Contractual Terms

Question 1

Overview contractuals terms

Answer 1

• Contracts can be concluded in writing, orally, a mixture of both
• Contracts usually involve negotiations where things are stated
• What is the status of these “things that are stated” ?
  
  • Contractual terms
  • Mere representation
• The answer depends on the circumstance, even things that were never said or written can be terms
• Distinction is of crucial importanc as it determines the availability of remedies
• Possible test:
  
  • A statement is sufficiently important that, but for this statement, an offerree would not have entered into the contract
• However there is not “magic formular” - all of the available evidence must be considered

Question 2

Criteria to be considered - Did parties intend that there should be contractual liability in respect of the accuracy of the statement ?

Case authority

Answer 2

Heilbut, Symons & Co v Buckleton (1913)

• Advice on shares

Question 3

Did the parties intend that therer should be contractual liabilty in respect of the accuracy of the statement ?

Answer 3

Heilbut, Symons & Co v Buckleton

• Advice on shares

Question 4

Did the party making the statement have special expertise ?

Answer 4

• *Oscar Chess Ltd v Williams**
• Old model car

–

• *Dick Bentley Ltd v Harold Smith Ltd**
• Age of engine

Question 5

Did the statement induce the contract ?

Answer 5

Dick Bentley Ltd v Harold Smith Ltd - Age of engine

Question 6

Criteria to be considered

• As far as the vendor knows

Answer 6

Gilchester Properties Ltd. v Gomm
- Description of house

Question 7

Statements closer to the time of agreement are more likely to be terms

Case authorities

Answer 7

Routledge v McKay

• Old motorcylce but had time to check facts

• *Vand den Escchert v Chappel**
• White ants

Question 8

Where the party has stipulated importance of term

Case authority

Answer 8

Bannerman v White
Sulfur in hops

Question 9

Terms of contract

• If statement is recorded in writing this may evidence intention of making it a term

Answer 9

Oscar Chess Ltd. v Williams

Question 10

Some statements may be terms even if the agreement suggests otherwise

Case authority

Answer 10

Couchman v Hill

• Auction of pregnant cow

Question 11

Intention to be bound by expertise of one party

Case authority

Answer 11

Dick Bentley Ltd v Harold Smith Ltd

Issue

Whether the defendant’s statement as to the quality of the vehicle could be deemed a term of contract given his expertise as a prestige car dealer.

Held

The Court found for the claimant, viewing the statement as a contractual term. They determined that as the defendant had greater expertise, as a car dealer, the claimant was reasonably entitled to rely upon a representation from them regarding the subject of their expertise.

Question 12

Express terms

• Problem is not what was said but what was meant

Case authorities

Answer 12

• *Smith v Hughes**
• New oats v old oats

–

Thake v Maurice

• Failed vasectomy

Question 13

Implied terms

• The court does not improve contract nor make it for the parties, its role is to interpret it

Case authority

Answer 13

Trollope & Colls Ltd. v North West Metropolitan Hospital Board

• Hospital construction: no implied terms to make contract more reasonable

Question 14

Implied term by fact

& test

Case authority
(business)

Answer 14

The moorcook

• > Business efficiacy test
• Ship damages in docks

Question 15

Implied terms by fact
Test

& Case authority

Answer 15

Southern Foundries Ltd v Shirlaw
- Breach of employment contract

• Officious bystander test

Question 16

Summary
Contractual Terms

Answer 16

• Contractual terms

expressed or implied

Express terms are those that partes express and intended to be bound by

• Implied terms are those that are implied into a contract
• Implied by fact, custom or statute