Contents of a contract Flashcards
Express terms - contract is in writing
Statements are terms. Statements made before are representations. Can sometimes rely on oral promises but only if the contract is partly oral, partly in writing and partly by conduct.
Entire agreement clause will prevent a party from attempting to rely on additional oral terms
Express terms - contract is signed
Where a written agreement is signed, the parties to it are considered to be in agreement with everything it contains even if they have not read it
Express terms - importance of the statement
The greater the importance the more likely it is to be considered to be a term.
If the party would not have entered into the contract if the statement is highly likely to be considered a term
Express terms - reliance of specialist knowledge and skill
Where one party relies on a statement made with specialist knowledge the statement may be considered a term
Express terms - timing of the statement
Where there is a significant lapse in time between the statement made and the formation of the contract - more likely to be a representation
Classification of terms - effects
- Breach of any terms gives the other party the right to claim damages
- Breach of some terms normally gives the other party the right to terminate the future performance of the contract
- The party terminating can claim damages if there is additional loss
Classification of terms - conditions
Major term. Root of contract. Most important terms. Objective test - deciding the importance of the term which has been broken at the time the contract was made, instead of looking at the effects of the breach and the loss or damage which has resulted from the breach. Breach allows claimant to access all remedies. Can terminate future performance of contract.
Classification of terms - warranties
Less important terms. Objective test - deciding the importance of the term which has been broken at the time the contract was made, instead of looking at the effects of the breach and the loss or damage which has resulted from the breach. The contract may be able to continue after breach. Limited to damages only. Cannot terminate
Classification of terms - innominate terms
‘Wait and see’ approach. The courts look at the effects of the breach on the injured party to determine whether the breach itself was a condition or warranty. Necessary to wait until the breach of contract has occurred yo decide whether the innocent party should be allowed to terminate the future performance of the contract
Implied terms - Implied by fact
Reflect the presumed intentions of the parties. 2 tests:
- Business efficacy test - the court should consider whether a term is necessary to make the contract work commercially
- Officious bystander test - a term could only be implied if the point was so obvious that it went without saying that that was what the parties intended
Implied terms - implied in law
Implied because of the type of contract. Where a contract is of a kind which frequently occurs the court may identify provisions which are typical of that kind of contract and say that these provisions will be implied terms unlike the parties make contrary provisions. Tenancy agreements and employment contracts
Implied terms - implied by local custom and trade
Form the contract against a background of common assumptions based on what usually happens in that locality or in that line of business. Terms will not be implied by custom where they would be contrary to the express terms of the contract
Implied terms - previous course of dealings between the parties
The exemption clause was incorporated into the contract by the parties’ consistent course of dealing. Not confined to exemption clauses
Implied terms - Statutory implied terms - Which act applies?
If it’s for a service, e.g installing machinery, between businesses it is the SALE OF GOODS AND SERVICES. If its for a good between businesses, e.g just the washing machine not the fitting of it it is the SALE OF GOODS. If its service/goods between consumers and consumer and business its CRA
Implied terms - Statutory implied terms - Reasonable price
All 3 acts state that reasonable price will be charged.
