Contract Terms P3 Flashcards
what is a term
a promise or undertaking that becomes part of the contract itself
an obliged duty that must be carried out
a party can sue under a breach on contract
what is representation
statement made to encourage the other party to enter into contract
not part of contract but other party can sue if found to be false under misrepresentation
limited remedies
what is a statment of opinion
a boastful statment in advertising that does not form part of contract and not representation
known as ‘mere puffs’ that are not intended to be taken seriously
eg ‘redbull gives you wings’
what are the three things we look at for determing if it is either a term, representation or statement of opinion
time
special knowledge and skill
the importance of term
what is the importance of term as a way of determing a term, representation or statment of opinion
greater the importance attatched to a particular statment made by one party, more likely to be a term
the statment is so important the party would not have entered into contract without it
which case showed importance of term including a pregnant cow
Couchman V Hill (1947)
what is ‘time’ as a way of determing a term, representation or statment of opinion
significance lapse of time between statment made at formation of contract, court more likely to consider it a representation
which case showed that lapse of time making statement and entering contract gave c chance to check statment therefore making it a represntation
Roultledge V Mckay (1954)
what is ‘specialist knowledge and skill’ as a way of determing a term, representation or statement of opinion
statement made by person with greater specialist skill/ knowledge than the other is deemed a term
what did Oscar Chess V Williams (1957) show
c were experts and buys of cars, seller relied on what logbook said about the car - has no greater knowledge compared to the buyer and so buyer lost the claim
what was different in Dick Bently Poduction V Harold Smith Motors (1965) than Oscar Chess
The D were car experts and had greater specialist knowledge than buyer therefore making that statement a term
what is an expressed term
specifically agreed between the parties and are specifically detailed in the contract
either writeen down or spoken
what is an implied term
no evidence by something siad or written down
can be implied into contract through several means:
customer pactice
common law and officious bystander test
need for busness efficacy
statute- CRA 2015
what is custom and practice as a form of implied terms
just the way things are done
what is implied by common law/ officious bystander test as a form of implied terms
so obvious it goes without saying
officious bystander - when they would recognise the need for the term to be implied
which case is used for officious bystander test
Shirlaw V Southern Foundries (1939)
what is business efficacy test as a form of implied terms
would the contract make business sense without it
courts imply a term where it is necessary to do so
test for business efficacy allows a term to be implied if the business of the contract cannot be carried out without it
which case shows the test for business efficacy implied term relating to the safety of the mooring into contract in order for contract to be effective
The Moorcock (1889)
what is implied by statute as implied terms
where on party is acting in the course of a business but other is not
CRA 2015
what is a condition
a term in a contract so important that a failure to perform the obligation would destroy the main purpose of the contract
‘heart of the contract’
if the condition is broken then the person suffering the failure is entitled to edn the contract - repudiation
What is the case for a condition which involved a singer missing the opening night at 4/5 shows for singing
Poussard V Spiers and Pond (1876)
What are warranties
Minor terms of a condition
Only damages can be claimed on breach of warranty
Where main purpose of contract can continue to be performed despite breach of warranty
What is the main case for warranties where singer only missed half of rehearsal but made the performing night
Bettini V Gye (1876)
what are innominate terms
Not clearly a warranty or a condition
Innominate term turn into a condition or warranty depending on importance or otherwise of breach
What is the case for innominate terms
Hong Kong Fir Shipping Co LTD V Kawasaki Kisen Kaisha LTD (1962)
how do you decide whether a term is a condition or a warranty
‘where the innocent party was substantially deprived of the whole benefit of the contract’ = a condition
if not then it is a warranty and can only sue for damages
what did Ariel Advertising V Batchelor Peas (1938) show for innominate terms (flying banner during Dday silence and refused to pay out)
the wronged party (D) were substantially deprived of benefit of the contract and terms and was a breach of contract
which case showed the D was not substantially deprived of the benefit of the contract. Despite the labelling of the term, if it had been able to ignore it as long as he did then it is only a breach of warranty
Schuler V Wickerman Machine Tool Scale (1973)
what are all the rights within the CRA 2015 - goods
S9 - satisfactory quality
S10 - fit for purpose
S11 - as described
what is S9 - satisfactory quality from the CRA 2015
fitness for all the purpose for which similar goods are usually supplied
appearance and finish
freedom from minor defects
safety and durability
if an issue was flagged to the consumer before contract was made = no breach of S9
lower standards may be expected of cheap goods
which case showed that clothes worn close to the skin must be of satisfactory quality and fit for purpose under S9
Grant V Australian Knitting Mills
what did Rogers V Parish LTD (1997) show in its facts and ratio
Bought a range rover which had a number of defects on delivery
it was not at satisfactory quality for this premium product to be classed as so
what is s10 - fit for purpose from the CRA 2015
consumer informs the retailer of his purpose in buying the goods, the contact will imply that they are fit for that purpose
may not apply if there is evidence that the consumer did not rely on skill or judgement of trader
what case is used for s10 - fit for purpose and what did it show
Griffiths V Peter Conway (1939)
trader was not made aware of the Cs skin condition and so the product was fit for purpose for a ‘normal person’ without a skin condition and so C lost the claim
what is s11 - as described from CRA 2015
goods are descried by the trader before the contract is made the goods must be as described
only applies to contract where the trader has described the goods
on website info it applies to the main characteristics which must match the description of the goods
what are the facts of Re Moore & Landauer (1921) for s11 - as described
c asked for 3,100 tins of peaches in packs of 30. They arrived in packs of 24 but has the overall number asked for and c did not have storage room to store them
successfully sued
what are all the remedies for CRA 2015 - goods
S20 - short term right to reject
S23 - right to repair or replacement
S24 - price reduction/ final right to reject
what is s20 - short term right to reject from CRA 2015
where buyer may reject the good with 30 days and this time cannot be limited only extended
consumer must indicate the rejection clearly to the trader and they must return the item
what is s23 - right to replacement or repair from CRA 2015
consumer can insist on repair or replacement of faulty goods, all expenses paid by the trader
the replacement must be identical
one the consumer has chosen one, consumer cannot ask for other option without allowing trader reasonable amount of time
can be within 30 days
which case involved a car being whelded together by two other cars and therefore was not as described for s11
Beale V Taylor (1967)
what did Bernstein V Pamson Motors (1987) show
car was not of satisfactory quality but buyer looses right to reject goods if he accepts them - c accepted them
which case showed that whether a buyer has lost right to reject goods by leaving it too long will depend on facts of each case for s23 - right to repair or replacement
Clegg V Olle Anderson (2003)
what is s24 - price reduction/ final right to reject from CRA 2015
applies when repairs or a replacement is impossible/ wont work
can keep goods and insist on a price reduction which must reflect the difference in payed price and product received
OR
reject the goods completely and obtain a full refund - only within 6 months. If after the 6 months since buying the product a consumer will only receive a reduced price
what are all the rights under CRA 2015 - services
S49 - reasonable care and skill
S52 - performance with a reasonable time
what is S49 - reasonable care and skill form CRA 2015
focus on way in which services are carried out, not the outcome
courts will look at industry standard code of practice as well as price
what case involved a surgeon performing a vasectomy and the wife ended up getting pregnant but the performance by the surgeon was reasonable
Thake V Maurice (1986)
what is s52 - performance with a reasonable time from CRA 2015
when time of service has not been agreed in advanced, consumer has the right to have service provided within a reasonable time after offer
‘reasonable’ is a question for the courts to decide
depends on circumstance
what are all the remedies under CRA 2015 - services
s55 - repeat performance
s56 - right to price reduction
what is s55 - repeat performance from CRA 2015
trader performs the service again to the extent necessary
if demanded trader must execute performance within a reasonable time
all at trader expense
what is s56 - price reduction from CRA 2015
when trader fails to perform the contract consumer can gain a refund
available when completion by trader is impossible
OR
consumer has asked repeatedly and trader cannot do it in reasonable time without significant inconvenience for consumer
what is an exclusion clause
terms that can be incorporated in a contract that can excluse or limit liability
what are the two judicial controls for exclusion clauses
incorporation
construction
what are the three ways exclusion clauses become part of a contract through incorporation
by notice
by signature
through previous course of dealings
what is ‘by notice’ as a way of incorporating an exclusion clause into a contract
been brought to the attention of the parties before the contract was signed and finished - two ways:
document given to consumer when contract is made
displayed when and where contract was made and reasonable notice given
what did Parker V South East Railway (1877) show
must be reasonable steps to draw the exclusion clause to the consumers attention (in this case there was with it being on the back of the ticket and cloakroom door)
which case showed that contractual documents must make a distinction between itself and a simple receipt
Chapleton V Barry UDC (1940)
what did Olley V Marbourgh Courts Hotel (1949) show
incorporation is judged objectively
exclusion clause is not incorporated as brought to the attention of the consumer after the contract was made
which case showed that the exclusion clause was dotted around the car park randomly when it should have been placed at the enterence and on the machine to give enough notice
Thornton V Shoe Lane Parking (1971)
what is ‘by signature’ as a way of incorporating an exclusion clause into a contract
the party has signed the contract so is bound by all of its terms, whether they have beeen read or understood, or not
which case showed thhat an exclusion clause was valid and it was Cs failt for not reading the contract she signed to
L’Estrange V Graucob (1934) - caveat emptor
what does caveat emptor mean
buyer beware
what is ‘through previous course of dealing’ as a way of incorporating an exclusion clause into a contract
where the consumer is familiar with the business through previouss contracts
courts make a judgement whether they should have known about exclusion clause based on past dealings
what case is used for ‘through previous course of dealing’ stating that an onerous clause (new one) needs to be written in red ink to draw suffient attention to
Spurling V Bradshaw (1956)
what did Hollier V Rambler Motors (1972) show
the exclusion clause was not incorporated through previous cause of dealings as this contract was made using a different medium. Also an exlusion of liability for negligence is so onerous, attention must be drawn in all circumstances
other than incorporation, what other way can the courts control exclusion clauses
construction
what is construction of exclusion clauses
whether the clause is worded so ass to cover wwhat the business hope it does
what are the three ways to judge contruction of exclusion clauses
Contra Proferentum rule
‘main purpose’ rule
oral contracts
what is ‘contra proferentum rule’ as a judge of construction
where there is doubt about the meaning of a term in a contractc, the words will be interpreted against the party hoping to rely on them
which case is used for contra proferentum rule involving the ‘weight’ sustained by a car can also class as people
Houghten V Trafalgar Insurance Co (1954)
what is the ‘main purpose’ rule as a judge of construction
term defeats the main purpose of tthe contract, it will be struck out by the courts
which case showed that the main purpose of the contract was to deliver perishable cargo of oranges to the destination. Clause could be ignored if it precented this from happening but it had no relation
Glynn V Margetson (1893)
what is ‘oral contract’ as a judge of construction
parties make verbal or oral statements at the time contract is made, it will override any written exclusion clause
what did Evans V Andrea Merzario (1976) show
D promised c that machines would be shipped in containers stored under deck. They fell of the ship after being placed on top of the deck and tried to rely on written exclusion clause
oral statement overrode this
who, other than the judicary, can control exclusion clauses
Parliament
Through what acts can parliament control exclusion clauses
Unfair Contract Terms Act 1977
Consumer Rights Act 2015
what is s2(1) of UCTA 1977
liability in business-consumer contracts cannot excluse death or personal injury from negligence
what iss s2(2) of UCTA 1977
death or personal injury can only be exclused if it is reasonable to do so in business-business contracts
what is S3 of UCTA 1977
liability of breach of contract is only excluded when reasonable to do so - following restrictions:
How reasonable it is to exclude (smith V Eric Bush - was not reasonable to exclude as they had no knowledge in the first place)
Relative strength of parties’ bargaining power
Whether consumer knew of existance and extent of clause (George Mitchell V Finnely Lock Seeds)
what is S11 of UCTA 1977
test for reasonableness depends on:
Strength of bargaining power
Whether consumer recieved inducemtn to agree to terms
Whether consumer knew off existance and extent of terms (knowing trade practice and previous dealaings between parties)
Whether goods were manufactured, processed or adapted to special order to customer
which case showed that the clause was not reasonable under s11 UCTA 1977
George Mitchell V Finney Lock Seeds (1976)
what is s31 CRA 2015
prevents any attempt to exclude or limit any section in relation to goods
what is s57 CRA 2015
prevents any attempt to exclude or limit any sections in relation to services
what is s65 CRA 2015
confirms that a business can never exclude or limit liability for death or personal injury caused by negligence (uphold UCTA s2(1) 1977)
