content of the contract (expressed and implied terms) Flashcards
distinction between a term and mere representation
a failure to comply with a term amounts to a breach of contract and a remedy
no breach for mere representation and if remedy they may claim for the contract to be set aside
basic test for term or mere representation
must consider the intention of the parties:
are the intentions best fullfilled by considering it a term or representation?
oscar Chess LTD v Williams- what would a reasonable bystander interpret the intention as?
Heilbut, symons v Buckleton- intention was to buy a company being brought out by Heilbut Symons, not that the company was labelled a rubber company
indicators of intention
verification
importance
special knoweldge
reliance as an indicator
a statement is unlikely to be a term if the maker of it asks the other party to verify its truth
Schawel v reade- told buyer that he did not need to examine horse as it was fit and he would tell him if it was not, horse was not fit but because of reliance his statment was a term
importance as an indicator
a statment is liekly to be a term where it is of such importance to the persob it is made to, had it not been made, he would not enter contract
couchman v hill- would not buy if cow was pregnant, cow was pregnant and died. importance meant it was a term
special knowledge as an indication
if the maker of statment has some special knowledge compared to the other party, the statement may be held as a term
oscar chess v williams- the claimants had as much knowledge as the seller as they were both car dealers, the statement was a representation
what are expressed and implied terms
expressed- agreed specifically by the contract
implied- not specifically agreed but which are implied into the contract by the courts
express terms
may be agreed orally or in writing
the parole evidence rule in written contracts
as a general rule, the parties cannot use extrinsic evidence to add/vary or contradict the written document
purpose to prevent one party from argue against written contract
3 sources of implied implied terms
terms implied in law (common and statute)
terms implied custom
terms implied in fact
terms implied by fact
intends to fulfill intentions of the parties
the business efficiacy test- needed for the contract to work (The Moorcock- implied term that jetty owners would make it safe for grounding of ship)
uses the officious bystander test- implied term is so obviously needed that a bystander would suggest it (shirlaw v southern foundaries- had to have term that within 10 years he could be removed from job and end contract)
relevant factors to determine the intention of the parties for terms implied in fact
relative knowledge of parties- spring v stevedores
would both parties have agreed to the term- national bank of greece v pinos shipping
can the courts confidently work out what the term would cover- trollope and colls v north west hospital board
terms implied by law
not based on the intention of the parties (based on contractual relationship)
laying down a general rule that in all contracts of a certain type some provision is to be applied unless excluded
(the necessity is based on justice and imbalance of power)
liverpool CC v Irwin
when will a term be implied in law
2 part test
1. in contracts of a defined type:
sales of goods, master and servant, landlord and tenant
elawadi v bank of credity- banker and client
2. must be necessary
liverpool CC v irwin
terms implied by custom
incorporates relevant customs of the market, trade or locality
Hutton v Warren- hadnt benefitted from crops they had grown when removed from land
