Contract Terms Flashcards
What is a term?
-A term is an undertaking to do something (promise) or an undertaking that some fact is the case.
-The form of words does not matter so the parties do not need to say, ‘I promise that’.
-Not everything that is said by the parties will necessarily form a term. It must be determined that it has been incorporated into the contract.
What was held in the case of Helibut v Buckleton?
It was not a term in the contract that the company was a rubber company. It was a casual conversation, and the C didn’t directly ask whether it was accurately described as a rubber company.
What happens if the statement is not a term? + cases
-It may be a misrepresentation so there will be certain remedies
-May have no legal effect at all - Carlill v Carbolic
-May also be a statement of opinion - Bisset v Wilkinson
What are two factors that affect if a statement is a term? + cases
- The importance attached to the statement, if it was relied upon by the claimant then it will be seen as a term - Couchman v Hill, Bannerman v White
- Whether the person making the statement would be expected to have knowledge of the matter if so then it will be seen as a term - Bentley v Harold Smith Motors (No specialist knowledge then not a term - Oscar v Chess Williams
What are the 3 ways written terms can be incorporated into a contract?
- Signature
- Notice
- Course of previous dealings
Describe signature + case
Where a party has signed an agreement then they are bound by the terms in that agreement and it is not possible for them to say the terms are not binding, however this does not apply when the terms are misrepresented - L’Estrange v Graucob
Criticism of the signature rule
-Unrealistic as the signature signals genuine consent when written documents are “not meant to be read”
-Inconsistent general, objective test of intention
-Unrealistic to think use of unfair terms will be punished by the market
Defending the signature rule
-Inconvenient if every contract had to be individually negotiated thats why a signed contract is better
-Unfairness of standard terms can be addressed by more targeted legislative control (UCTA)
Describe notice + cases
An unsigned term will only be incorporated if:
-notice is given at or before the contract is formed;
-notice is adequate
What cases support the timing of the notice?
-Chapleton v Barry (contract already concluded, so notice was too late)
-Thorton v Shoe Lane
What did the case of Parker v SE Railway state?
Terms in a notice will be incorporated if the notice is sufficiently prominent and tickets are contractual documents so terms are incorporated on them
What does incorporation by reference mean? + case
Terms can be incorporated by reference to an entirely separate document which the other party may have to request or seek out - O’brien v MGN (just enough to bring the rules to the claimants attention)
Describe unusual terms + case
-Interfoto v Stilleto - unusual terms must be brought to the other sides attention before contract is signed
-Bates v Post Office - A clause making sub postmasters liable for all losses to cash and stock even for reasons outside their control
