Contract Law - Part 1 - Express and Implied Terms Flashcards
What are terms and what are the two types ?
The terms of a contract are what the parties to the contract have agreed on.
They can be either expressed or implied.
Express - terms that are clearly stated, specifically agreed to
Implied - terms not specifically mentioned but are presumed
What are the 3 categories of terms ?
A condition - SERIOUS, can end a contract if breached
A warranty - not as serious, won’t end contract
An innominate terms- can’t label them as either
What is the difference between representation and term ?
Representation is something that has been said but is not part of the contract
Term is statements included in the contract that the parties gave agreed to follow and are legally obliged to do so
What are the factors considered to decide if the statement is a term ?
- The importance attached to the representation
- Special knowledge or skill of person making the statement
- Any time lag between making the statement and making the contract
- Whether there is a written contract
(Importance attached to representation)
What was the POL from the case of Couchman v Hill
POL - The statement was clearly important to the purchaser of the animal and so was taken as a contract term rather than representation
(Special knowledge or skill of the person making the statement)
What was the POL in the case of Dick Bentley v Harold Smith Motors
POL - The person making the statement was a car dealer hence an expert so the purchaser can take action for breach of contract rather than misrep
(Time lag between the statement and contract)
What was the POL in the case of Routledge v Mackay
POL- Lapse of time between making statement & entering contract giving claimant the opportunity to check the statement. Furthermore, no mention of date in written agreement
(Whether there is a written contract)
As we have seen in Routledge v Mackay, the courts tend to presume that everything the parties wanted to include as a term of the contract is put in the written contract
What happened in the case of Henderson v Arthur
Earlier discussions and statements made that are then not included in a written contract are assumed to be deliberately excluded by the parties as in this case ,
a lease agreement stated that rent must be paid in advance even though previous oral agreement was that rent could be paid in arrears but this is no longer a term
What are the 3 ways in which terms may be implied
- Common law
- Custom
- Statute
(Terms implied by common law)
The courts will imply a term into a contract if the term is necessary to make sure the contract works on a business-like basis. two part test for this is :
Business Efficacy - is the term necessary to make the contract effective ?
Officious bystander - If the parties had thought about it, they would have agreed the suggested term was obviously going to be in the contract
What was the POL in the case of Schawel v Reade
POL - The courts implied the term in contract that horse would be fit for stud purposes, as it was necessary for contract to be effective
What case is the officious bystander test from and what does it state ?
it is from the case of Shirlaw v Southern Foundries Ltd
and states ‘ Any term is left to be implied and need not expressed if it something SO OBVIOUS THAT IT GOES WITHOUT SAYING’
(Terms will not be implied if parties had never agreed to them had they thought about it)
What was the POL in the case of Shell UK
POL- The argument failed as Shell would never agreed to such a term - therefore this is not an implied term.
(Terms implied by custom)
What was the POL in the case of Hutton v Warren
POL - Courts decided that the terms of the leave must be viewed in light of this custom, they must be paid for profit/loss for the year for kicking them out early
