Contract 3: Terms Flashcards

1
Q

How can terms be included in a contract?

A

Express Terms
- expressly agreed between parties
- can be incorporated if not in writing

Implied Terms
- implied by statute, courts or custom and usage

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2
Q

What is considered when deciding if something is a term of representation?

A

courts to consider intentions of party viewed objectively (reasonable person test) taking into account:

  1. Form
    - if contract was written out why was term oral (more likely rep.)
  2. Important
    - to person who made it (would they have entered contract if it wasn’t for the statement)?
  3. Stage of Negotiation
    - if at time of contract more likely term
    - if during negotiations them rep.
  4. Specialist Knowledge
    - If seller makes a factual statement that should be within the scope of their knowledge, intending the buyer will act on that statement, more likely to viewed as term
    - Statement of belief of which they have no direct knowledge then representation
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3
Q

What are the types of terms?

A

Condition
- Term so fundamental that it is goes to the root of the contract
- If breached contract does not work

Warranty
- Term that is incidental or collateral to main terms of contract

Innominate
- Term where it is unclear at the outset whether it is a condition or warranty
- If after breach innocent party loses substantially the whole of the benefit of the contract then treated as condition

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4
Q

What is the effect of breaching different types of terms?

A

Condition
- Repudiatory breach
- Innocent party has option to terminate the contract and claim damages for loss
- Can choose to affirm it but will lose right to terminate and claim damages

Warranty
- Cannot terminate / only damages

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5
Q

What is the effect of a party not performing obligation on time?

A

Depends if time is of the essence
- must be specified; or
- presumed for commercial contracts for delivery of goods if time has been agreed

Breach
- of condition if time is of the essence
- of warranty if time is NOT of the essence

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6
Q

When will an express term for part of the contract?

A

Term will only form part of the contract (written or oral) if parties have reasonable notice of it
- Eg. Prices on a menu (incorporated)

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7
Q

What is the Parol Evidence Rule?

A

If contract is in writing presumption that external evidence cannot add to, subtract from, contradict or vary the terms

Exception
- implied terms
- collateral contracts
- court finds contract is part oral part writing

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8
Q

What is the effect of Sale of Goods Act 1979?

A

Implied terms whenever goods are sold that:
- Seller has title to goods in question
- Goods match any description applied to them by the seller
- Goods be of satisfactory quality
- Goods be fit for any particular purpose made known to the seller by the buyer

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9
Q

Are terms implied by Sale of Goods act conditions or warranties?

A
  • Typically, conditions
  • However, if breach is so slight that it would be unreasonable for buyer to reject goods, the breach is treated as breach of warranty
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10
Q

Can implied terms under Sale of Goods Act be excluded?

A
  • Cannot exclude implied term for title (has to own it duh)
  • Other implied terms can be excluded if it is reasonable
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11
Q

What is the effect of the Supply of Goods and Services Act 1982? Condition vs Warranty?

A

Implied terms for B2B and private sales for services and goods supplied in relation to the service

  • Supplier will carry out the service within reasonable time (if no time is agreed) and with reasonable care and skill (innominate)
  • Goods same as SGA
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12
Q

Can implied terms under Supply of Goods and Services Act be excluded?

A

Subject to UCTA reasonableness test

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13
Q

What are the effects of the Consumer Rights Act 2015?

A

Applies to B2C contracts

Goods
- Goods should match their description and be of satisfactory quality and fit for purpose

Services
- Services should be carries out with reasonable care and skill
- Completed in accordance with any information which the consumer relies on (eg. Price quotations)
- Completed for a reasonable price (if not price has been agreed)
- Competed within a reasonable time (in not timescale has been agreed)

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14
Q

How can CRA implied terms to excluded?

A

They can’t

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15
Q

What is the meaning of satisfactory quality in SGA?

A

Goods must be:
- fit for purpose for which such goods are generally used;
- free from minor defects;
- safe and durable.

Exception
- for defects brought to buyers attention or which would have been obvious if buyer had inspected goods

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16
Q

When might the court imply terms into contract?

A
  1. If it is necessary to give business efficacy
    - so to make contract work in way parties intended (obvious by-stander test)
  2. if there is the a industry standard
    - can be implied by custom and usage
    - unless excluded on contradicts express term
  3. through course of dealing
    - if can show it is regular and consistent
17
Q

If agreements are incomplete or terms are vague when will the court enforce contract?

A

Will get involved:
- contract provides mechanism for resolving uncertainty
- contract for future performance over a period of time and leave matter to be adjusted
- if uncertain terms can be severed
-

18
Q

If agreements are incomplete or terms are vague when will the court NOT enforce contract?

A

Not if:
- court is unable to conclude intentions of parties
- eg “agreement to agree”