Express and Implied Terms Flashcards
What is the best way to incorporate terms into a contract?
Best way to incorporate terms is for the other party to sign to them (signature = best way)
Binding in the absence of misrepresentation, even if you don’t read all the terms
What is the second best way to incorporate terms into a contract?
If signing doesn’t happen, then give reasonable notice before or at the time of the contract
What amounts to reasonable notice – factors include:
- Type of document – would you expect it to have Ts and Cs
- Notice must come before or at time of contract (quotation) and not afterwards (invoice)
- Legibility of terms
- Onerous term – need to do more than normal to draw attention to this
Remember that not acknowledging receipt of terms or the party not having read them won’t in itself prevent incorporation by notice
Consider whether reasonable efforts have been made to bring attention to the terms in question
What is the 3rd way to incorporate terms into a contract?
Last way to incorporate terms is by a previous regular and consistent course of dealing
Lots of dealings on same terms, so other party knows the Ts and Cs
What are the 3 broad ways that terms can be classified in a contract?
Conditions – important terms of the contract
- If breached, prima facie, innocent party can terminate and claim damages too
Warranties – minor terms
- Damages only as remedy, however serious the breach
Innominate terms – whole spectrum of potential breaches
- Must wait and see how serious the breach is
- If the breach substantially deprives the innocent party of all the benefit they expected to get, they may be entitled to terminate (really serious breach)
- Otherwise, damages only
In what ways can terms be implied into a contract?
Implied by custom
Implied in fact – based on presumed intention of parties, something obvious which goes without saying
Implied by law
- Implied in employment contract that an employer has a duty to provide a healthy and safe environment for the employee to work in
Implied by statute
- Sales of Goods Act 1979
What terms do s13 and s14 of the Sales of Goods Act imply into contracts? How are these terms classified?
These imply ‘conditions’ (important terms) into the contract
S13 - Implies a term that contracts for the sale of goods by description should comply with that description
S14(2) - Implies a term where goods are sold in the course of business, they should be of satisfactory quality
S14(3) - Implies a term where goods are sold in the course of business that goods should be fit for their standard purpose
- Also, if a particular purpose was made known, they should be reasonably fit for that particular purpose
What are the potential remedies if s13 and s14 SGA terms are breached?
Remedies if an implied condition is breached:
1) Innocent party can reject goods within a reasonable time and get a full refund and claim damages
2) There are bars to rejection:
- Acceptance – deemed if buyer keeps them beyond a reasonable time
- Breach is so slight that it would be unreasonable to reject
These implied conditions impose strict liability
What terms are implied into service/work contracts by the Supply of Goods and Services Act?
Primarily applies to business-to-business contracts
S13 – Implies a term that where work or service is done in the course of business, it should be carried out with reasonable care and skill
S14 – Implies a term whereby if no time for performance of the work/service has been fixed, it must be done within a reasonable time
S15 – Implies a term that if no price is fixed, then a reasonable price will be payable
- These all apply to a solicitor’s retainer with the client
- All are innominate terms, so must be a really serious breach for the contract to be terminated
What terms are implied into supply of work and materials contracts, such as a contract to supply and fit a new kitchen by the Supply of Goods and Services Act?
In addition to the terms implied in relation to service/work contracts, the same terms under the Sale of Goods Act apply to these kinds of contracts
- S3 – goods supplied by description will comply with the description
- S4(2) - goods supplied will be of satisfactory quality
- S4(5) - goods will be fit for purpose
What rights do consumers have in relation to goods under the Consumer Rights Act?
Applies to contracts between traders and consumers
Consumer rights in relation to goods – these implied terms are non-excludable rights essentially
- Goods supplied by description should match the description
- Goods supplied should be of satisfactory quality and be fit for purpose
What remedies are available for consumers for goods contracts under the Consumer Rights Act?
Remedies differ to SGA, works as a pecking order:
- Short term right to reject and get a full refund – should reject within 30 days
- If beyond 30 days, there is a right to get the goods repaired or replaced if proportionate and possible
- Outside of this, you may have a right to a price reduction or a final right to reject, but with a partial refund
If the remedies don’t fully compensate consumer, they can claim breach damages as well
What rights do consumers have in relation to work/services under the Consumer Rights Act?
Work/service should be carried out with reasonable care and skill
If no fee agreed, reasonable sum will be charged
If no time for performance has been agreed, work will be done in a reasonable time
What remedies are available for consumers for service/work contracts under the Consumer Rights Act?
Generally, consumer has a right to repeat performance or a price reduction
