Incorporation

Question 1

What is a pre-contractual statement?

Answer 1

Any verbal/ written statements made before the official contract is made. It is important to decide if such statements have been incorporated into the contract as terms. If they have, there may be a claim for breach of contract if the term is not lived up to. If a statement has not been incorporated as a term, it is simply a representation.

Question 2

What are terms?

Answer 2

Details of what has been agreed between the two parties. Some contracts will be in writing (particularly commercial/ business contracts where it is important to know exactly what has been agreed) but others are purely verbal with no written terms (many consumer contracts). The problem with verbal contracts is there is little evidence of agreed terms.

Question 3

What factors will the court consider to determine if pre-contractual statements have been incorporated?

Answer 3

-Did the representee place particular importance on the statement?
-Did the representor have special knowledge (expert opinions)?
-Timing
-Signing a written document/ contract
-Non-contractual documents/ unsigned written information
-Regular course of dealings

Question 4

Which case is an example of the representee placing particular importance on the statement?

Answer 4

Birch v Paramount Estates. Birch clearly considered the statement important as he agreed to buy the house then and there without seeing the other house first. The statement was one of the main reasons he agreed.

Question 5

Which case is an example of the representee not placing particular importance on the statement?

Answer 5

Routledge v McKay. The buyer had to think about the purchase for a week and didn’t care enough to put the date in the contract, the date was not so important that it compelled him to buy it.

Question 6

Which case is an example of the representor having special knowledge?

Answer 6

Dick Bentley v Harold Smith- the seller was a car dealer so should know details about the car. It is reasonable to rely on an expert’s opinion.

Question 7

Which case is an example of the representor not having special knowledge?

Answer 7

Oscar Chess v Williams- seller was a private seller so wouldn’t necessarily know the exact model of the car. It is not reasonable to rely on a non-expert’s opinion.

Question 8

Which case is an example where timing meant the statement was incorporated?

Answer 8

In Birch v Paramount Estates, C decided to buy the house soon after the statement was made, showing how important it was to him.

Question 9

Which case is an example where timing meant the statement was not incorporated?

Answer 9

In Routledge v McKay, the buyer had to think about the purchase for a week and did not care to put the date in the contract; the date was not so important that it compelled him to buy it.

Question 10

What does the law assume if verbal statements are not included in a written contract?

Answer 10

It was not the intention of the parties for the statement to be a term of the contract- Routledge v McKay.

Question 11

What is the rule about when something is written into the contract and it is signed?

Answer 11

L’Estrange v Graucob- if something is written into the contract and signed, this is incorporated even if it is not read or understood.

Question 12

What is the exception to the rule on signed written contracts relating to unusual or onerous terms?

Answer 12

Interfoto v Stiletto- unusual or onerous terms may not be incorporated without specific attention being drawn to them.

Question 13

What is the exception to the rule on signed written contracts relating to additional non-contractual documents?

Answer 13

Grogan v Robin Meredith- the rule from L’Estrange only applies to contractual documents. Signing a non-contractual document will not automatically incorporate those pre-contractual statements.

Question 14

What is the exception to the rule on signed written contracts relating to oral statements?

Answer 14

Curtis v Chemical Cleaning and Dyeing- if an oral statement is made about something in the signed contract, the oral statement is more binding than the written statement.

Question 15

When can non-contractual/ unsigned written information like tickets or notices be incorporated?

Answer 15

Any information outside of signed documents is tested on how clear that information would be when making the contract.

Question 16

Which case is an example of unsigned written information not being incorporated?

Answer 16

Chapelton v Barry UDC- the notice didn’t mention the exclusion clause, nor did the front of the ticket suggest there was anything on the back so the exclusion clause was not part of the contract as it wasn’t clear enough.

Question 17

Which case is an example of unsigned written information being incorporated?

Answer 17

Parker v SE Railway- SE has taken reasonable steps to inform Parker of the exclusion both on the notice and the ticket so he should have known about it. Therefore the exclusion could be incorporated.

Question 18

Which case is another example of non-contractual documents being incorporated (the one about the newspaper)?

Answer 18

O’Brien v MGN- the newspaper had done enough and taken reasonable steps to let readers know there were rules and that they could find these out (either by seeing older newspapers or going to their offices).

Question 19

Which case is an example of unsigned written information not being incorporated due to the location of it?

Answer 19

Thornton v Shoe Lane Parking- Lord Denning said the more onerous the exclusion, the clearer it must be. As the sign tried to exclude liability for personal injury this meant it must be very clear. The terms were only displayed on a pillar inside the car park and could only be seen after the contract had been made therefore, it couldn’t be incorporated as terms of the contract.

Question 20

In which case was it decided that the dealings were not frequent enough to incorporate the exclusion clause?

Answer 20

Hollier v Rambler Motors- 3/4 times in 5 years is not frequent enough to establish a ‘course of dealings’. Therefore, it was unlikely Hollier knew about the exclusion. Additionally, if the exclusion is vague, it should be interpreted against the person making the exclusion.

Question 21

In which case were the dealings frequent enough to establish a regular course of dealings?

Answer 21

Spurling v Bradshaw- the parties had frequent enough contracts to establish a regular course of dealings and it was very likely Bradshaw knew of the exclusion. Exclusions are more likely to be incorporated commercial cases because of the equality of bargaining power.