Contract terms Flashcards
What is distinguished between?
Terms, which form the contract, and
Mere representations - statements of opinion, which are unlikely to form part of the contract
What do courts have to distinguish between when parties rely upon a matter discussed before the agreement?
Whether the issue is a term or a non-contractual representation.
What do terms make?
Contractual obligations.
What do representations make?
Nothing, it is not binding, it just encourages the other party to enter the agreement.
Definition of representation?
Statements made before the contract which may or may not become one of the main terms of the contract.
What are terms?
Subject matter of the contract and bind both parties to perform them in order for the contract to be complete.
When are terms decided upon?
During negotiations or inserted into the contract. Express or implied.
If matters are written into contract what do they become?
A term of the contract.
Test to determine whether a term is included in a contract? 1
How important was the representation?
If very important, it is more likely to be made a term. Birch v Paramount
Test to determine whether a term is included in a contract? 2
A party relies on the skill of the other making the representation.
Dick Bentley v Harold Smith
Test to determine whether a term is included in a contract? 3
Was the written agreement signed?
If signed, courts assume both have read and agreed.
Test to determine whether a term is included in a contract? 4
Representation is not a term unless the parties are aware of it when making the contract.
Why do implied terms exist?
Because express terms cannot cover all eventualities and implied terms cover that.
Two ways the law implies terms into a contract?
By fact during a dispute to see what the unexpressed intentions were, or
Implied by statute, regardless of what either party may have intended.
Ways terms are incorporated into a contract through courts presumed intention of the parties:
Through custom - common practice over time.
Through common trade practices - industry specific.
To preserve business efficiency
