COMMERCIAL PRACTICE L4 - Introduction - TERMS OF A CONTRACT

Question 1

What is an express term in a contract? (2)

Answer 1

A term that has been expressly agreed between the parties and can be written or oral. Usually recorded in a written contract in a commercial contract.

Question 2

What do further terms in commercial contracts give effect to? (1)

Answer 2

The presumed but unexpressed intentions.

Question 3

What can any term in a contract be classified as? (2)

Answer 3

Condition or warranty.

Question 4

What is a condition? (1)

Answer 4

A term which is fundamental to the performance of the contract and is considered to go to the ‘root of the contract.’

Question 5

What is a warranty? (1)

Answer 5

A less important term than a condition and does not go to the substance of the contract.

Question 6

What is the innocent party entitled to if the other party breaches a condition? (1)

Answer 6

To repudiate/terminate the contract and / or sue for damages.

Question 7

What is the innocent party entitled to if the other party breaches a warranty? (1)

Answer 7

Damages only.

Question 8

What is a ‘condition precedent’? (1)

Answer 8

Something that is to happen before the contract will fully come into effect.

Question 9

How does a warranty work in regard to sale of goods? (2)

Answer 9

A warranty is similar to a guarantee by a seller or manufacturer regarding a product. It refers to situations in which the product will be repaired or replaced in the event that it fails to work as intended.