Contents of a contract/Contractual terms

Question 1

Express terms

Answer 1

Express terms determines objective intentions

Laffoy J summarised the position in UPM v BWG as intention is gathered from the language they have used considered in light of the circumstances and the object of the contract. The court should adopt an objective test to determine what would have been the intention of the reasonable person in the shoes of the parties.

Question 2

what is the time for determining intentions in the contract

Answer 2

The time for determining their intentions in the contract is the date of agreement

Question 3

describe old rule - textualism

Answer 3

Cons
LAC Minerals v Chevron
when the meaning of the words is clear, won’t go beyond them. This can lead to absurdity so court have moved away from it towards contextualism

Pros
Havelock notes that textualism can save costs and delays. to look for intended meanings creates the danger the court will shift away from stated intention. Also means less litigation.

Question 4

what is the difference between express terms and implied terms?

Answer 4

Express terms are those which are explicitly agreed by the parties; implied are those which are either implicitly agreed by the parties or which the policy of the law implies into a contract regardless of the intention of the parties

Question 5

what factors did mcdermott consider relevant when determining whether a statement is a representation or a warranty?

Answer 5

1. At what stage was the statement made? - the closer the statement is made to the actual completion of the contract, the more likely it would be deemed a term
2. if contract is later reduced to writing and statement was omitted, then it is more likely to be a representation
3. if the person making the statement has some special skill, then it is more likely to be a warranty.
4. The more important the statement is to the completion of the contract. Then it is more likely to be a warranty.
5. If there is an indication from the maker that the statement can be relied upon and need not to be verified then it is an indication that the statement is a warranty

Question 6

what are the facts of the case mcGuiness v Hunter

Answer 6

the defendant owed a horse and during the negotiations for the sale of the horse told the plaintiff, the “… horse is alright”. The plaintiff bought the horse, which died soon after. The plaintiff argues that the words “is alright” was a promissory statement. It was held that the statement was a warranty and therefore part of the contract and for the breach the plaintiff was entitled to damages

Question 7

Warranty

Answer 7

Statements that are made with the intention that they would form an express term of the contract. To breach this leads to claim of breach of contract.

Question 8

Representation

Answer 8

Statements that are intended to induce the party into the contract, but are not intended to form part of the contract. This can ground a claim in Misrep.

Question 9

Sales Puff

Answer 9

Statements that are not intended to make up part of the contract/have any legal effect & are considered
part of the sales process. These do not create a legal obligation.

Question 10

what are the facts of Hummingbird Motors v. Hobbs?

Answer 10

Def. purchased car at auction and sold it on to pl. He said that the mileage was correct to the best of his knowledge.
However it had been tampered with previously. He was not an expert in the car’s history and did not know it was false. It was thus not a warranty.

Question 11

what is the distinction between conditions and warranties?

Answer 11

The distinction between the two lies in the remedy for breach.
If there is a breach of condition then the remedy will entitle the innocent party to damages and/or repudiation of the contract.

If there is a breach of warranty then the remedy lies in the damages only

Question 12

what are the ways in which terms can be categorised as a condition or warranty ?

Answer 12

(1) Categorisation by statue or precedent
(2) Express Designation in the contract
(3) Implied designation in the contract.

Question 13

what did mcdermott argue is the problem with categorisation into conditions or warranties?

Answer 13

the problem with categorisation into conditions or warranties is that it is a gross simplification. Many contractual terms cannot be easily categorised as being either important or unimportant. some terms are capable or being breached in a wide variety of ways and with varying degrees of seriousness

Question 14

innominate term

Answer 14

when a breach of an innominate term occurs, the legal consequences of the breach depend on whether the breach deprived the injury party of substantially all the benefit which it was intended s/he would derive from the contract

Question 15

Terms Implied as a matter of fact

Answer 15

Done on the basis of the presumed but unexpressed intentions of the parties. SO judge must interpret the contract in a manner in a way that the parties must have intended, but failed to do so.

Question 16

Terms implied by custom

Answer 16

the custom and practice test: did a particular custom exist within a particular field on business so that any contract made in that field would be assumed to incorporate that custom

Question 17

Officious bystander test

Answer 17

The term is so obvious that the parties could not have intended that it will not imply, to the officious bystander.

Question 18

Business efficacy test

Answer 18

Makes the contract workable

Question 19

explain the facts of the The Moorock case

Answer 19

Pl. had a boat and moored it with the def. There as no express agreement it would be safe, but it was implied.
What the law does to effect by implying a term is to give business efficacy to the transaction as must have been
intended by both parties who are business men.

Question 20

In Meridian Communications v. Eircell ltd , O’Higgins C.J summarised the principles that govern the identification of an implied term in an agreement as follows

Answer 20

1. It must be necessary to imply, not just reasonable;
2. Term must be necessary to give business efficacy
3. It must be a term which other parties intended ie presumed common intention.
4. Ct will approach implied terms with caution
5. There is a presumption against implying a term and the more precise the contract is, the stronger this
   presumption;
6. If the term sought to be implied can’t be stated with reasonable precision, won’t be implied.

Question 21

what was held in the case of Shirlaw v. Southern Franchises

Answer 21

Officious bystander test applies where a term is so obvious that were they to ask about it, they would say yes of course.

Enright notes that the focus is on the parties assumed answer to the question – not 3rd parties view.

Question 22

what are the facts of kavanagh v Gilbert?

Answer 22

here an auctioneer refused to sign a memorandum of agreement after the sale of land, making the sale unenforceable having regard to the statue of frauds.

The issue presented was whether there was an implied obligation in the contract engaging the auctioneer that he would take such steps as were necessary to enable any sale to be enforced. Clearly, any third party would accept that such an obligation existed, and it was held that the term should be implied into the contract

Question 23

the officious bystander test laid out in BP refinery (westenport) pty limited v shire of hastings

Answer 23

Lord simon in the privy Council refined the officious bystander test and suggested there were five requirements which had to be satisfied by the proposed implied term:

(a) it does not conflict with any express term
(b) it is necessary to give the contract business efficacy
(c) it is so obvious that it must have gone without saying
(d) it is reasonable
(e) it is capable of clear expression

Question 24

what are the facts of Flynn v. Breccia

Answer 24

Pl. argued that the def breached an implied term to act in good faith – such a term was not necessary to give
business efficacy, nor was it so obvious as goes without saying. It was a commercial agreement & cant imply it
here.

Question 25

what was held in the case of AG for Belize v. Belize Telecom

Answer 25

Before a ct. can imply a term, must look at express term to allow it to know what term should be implied. The ct.
has no power to improve the contract – only to discover what the intention is.

Question 26

describe the factual matrix approach - contextualism

Answer 26

The factual matrix approach examines the words used in the contract and suggests that those words are to be interpreted in a manner which is not divorced from the surrounding circumstances of the contract.

Under this approach, the words cannot be interpreted without taking into account the context or background of the contract

Question 27

what is the parol evidence rule

Answer 27

A rule of evidence designed to deal with the problems arising from attempts to introduce testimony about the terms agreed upon where the parties have subsequently executed a written document setting out their contract

Question 28

what are the exceptions to the parol evidence rule

Answer 28

1. Where the written document is not the entire contract
2. Validity
3. Implied Terms
4. Evidence as to the parties
5. Aid to interpretation
6. To prove a custom
7. To establish consideration
8. Rectification

Question 29

what are the facts of Clayton Love v. B& I Stempackets ( Where the written document is not the entire contract)

Answer 29

A written contracted provided that fish would be transported from Dublin to Liverpool, on the phone def. promised
that it would be refrigerated, but wasn’t. Breach of contract as phone call was part of agreement.

Question 30

Validity

Answer 30

It can be used to show validity of consideration, intention or mistake/misrep.

Question 31

Evidence as to the parties

Answer 31

extrinsic evidence may be introduced to identity tee parties or what capacity they entered into the contract

Question 32

What are the facts of Revenue v Moroney? (aid to interpretation)

Answer 32

The SC admitted parol evidence tending to prove that what appeared to be a sale was in fact intended by the parties to the contract to be a gift.

Question 33

To establish consideration

Answer 33

where contract is silent this can be done. Revenue Commissioner v. Mooney – this was used to show it wasn’t a gift but valid consideration.

Question 34

rectification

Answer 34

A written document which attempts to record an oral agreement may fail to do so accurately. where a mistake occurs in the recording or an oral agreement, the mistake may be corrected by claiming the equitable remedy of rectification.