General Terms Flashcards
Introduce general terms of a contract.
- Terms of contract define obligations of each party to contract- makes it clear what each party’s agreed to.
- Expressed: specifically agreed + stated between parties.
- Implied: implied in contract- haven’t mentioned them but expect them.
Explain expressed terms of a contract- is statement a mere representation or term of contract?
Courts consider 4 points when deciding if what is said is a term or a mere representation.
1) Importance Attached To Representation: (usually use)
* Couchman v Hill: where statement is obviously important to contract, will be seen as term of contract.
2) Special Knowledge / Skill Of Person Making Statement: (usually use)
* Oscar Chess, + Harold Smith Motors: 2 contrasting cases showing importance of skill expected of person making a statement. Private seller of car isn’t expected to have same level of understanding about cars as car dealer- can change courts opinion as to if person has a skill it can be a term rather than a mere representation.
3) Time Lag Between Making Statement + Making Contract: (not always applicable - usually 5 marker)
* Routledge v Mackay: where contracts made some time after negotiations + doesn’t refer to statement made during negotiations, likely statement doesn’t become a term.
4) Whether There’s A Written Contract:
* Routledge v Mackay: courts presume everything that parties want to include as a term is put in written contract.
Then decided if statements likely a term / representation.
Explain implied terms of a contract - terms implied by common law.
Over the years, courts have created tests + rules to give parties to a contract additional terms that can be implied into contracts.
Business Efficacy + Officious Bystander Test: (always use)
2 part test.
1) Business Efficacy:
* The Moorcock: is term necessary to make contract effective?
2) Officious Bystander Test:
* Shirlaw: would parties have agreed that suggested term was obviously going to be in contract? Bystander must say ‘Oh, of course!’
* Rambler Motors: failure to sign document on one occasion didn’t prevent terms being present in contract if merely an oversight.
* Egan v Static Control Components: genuinely implied terms are what a reasonable person would’ve understood to be intention for both parties in context on contract.
* M&s v BNP: term will only be implied where it satisfies the test of business necessity or its so obvious it goes without saying.
Terms Implied By Custom: (not always applicable)
* Something that just happens- common practices over long period of time allows implied terms.
* Hutton v Warren: terms of contract must be viewed in light of custom.
Terms Implied By Prior Dealings With Parties: (not always applicable)
* Had contract with party before / done something repeatedly.
* Hillas v Arcos: terms can be implied by prior dealings.
Explain how the courts will decide the type of term.
Contract can have range of terms, type of each individual term depends on evidence.
Condition:
* Spiers + Pond: Term so important that failure to perform would destroy main purpose of contract.
* Repudiation- ending of contract.
* Rescission- equitable remedy- place parties back in pre-contractual position. Made at discretion of judge.
Warranty:
* Minor term of contract.
* Only damages can be claimed for breach of warranty- purpose of contract can still continue to be performed despite breach.
* Bettini v Gye: no right of injured party to repudiate (end) contract.
Innominate Term:
* Not clearly condition or warranty.
* Consequence of innominate term can condition / warranty.
* If impact of breach was very serious, treated as condition, if less so, remedies available will be that of a warranty.
