Contractual Terms

Question 1

Test to determine if term/representation or Puff (4 factors)

Answer 1

Courts use an Objective test;
Heilbut Symons v Buckleton
1) Timing: lapse of time btwn statement and contract
2) Importance: How important is the statements truth
3) reduced to writing: not part of written contract
4) Special knowledge: 1 party is in a better position to know truth

Question 2

Warranty

Answer 2

Less important term: breach only allows Damages

Question 3

Condition

Answer 3

Most important terms of the contract; Breach allows Termination and Damages

Question 4

1 Party has a greater knowledge to know the truth of a statement

Answer 4

Can therefore either be Negligent or Innocent Misrep
Oscar Chess v Williams: W sold the car to the dealer; dealer should have known better; Innocent
Dick Bentley v Harold Smith: Dealer sold to Individual, Dealer had better knowledge; Negligence

Question 5

Greater the delay between statement and Contract

Answer 5

Greater the delay between the two the more likely it is not part of the contract
Harling v Eddy

Question 6

Incorporation by Signature

Answer 6

If you sign it, you are usually bound by it:
L’estrange v Graucob
(unless obtained by Misrep: Curtis v Chemical Cleaners)

Question 7

Incorporation by Notice (3 requirements)

Answer 7

1) Notice must be given before or at time of Contracting
Olley v Marlborough Court

2)Term must be in a document intended to have contractual effect:
Chappelton v Barry

3) Reasonable steps must have been taken to bring term to the attention of the other party
Parker v South Eastern Railway
(if onerous terms Red Hand Red Ink: Interfoto v Stiletto)

Question 8

Incorporation by Course of dealing

Answer 8

Where it is common practice to have a certain term in a certain field it is incorporated
British Crane Hire v Ipswich

Question 9

Designation (unless unreasonable results)

Answer 9

Parties may designate a term as a condition or warranty
If this designation creates Unreasonable results or trivial breaches
Schüler v Wickman

Question 10

Innominate terms

Answer 10

Introduced via Hong Kong Fir Shipping Case
Does the Breach of the clause deny P substantially the whole benefit of the Contract?
1) if it does then its treated as a condition
2) if it Doesn’t then its treated as a warranty

Question 11

Implied Terms by Custom

Answer 11

Implied based on the Parties’ Locality:

Hutton v Warren

Question 12

Implied Terms by the Court

Answer 12

Court will only apply a term if the term is implied because it is NECESSARY for Business Efficacy
The Moorcock

Question 13

Officious Bystandard Test for Implied Terms

Answer 13

Someone at your shoulder who would be the voice of implied reason making it clearly evident that the implied term is included
AG of Belize v Belize Telecom
Mediterranean salvage v Seamar Trading

Question 14

Term Implied In Law

Answer 14

Term is implied by virtue of the nature of the relationship between the two parties; somewhere between Necessity and Reasonableness
Liverpool City Council v Irwin

Question 15

Terms Implied by Statute

Answer 15

Look at the Sale of Goods Act 1979 & Supply of Goods and Services Act 1982

Question 16

Interpretation Of Contractual Clauses

Answer 16

Move toward a contextual/ordinary common sense principle of construction of contractual Terms
Investors Compensation Scheme v West
Lord Hoffman 5 Principles:
1) reasonable person having all knowledge
2) Matrix of Fact: anything affecting understanding of contractual knowledge
3) Law excludes Previous negotiations
4) Meaning of word isn’t literal but understood by context
5) Words given their natural and ordinary meaning=business common sense