Chapter 4 - The Contents Flashcards
Statements made in the course of negotiations will be put into one of which three categories?
Mere puffs, representations and terms
What legal effect does a mere puff have?
Usually none as they are extravagant claims. In Mead v Babington [2007] the comment by an estate agent to the claimants of working with “some of Spain’s most reliable developers” was considered a mere puff.
What legal effect can a representation have if it is untrue?
A misrepresentation can attract legal remedies
Describe the two types of terms.
Express terms which are clearly discussed and agreed by the parties, and implied terms which are read into the contract by the courts either by statute or custom
What four things are considered by the courts when deciding if a statement is a representation or a term?
The importance attached to the statement / whether it has been put into writing / the timing of it / whether the parties had any specialist knowledge or skills
What must be shown in order for a statement to be considered a term, and what case law supports this?
It must be shown that the person the statement was made to wouldn’t have entered into the contract if the statement had not been made. Bannerman v White [1861].
What will the courts consider a statement not included in a written contract to be?
It will usually be assumed to be a representation but sometimes the Courts will consider that a contract was part written and part oral and consider it a term, as per Birch v Paramount Estates Ltd [1956].
How does timing affect a court’s decision as to whether a statement is a representation or a term? What case law supports this?
The longer it has been between a statement being made and entering into the contract, the more likely the court will consider it a representation (Routledge v McKay [1954])
If the person making a statement has relevant specialist skills or knowledge, what are the court likely to consider their statement? (give case law)
A term (Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965]).
If the party receiving a statement has relevant specialist knowledge or skills which are superior to that of the party making the statement, what are the court likely to consider the statement to be? (give case law)
A representation (Oscar Chess Ltd v Williams [1957])
What is an exclusion clause?
A term which attempts to restrict or completely remove a party’s liability in the event of a breach of contract, which is only valid if it is a term of the contract.
What is a limitation clause?
A term which attempts to limit how much a party could be liable for in the event of a breach of contract.
What is the main rule regarding signed written documents containing contractual terms, as established by L’Estrange v F Graucob Ltd [1934]
That the written details will be deemed part of the contract even if the signatories did not read them all.
What is an exception to the rule from L’Estrange regarding signed documents, and case law to support this?
If the signature was obtained by a mistake or misrepresentation, as per Curtis v Chemical Cleaning & Dyeing Co Ltd [1951]
What three ways can written terms be incorporated into oral contracts?
Through notice, through a consistent course of dealing or through a common understanding of the parties
Describe incorporation of written terms into oral contracts through actual notice, and give a brief example of case law
Actual notice is when the term is brought to the attention of the claimant (by reading it or being told of it etc.) at the time of making the contract. In Olley v Marlborough Court Hotel [1949] a notice on the hotel room wall from the manager was not valid as part of the contract for the hotel room as the room had already been paid for at the desk.
Describe incorporation of written terms into oral contracts through reasonable notice, and what was the ‘test’ established by the Court of Appeal in Parker v South East Railway Company [1877].
If it can be shown that reasonable notice was given to a claimant about a term - even if they didn’t know about it at the time of making the contract - it can still be incorporated into the contract. The CoA held the test is not whether the claimant actually read the clause but whether reasonable steps were taken to bring the notice to the claimant’s attention.
If a notice is displayed clearly, but someone is unable to read it (for example because they are blind), will the notice be incorporated in to a contract as a valid term?
Yes, as per Thompson v L M & S Railway Co [1930], complementing the rule of L’Estrange, that a person cannot escape being bound by a clause just because they have not read it.
What are the three main factors the court considers to decide if reasonable notice was given when incorporating a term into a contract
The timing of the notice, the type of document, the type of clause.
How does the timing of a notice affect whether it will be considered reasonable notice and incorporated into a contract? Give a case law example
Reasonable notice must be given at the time of making the contract (Olley v Marlborough Court Hotel OR Thornton v Shoe Lane Parking [1971])
How does the type of document containing the clause affect whether it will be considered reasonable notice and incorporated into a contract? Give a case law example
The document must be one which is expected to contain contractual terms. A receipt or piece of paper not appearing to be part of a contract cannot be claimed binding. (Chapelton v Barry Urban District Council [1940]). The size and position of the notice will also be relevant (Parker v South Eastern Railway Company)
How does the type of clause affect how it will be considered reasonable notice and incorporated into a contract? Describe the red hand rule set out by Denning LJ in J Spurling Ltd v Bradshaw [1956].
The more unusual or onerous the clause is, the more notice will be expected to be given. The red hand rule was that Denning LJ said that some clauses are so unreasonable they would need it to be printed in red ink with a red hand pointing to it just to be sufficient notice.
How are terms incorporated into a contract by a consistent course of dealing? Name an example case in which this happened.
If the court feels the parties have established a sufficiently consistent course of dealing with each other, they may incorporate the same terms into a future agreement, even if no actual or reasonable notice is given. (Example case - J Spurling Ltd v Bradshaw [1956]). It is rarely used in consumer contracts.
What were the rules set out by the judge in Transformers & Rectifiers Ltd v Needs Ltd [2015] regarding how regular a connection between parties should be to be considered a ‘consistent’ course of dealing?
“It does not have to be extensive. Three or four occasions over a relatively short period may suffice”. The course of dealing would need to be “consistent and unequivocal” in order to incorporate terms.
How else can terms be incorporated if there is lack of notice and no consistent course of dealing? Give a case law example.
If incorporating the terms would reflect a common understanding of the parties, as in British Crane Hire Corp Ltd v Ipswich Plant Hire [1975] (parties were in the same trade and the type of clause was common within their industry).
Which three ways can terms be implied into a contract?
By statute, by custom and by the courts.
What does the Consumer Rights Act 2015 apply to?
All business to consumer contracts made after 1st October 2015.
What are the three main terms implied into sale of goods contracts by Chapter 2 CRA 2015?
That the goods will be of satisfactory quality, fit for their purpose and as described
