Contents of a contract Flashcards
Identifying the express and implied terms of a contract; and classifying contract terms to advise on the remedies available for breach
How many express terms be incorporated into a contract?
- Signature
- Reasonable Notice at the time or before the contract
- A previous course of dealing. The parties must have had a lot of regular dealings in the past that were all on exactly the same terms and conditions.
What factors do the courts take into account in deciding whether or not reasonable notice has been given?
Nature of the document- is the document one which a reasonable person would expect there to be contract terms?
Timing- the notice must come before or at the time of the contract not afterwards.
Onerous terms- the more onerous a term the more a party must do to bring it to the other party’s attention.
if the term is set out on the back of a document are there words on the front drawing the other party’s attention to them, such as ‘see terms overleaf’.
What are terms classified as?
- conditions ( important terms)
- warranties (minor terms)
- Innominate terms.
What options are available to the non defaulting party where a condition is breached?
The innocent party can terminate future performance of the contract as well as claim damages OR can decide to affirm the contract.
What options are available to the non defaulting party where a warranty is breached.
The only remedy is damages however serious the breach is.
How would a term or a warranty be identified in a contract?
In a written contract the terms may be specifically identified as conditions or warranties or otherwise a contract may specify what will be the consequences of breach.
What happens if a contract has been drafted by a non-lawyer and they have been unaware of the significance of calling a particular term a ‘condition’?
it will be a case of looking at all the circumstances and deciding whether, or not, the parties could have intended breach of the particular term to lead to the possibility of termination.
What are ‘innominate’ or ‘intermediate’ terms?
These are terms which the Courts have adopted a ‘wait and see’ approach.
Only if the breach was really serious and effectively deprived the innocent party of substantially the whole benefit they expected to receive under the contract would they have the choice to terminate or affirm the contract
How may terms be implied into a contract?
*Terms implied by custom
* Terms implied in fact
* Terms implied
*Terms implied by statue.
Explain how terms may be implied by custom?
terms may be implied If it reflects what are regarded as the well known and legally binding customs of a particular trade.
How would a term not be implied by custom?
If it contradicts an express term of the contract.
What are terms implied in fact
This is where a term may be implied into a contract where the parties have not expressly agreed something, but the contract would be unworkable without the relevant term.
It is taken that the parties have implicitly agreed what is necessary to make commercial sense of their contract, i.e something that is so obvious it goes without saying.
What are Terms implied in law
This is where a term is implied into the contract, because the law regards it as a necessary incident of a particular type of contract.
For example, in an employment contract, there is an implied duty on the employer to provide a healthy and safe environment for the employee to work in
What are terms implied by statue
a ‘sub-category’ of terms implied in law. You normally see them in business to business contracts for the sale and supply of goods and services.
What are the relevant statues in business to business contracts for the sale and supply of good or services
Sales of goods act 1979
Supply of goods and services act 1979