing contract: 1. What the document would convey to a reasonable person with relevant background knowledge. 2. Background is everything in the matrix of fact. 3. Law excludes prior negotiations. 4. Meaning is not literal meaning: but what one would reasonably understand against the background. 5. It is not easily accepted that there have been linguistic mistakes: especially in formal documents.
Bank of Credit v Ali
Seek the meaning meaning which the document would convey to a reaonable person having all the background information which would reasonably have been available to the parties in the situation they were in at the time of the contract.
Crema v Cenkos
Market practice can be taken into account as part of the factual matrix even if not notorious: certain and reasonable
Re Sigma
Where there is a large number of contracting parties: matrix of fact less important
P&S Platt v Crouch
Upheld the exclusionary rule 0 only looked at documents showing the genesis and aim of the contract.
Oceanbulk Shipping v TMT
reduced exclusionary rule. Only facts can be used: whether or not without prejudice. Objective background facts admissible: subjective statements excluded. In order to encourage out-of-court settlements?
What pre-contractual negotiations can be used for
R-E-PD-OC-M
Roger’s estate put down octagonal chess in the morning
- Equitable remedy of rectification if a mistake has been made. 2. estoppel. 3. words given unusual meaning (Private dictionary). 4. Formation of oral contracts. 5. Claims for misrepresentation.
Dean and Dean v Dionissou
In the absence of rectification: it is the court’s job to construe the document. Communications preceding contract can provide context and background: but cannot substitute written terms.
Chartbrook v Persimmon Homes
Courts can correct a mistake in a contract by construction. 2 conditions must be met: 1. It has to be a clear mistake: 2. it must be obvious how to cure the mistake. No pre-contractual negotiations allowed (exclusionary rule) - during negotiation: the parties’ positions are changing: only the final contract records the final agreement.
Arnold v Britton
automatic adjustment of the service fees that would result in the $1M+ yearly payment. Commercial common sense should not be used to undervalue the language of the C. Where the terms are clear: the Parties will be bound.
Cherry Tree Investments v Landmain
A more restrictive approach will be taken with publicly registered contracts. Little weight to background info.
Autoclenz v Belcher
A purposive approach will be used for employment contract - can base interpretation on intentions: as the relative power of parties must be taken into account.
Jacobs v Batavia
PAROL EVIDENCE RULE. The general rule is that if the parties have entered into a written contract no other evidence can be adduced to add to: vary or contradict the written contract.
Henderson v Arthur
PE RULE: written agreement effectively destroyed oral agreement previous
Couchman v Hill
PE RULE: partially written agreements - there is a written document but clearly intended to be qualified by other written or oral statements: PE displaced
Mannai Investment v Eagle Start
The meaning of the words is part of material to understand: but must also use our knolwedge of the background to interpret
Smith v Wilson (1832) 3 B & Ad 728
PAROL EVIDENCE RULE EXCEPTION: CUSTOME OR TRADE USAGE. The written document said 1:000 rabbits: but local custom dictated that this mean 1:200 rabbits. This evidence was accepted.
Webster v Cecil (1861) 54 ER 812.
PAROL EVIDENCE RULE EXCEPTION: RECTIFICATION. One of the parties might subsequently discover that there is an inaccuracy in the written document. In such a case: they coul seek rectification. It was allowed in this case.
Pym v Campbell (1856) 6 El & Bl 370
Where the contract does not contain a starting and finishing date: extrinsic evidence may be allowed. Here: oral evidence was allowed of the parties’ agreement that the contract would only commence on approval by a third party.
Hutton v Warren (1836) 1 M & W 466.
IMPLIED TERMS: CUSTOM. Extrinsic evidence of custom and usage is admissible to annex incidents to written contracts: in matters with respect to which they are silent. The contract impliedly makes reference to the terms of custom. Farmed the land to the end of the lease and asked compensation: court upheld his claim as this was customary
Les Affreteurs Reunis SA v Leopold Walford (London) Ltd [1919] AC 801.
IMPLIED TERMS: CUSTOM. Limit of custom implied term. Where a term of the contract contradicts an express term: the express term will prevail.
Scally v Southern Health and Social Services Board [1991] 4 All ER 563.
DISTINCTION: IMPLIED IN FACT vs IMPLIED IN LAW.
The Moorcock [1886–90] All ER Rep 530.
IMPLIED IN FACT: In some cases: the courts imply a term into a contract to give effect to the unexpressed intention of the parties. To give the transaction business efficacy as must have been intended by both parties.
