Express and implied terms

Question 1

What are terms?

Answer 1

Terms of the contract are the contents and the things which both parties have agreed to, these are the obligations of the contract.

Question 2

Whats the difference between express and implied terms?

Answer 2

Express terms are those which are specifically agreed to within the contract.

Implied terms are not mentioned but its presumed they exist, they can be implied based on:

1. The facts of the case
2. Custom and trade
3. Implied by statute

Question 3

What are terms implied by the facts of the case and common law?

Answer 3

Are terms which can be implied by the bystander test and the business efficiency test.

Question 4

What is the obvious bystander test and which case was it established in?

Answer 4

When a term is so obvious that the parties don’t think it needs to be mentioned.

Shirlaw V Southern foundries-
- Decided that if a third party was with the parties at the time of the agreement and they suggested the term should be implied, the third party would agree.

Question 5

What was established in Spring V National amalgamated stevedores?

Answer 5

• If one party does not know about the term it is not implied even if the other believes it to be obvious.
• A bystander must be aware that it would be an implied term.

Question 6

What was established in Shell V Lostock garage?

Answer 6

• A term will not be implied where one party would not agree to the contract if they knew of the term.

Question 7

What was established in Egan V Static control components?

Answer 7

• Implied terms are what a reasonable person would have understood to be the intention of both parties involved in the contract.
• Confirmed that is an objective test based on the reasonable person.

Question 8

What is the business efficiency test and which case was this established in?

Answer 8

Term will be implied when:
A) Necessary for the business agreement to work
B) It is a term which ‘goes without saying’

Moorcock-

• Went into the contract presuming that he would be able to use the ship.
• Introduced the business efficiency test, said the term must be necessary to give the contract effect.

Question 9

What are terms implied by custom and trade?

Answer 9

Custom involves the way that things are always done, or things that have been historically happening.

Trade involves prior conduct and dealings which may indicate implied terms.

Question 10

What happened in the case of British crane V Ipswich plant hire?

Answer 10

• The courts implied a term into the contract as both parties were in the business of plant hire and it was known that the use of these terms was prevalent in the industry.
• Case was implied by custom.

Question 11

What happened in Hutton V Warren?

Answer 11

• Farmer had tenancy agreement terminated before the fields were harvested. Sent a bill for all the work and cost spent/ lost as this was customary in farming tendencies.
• Implied this term as it was customary in farming tendencies.
  If there is an express term that differs from custom/trade this overrides it.

Question 12

What happened in Hillas V Arcos?

Answer 12

• The contract drawn up in 1931 giving them the option to buy 100,000 lengths of timber until 1932. D argued that the contract was too vague therefore the contract should not be valid.
• Although it was vague the it was still valid as it had previously been carried out in the same way so the same terms applied.

Question 13

What is the general principle of terms implied by statute?

Answer 13

Principle of the acts is that terms are implied unless there is something to say otherwise. However parliament decided that there are rights which should not be excluded from a contract to protect consumers.

Question 14

Whats the sale of goods act 1979?

Answer 14

Applies to terms made in contracts between businesses and only applies to goods sold for money.

Question 15

What does section 13 of the sale of goods act protect and what case is it illustrated in?

Answer 15

Refers to the description of the goods.

• Beale V Taylor, advertised a car which was actually 2 cars welded together. In breach of S.13.

Question 16

What does section 14(2) of the sale of goods act protect and which case was this illustrated in?

Answer 16

Act states that all goods must be of satisfactory quality, states that they ‘must meet the standard that a reasonable person would regard as satisfactory quality, when taking into account relevant factors.’

• Barnett V Sidney marcus, if they’re made aware of the defect they cannot claim as they accepted the risk. They can only claim if not made aware of any defects and were not able to inspect the products.

Question 17

What does section 14(3) of the sale of goods act protect and which case was this illustrated in?

Answer 17

If the buyer makes the supplier aware of the use of the goods, then the seller should ensure that the goods are fit for purpose. If the purpose of the claim is not clear the claim will fail.

• Baldry V Marshall, asked his to supply him with a fast and comfortable car for touring purposes. The car supplied was not suitable for this and the defendant was liable.

Question 18

What is the sale of goods and services act 1982?

Answer 18

Applies to terms in contracts between businesses and applies to both goods and services.

Section 3 = Description of goods and services 
Section 4(2) = Satisfactory quality 
Section 4(3) = Fitness for purpose
(Same cases apply)

Question 19

What does section 13 of the sale of goods and services act and which case illustrates it?

Answer 19

The service must be carried out with reasonable care and skill, based on the standard of care expected in negligence.

• Thake V Maurice, Surgeon had not fallen below the standard of care expected even though the surgery failed.

Question 20

What does section 14 of the sale of goods and services act state?

Answer 20

Services should be carried out within a reasonable time when there is not a specified time in the contract.
What is considered reasonable is based on the facts of each case.

Question 21

What is the consumer rights act 2015?

Answer 21

Applies to contracts between businesses and consumers. The act gives the consumers rights.

Section 9 = satisfactory quality
Section 10 = fitness for purpose
Section 11 = Goods should match the description
(Same cases apply)

Question 22

What are the remedies available under the consumer rights act 2015?

Answer 22

• S.20, Is the short term right to reject and allows for a full refund within 30 days.
• S.23, Right to repair or replacement which must be done within a reasonable amount of time.
• S.24, The right to a price reduction or final rejection trader has one attempt at repair or replacement and then the customer can either have a price reduction or final rejection.
• S.55, If service is inadequate consumer has right to repeat performance and under S.56 right to price reduction.