Express and Implied Terms Flashcards
Factors important to determine the intention of the parties regarding pre-contractual statements:
1) Importance;
2) Writing
3) Reliance on skill or knowledge;
4) Lapse of time.
Pre-contractual factor, importance:
Bannerman v White (1861)
Facts: a prospective buyer of hops had been assured that sulphur had not been used in their production. He made it clear that he would not be interested in buying them if it had. After he bought them, it turned out sulphur had been used.
Held: the buyer was entitled to reject the hops for breach of contract. The undertaking that no sulphur had been used was a ‘preliminary stipulation’. If it had not been given, the purchaser would not have bothered to inquire about the price and would not have continued to negotiate towards a contract. The statement that sulphur had been used formed part of the contractual obligations.
Pre-contractual factor, writing:
Generally no need for a contract to be in writing. If the parties have taken the trouble to commit their contract to writing, the courts will be reluctant to find that it does not contain all the terms that were important to either party. ‘Parole evidence rule’.
Evans & Son Ltd v Andrea Merzario Ltd
Facts: plaintiff had made a contract for the transport of machinery by sea, made it clear to defendant it was of great importance that it was not carried on deck, although standard form of contract said it was fine on deck. The machinery then was lost overboard.
Held: in this case the verbal assurance took precedence over written conditions.
Pre-contractual factor, reliance on skill or knowledge:
Dick Bentley Productions Ltd v Harold Smith Ltd (1965)
Facts: the plaintiff bought a car from the defendants relying on pre-contractual statements as to its mileage, which later turned out to be untrue.
Held: CoA held that the test to be applied was that if whether an intelligent bystander would reasonably infer from what was said or done that the statement was intended to be contractual (that is, detached objectivity). Applying this test, the court concluded the mileage was a term of the contract on the basis that the car dealer should be taken to have better knowledge of such matters than the plaintiff.
Pre-contractual factor, lapse of time, case:
Routledge v McKay (1954)
Facts: this concerned the sale of a motorbike. The defendant who was selling the bike had told the plaintiff the date of the bike was 1942. In fact, it dated from 1930. A week elapsed between the defendant’s statement and the making of the contract of sale. It was held by the CoA that the defendant’s statement was not a term of the contract.
Express terms, incorporation, case:
Interfoto Picture Library v Stiletto Visual Programmes (1988)
Facts: defendants were an advertising agency. Needed some photographs for a presentation, so contacted the plaintiffs who sent them a round packet of 47 photos, together with a delivery note. The photos were not used and sent back nearly a month later. Defendants later received a bill for almost £4,000 from the plaintiffs as a ‘holding charge’. Calculated in accordance with the delivery note.
Held: CoA held that the clause could not be enforced. Did so by reference to Parker v South Eastern Railway, which establishes the principle that in order to rely on an exclusion clause in an unsigned contract, the defendant had to have taken reasonable steps to bring it to the attention of the claimant. In this case it was a particularly onerous clause and had not been brought to attention.
Express terms, construction, info:
‘Parole evidence rule’ - things can’t be said and added to a written contract.
Certain established exceptions: ambiguity, written agreement incomplete, custom, starting or finishing date, other exceptions.
Implied terms, terms implied by custom, case:
British Crane and Hire Corp v Ipswich Plant Hire Ltd
Facts: concerned a contract for the hire of an earth-moving machine, together with a driver, and the issue was who was responsible for the cost of pulling it out of marshy land in which it had become stuck. One of the factors the CoA regarded as relevant was that there was evidence that it was normal practice in the trade for liability to be place on the hirer, rather than the owner.
Implied terms, terms implied by fact, case:
Crest Homes Ltd v Gloucestershire CC
Facts: a construction contract, the local planning authority unexpectedly imposed conditions that entailed additional expense and a loss of profit for the builder.
Held: CoA was not prepared, on the facts and without more, to imply a term that the defendant should bear any liability for these costs.
Implied terms, terms implied by fact, tests:
Moorcock test (1889) Facts: concerned a contract that involved the plaintiff’s ship Mooring at the defendant’s wharf in the Thames. The ship was damaged when the water level decreased. Owner sued for breach of contract because the mooring was unsuitable, but there was no express term. Held: CoA held that a term could and should be implied to the effect that the mooring was suitable. Without such a provision, the contract would not have been workable and so it was implicit that this must be what was intended.
‘Officious bystander’ test
Mackinnon LJ suggested that a term may be implied where it is so obvious that it ‘goes without saying’, so that: ‘if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in the agreement, they would testily suppress him with a common ‘oh, of course!’’
Implied terms, terms implied by law, case:
Liverpool City Council v Irwin (1977)
Facts: the contract in this case was a tenancy agreement in relation to a block of flats. The agreement said nothing about who was to be responsible for the maintenance of the common parts of the block, and, in particular, the lifts and rubbish chutes. The tenants argued that a term should be implied that the city council was responsible.
Held: the HoL held that it was possible to imply a term to the effect that the landlord should take reasonable steps to keep the common parts in repair.
