contents of a contract B3 Flashcards
types of term
conditions
warranties
innominate terms
conditions
- most important terms
- if failure to perform it renders the contract meaningless
the innocent party can treat contract as ended and sue for damages
(poussard v spiers and pond)
warranties
- less important terms, secondary importance
- even if breached the contract can still continue
- innocent party must continue with contract and can only sue for damages
(bettini v gye)
innominate terms
- dont quite fit into either conditions or warranties
- courts will look at consequences of the breach of term
- if very serious consequence, will be classed as condition
- if less serious consequence, will be classed as warranty
(hong kong fir shipping co ltd v kawasaki kisen kaisha ltd)
expressed terms
those that are expressly agreed at the time the contract is entered into
mere puffs
extravagant claims for the thing being offered
e.g. red bull gives you wings
representation
pre contractual statements that are intended to persuade the other party to enter the contract but not intended to form part of the contract itself
terms
- form part of the contract itself
- can be expressed, clearly discussed and agreed between the two parties
- or implied, not considered by parties but is incorporated into the contract by statute
- if the terms are broken there is a breach of the contract
is it representation or expressed term?
courts look at:
- importance of the statement
- if the contract is verbal or in writing
- timing
- specialist knowledge or skill of the party making the statement
importance of the statement
if it is of particular importance it is more likely to be a term
(couchman v hill)
verbal or writing
if contract is in writing courts will usually hold that any verbal statements not included in written agreements are representations, not expressed terms
(routledge v McKay)
timing
if there is large gap between mkaing of the statement and formation of the contract it is less likely to be an expressed term
special knowledge or skills of the party making the statement
if has specialist knowledge, statement made is more likely to be a term
(dick bentley v harold smith motors)
exclusion clauses definition
expressed terms of a contract with attempt to remove or restrict a parties liability in the event of a breach of contract
exclusion clause examples
- signed agreements (lestrange v gaucob)
- express knowledge of the clause (olly v marlborough court hotel)
- reasonable notice of the clause (thornton v shoe lace parking ltd)
signed agreements
if the agreement is signed by party then he/she is bound to its terms including any exclusion clauses
(lestrange v graucob)
express knowledge of the clause
in the absence of a written agreement, if theclaimant was aware of the exclusion clause at the time of entering into the contract, they will be bound by it
(olly v marlborough court hotel)
reasonable notice of the clause
reasonable notice of the exclusion clause must be made. the greater the clause the greater the effort needed to bring it to the others attention
(thornton v shoe lace parking ltd)
implied terms definition
terms that do not appear in the written contract or oral negotiations. can be implied by two ways:
- common law
- statute
terms implied by common law
- terms implied by prior dealings between the parties (hillas v across)
- terms implied through the business efficacy and the officious bystander test. basically make it work (the moorcock)
- terms implied by custom (hutton v warren)
terms implied by statute
various statutes that imply terms of contract but only interested in consumer rights act 205
consumer rights act 2015
applies to all contracts made after 1 october 2015 between a trader and a consumer
- contract to supply goods e.g. buying from a shop
- contract t o supply services e.g. window cleaning
terms implied into a contract to supply goods
s9 - are they satisfactory quality (grant v australian knitting mills)
s10 - fitness for purpose (baldry v marshall)
s11 - description (re moore and co ltd and landauer and cos arbitration)
s9 satisfactory quality
goods must be of satisfactory quality. take into account:
- description of goods
- the price or other consideration for the goods
- all other relevant circumstances
(grant v australian knitting mills)
s10 fitness for purpose
when consumer makes it known to trader the particular purpose for which the goods will be used for. this only applies when the consumer relies on the traders judgement, not if consumer made up their own mind s to whether it is fit for purpose
(baldry v marshall)
s11 description
s11(1) when goods are sold under description there is implied terms that they will match the description
s11(2) when goods sold by sample there is an implied term that the goods must match the sample
(re moore and co ltd and landauer and co’s arbitration)
remedies for supplied goods
s20 short time right to reject
s23 right to repair or replacement
s24 right to price reduction or final right to reject
s31 liability cannot be excluded
s20 short time right to reject (remedies)
consumer has 30 days to reject food for any breach of an implied term. he/she can reject faulty goods. this means consumer is released from all contractual obligations, entitled to refund within 14 days of rejection and must return the goods to trader
s23 right to repair or replace (remedies)
trader must repair or replace within reasonable time and without causing significant inconvenience. when goods have been repaired/replaced consumer has 30 days to decide whether to reject the goods
s24 right to price reduction or final right to reject (remedies)
final chance to reject or seek price reduction
- price reduction - can be as much as full price of goods
- final right to reject - entitled to refund within 14 days or rejection amount of refund may be reduced based off any use customer had of goods
s31 liability cannot be excluded (remedies)
liability cannot be excluded by trader when selling goods
terms implied by contract to supply services
s49 reasonable care and skill
s51 reasonable price
s52 performing within a reasonable period of time
s49 reasonable care and skill
implied that trader will perform with reasonable care and skill
(thake v maurice)
s51 reasonable price
implied consumer will pay reasonable price for service. only applies where price has not been agreed as part of contract
s52 performance within reasonable period of time
only applies where there is no agreement as to how long the service should take
remedies for supplied services
s55 right to require repeat performance
s56 right to price reduction
s55 right to require repeat performance (remedies)
consumer can require trader to perform again at their own cost without significant convenience
s56 right to price reduction
can require trader to reduce price by amount appropriate to severity of breach, can be up to 100%
