implied terms

Question 1

3 ways

Answer 1

by the court
by custom
by statute

Question 2

terms implied by court

Answer 2

the court may imply in terms in fact or in law

Question 3

terms implied by fact

Answer 3

• a term will be implied in fact if it is obvious and necessary in order to give the contract business efficacy
• test used by courts in this case is known as the ‘officious bystander test’

Question 4

terms implied in law

Answer 4

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Question 5

customary implied terms

Answer 5

terms may also be implied into a contract by custom; in response to evidence of local custom or usage in matters that relate to the contract in question where the contract itself is silent on the matter

Question 6

statutory implied terms

Answer 6

• primarily to protect parties where there is inequality of bargaining strength [e.g. various terms implied into contracts of employment]

Question 7

J. Evans and Son v Mezario

Answer 7

LP: oral assurances or representations can override written contract termsprovided it is clear that both parties intended for those assurances to form part of the contract.

• to show that contractual terms may be evidenced partly in writing, partly orally and partly by conduct
  (incorporation of terms)

Question 8

L’Estrange v Graucob

Answer 8

LP: a person is bound by the terms of a contract they sign, even if they have not read or understood those terms emphasizes the importance of reading a contract before signing it.

• to show that a party is generally bound by the terms of a signed agreement, even if they have not read it
  (incorporation of terms + exclusion clauses)

Question 9

Bannerman v White

Answer 9

LP: pre-contractual statement will be treated as a term of the contract if it is clear that the statement was fundamental to the decision to enter into the contract.

highlights the importance of intent and reliance in determining whether a statement becomes a contractual term.

• the more important a pre-contractual statement, the more likely it is to be considered a term of the contract
  (incorporation of terms)

Question 10

Dick Bentley Productions v Harold Smith (motors)

Answer 10

LP: *is that when a seller makes a statement relying on their expert knowledge or skill, that statement is likely to be treated as a term of the contract, not just a casual remark. If the statement turns out to be false, the buyer can claim for breach of contract or misrepresentation.

• to establish that pre-contractual statements made by parties with specialist knowledge can be considered terms of the contract
  (incorporation of terms)

Question 11

Routledge v McKay

Answer 11

LP: timing and reliance are key factors in determining whether a statement made during negotiations becomes a term of the contract or remains a mere representation

• considerable lapse of time between a pre-contractual statement and formation of the contract; likely to be representation, not a term
  (incorporation of terms)

Question 12

Poussard v Spiers

Answer 12

to illustrate that breach of condition permits repudiation and termination of the contract
(warranties and incorporation of terms)

Question 13

Bettini v Gye

Answer 13

to show that breach of a warranty gives rise to an action in damages only and not repudiation
(conditions and innominate terms)

Question 14

HK F shipping v Kawasaki

Answer 14

to show that the remedy for breach of an innominate term is decided once the effects of the breach are known
(conditions and warranties)

Question 15

the moorcock

Answer 15

to illustrate contractual terms may be implied by fact at common law
(officious bystanders)

Question 16

Liverpool city council v Irwin

Answer 16

to illustrate that contractual terms may be implied by law at common law
(implied terms)