Incorporation of terms Flashcards
What are the three components of oral or written statements
term of the contract
mere puffs
representations
what does the term of the contract create?
Obligations
What happens if the obligations of a contract is not met?
There will be a breach of contract which can be sued for
what is a mere puff
the type of things seen in adverts
give an example of a mere puff
Lynx, it obviously isn’t going to make you irre
Are mere puffs supposed to be taken seriously?
no
What is a representation?
statements of fact that are made in the course of contracting in order to induce a party into entering into the contract.
Are representations terms of the contract
no
if a representation turns out to be false what can this give rise to?
Claims of misrepresentation.
How do we distinguish between terms and representations
look at the intention of the parties
What are the 5guidelines for seeing whether intention is present
the strength of the statement
importance of statement to representee
specialist knowledge
timing of statement
reduction into writing
Which case represents the strength of the statement
Ecay v Godfrey
Give the facts of Ecay v Godfrey
Godfrey sold a boat to Ecay in the course of discussions G said that the boat was capable of going overseas but that E should have it surveyed. the boat was in poor shape. E said this was a term of the contract but G said it was a representation.
what was the decision of the court in Ecay v Godfrey
The fact he advised E to get it surveyed shows the statement was not intended to be relied upon so here the strength of the statement was not sufficient to amount to a term.
Give the facts of Bannerman v White
The parties were negotiating over the sale of hops. the buyer said he was not interested in buying hops were sulphur had been used in the treatment process. The seller told him it had not. this was false.
Give the decision in Bannerman v White
this statement was a term because of how important it was to the representee
Give the facts of Oscar Chess v Williams
W wanted to part exchange his car and believed his car was first registered in 1948 because that is what the registration book inside the car said. OC agreed the car was the 1948 model and gave him £290 to put towards the new car. it later transpired the car was a 1939 model.
Give the decision in Oscar Chess v Williams
Here this was a representation not a term of the contract because it was clear that Williams had no expert knowledge of cars.
Give the facts of Dick Bentley v Harold Smith motors
the true mileage of the car had been misrepresented to the claimant who discovered this and sued because they had paid too much for the car.
What was the decision of the court in Dick Bentley v Harold Smith Motors
The statement of the mileage of the car was a term of the contract because it was made by a car dealer who was in a position to discover the truth of that statement.
Give the facts of Routledge v McKay
the parties were negotiating over the sale of a motorcycle. the seller innocently represented the motorcycle as a 1941 model. It was actually a 1930 model. after the initial negotiations they entered into a written agreement for sale of the motorbike.
What was the decision of the court in Routledge v McKay?
it was difficult to hold that the earlier discussion of the age of the motorbike was a term because it had been discussed before the written agreement and the written agreement contained no mention of the year of manufacture/ the statement was not a term of the statement because of the time at which it was discussed.
How does Routledge relate to reduction into writing?
If a statement is written down it is more likely to be considered a term because the intention is more clear.
What are the two types of terms?
Express and implied terms
Define an express term
a term that is either said or written down
Define an implied term
Terms that the parties have not actually discussed at the time of formation of the contract but which are treated as forming part of the contract.
Give the three ways in which express terms are incorporated into a contract
Signature
Notice
Course of dealings
Give the facts of L’estrange v Graucob
The claimant did not read the document she signed
Give the general rule the courts outlined in L’estrange v Graucob
once you have signed a document you are bound by it, unless the signature was induced by fraud or misrepresentation
Give the facts of Curtis v Chemical Cleaning and Dyeing Co
C took her dress to be cleaned and was asked to sign a receipt which the clerk told her excluded the company’s liability for specific damage. in reality it excluded all liability for damage. her dress was damaged and she sued
Give the decision of the court in Curtis v Chemical cleaning co
The signature here had been obtained by misrepresentation by the clerk so was not binding and C could recover damages for the dress.
What is the rule regarding notice?
If you are given notice of the terms of the contract you can be bound by those terms even if you haven’t signed them
Give the facts of Chapelton v Barry
C wanted to rent a deck chair. next to the stack of chairs there was a notice with information on it. C paid for two chairs and received two tickets which had written on them an exclusion clause excluding the council’s liability for injury. he sat on a chair which collapsed and was injured. he sought to sue.
Give the decision of the court in Chapelton v Barry
The court said he wasn’t given sufficient notice of the exclusion clause because the document given which contained the clause was not the sort of document you would expect to contain terms of a contract.
What rule regarding notice stems from Chapelton v Barry?
The document must look like one that would be likely to set out terms between the parties.
Give the facts of Henderson v Stevenson
C bought a ticket to go on D’s steam boat. on the back of the ticket was a term seeking to exclude their liability for loss. his luggage was lost on the journey and the company said they had an exclusion clause so he couldnt claim any damages
Give the decision of the court in Henderson v Stevenson
They had not given C sufficient notice because you would not expect to find terms on the back of your ticket, there was nothing on the front saying to refer to the back
Give the facts of Olley v Marlborough court hotel
C checked in to her hotel and saw a notice on the back of her rooms door excluding liability for any loss or theft from the room. something in her room was stolen and they said they had an exclusion clause
Give the decision in Olley v Marlborough court hotel
there was not sufficient notice because the contract had already been made at the time she was notified of this clause
Give the facts of Parker v SE rly
claimant deposited articles at cloakroom of railway station. there was a fee to leave luggage and after they got a ticket containing an exclusion clause. the exclusion clause was also clearly written on the wall of the cloakroom. C’s property was lost and he sued
give the decision in Parker v SE rly
As long as there has been reasonable steps to give notice, even if you don’t read the notice you can be bound by it.
Give the facts of Thompson v LM+S Rly
The ticket said see back. the back said to see the detailed terms and conditions on their timetable (which you had to pay for) She suffered injury and sought to sue
Give the decision in Thompson v LM+S Rly
The exclusion clause had been properly incorporated, she had been told there were terms and where to find them. There was sufficient notice here
Give the facts of INterfoto v Stiletto
S ordered transparencies from I. they were delivered with a delivery note, which stated the conditions of the contract. one of which was that the transparencies had to be returned by a certain date and that for each day they were late a holding fee of £5 plus VAT would be charged per transparency. S didn’t read the note and returned them late, incurring a £3000 fine.
What did the court say in Interfoto v Stiletto
the term was not incorporated because there was not sufficient notice. where a term is particularly onerous more notice should be given and they had not.
In which three bases can terms be implied?
Terms implied in fact
terms implied in law
terms implied by custom
in which two ways can terms be implied in law?
statute
case law
What is the business efficacy test?
It asks if the term is necessary to make the contract work as the parties intended
Which case illustrates the business efficacy test?
The moorcock
What is a more modern way of saying the business efficacy test?
commercial efficacy test
What is looked at to determine whether a term is implied in fact?
The intention of the parties
Can judges imply a term to make contracts fairer?
No, they may only do so where is it necessary to do so and where both of the parties intended the term.
What does Shirlaw v Southern Foundries set out?
the officious bystanders test
what is the officious bystander test?
Asks if it was obvious that both of the parties would have agreed to this implied term if someone had suggested it to them when they were negotiating the contract.
What did Marks and Spencer plc v BNP Paribas re affirm
the traditional tests of necessity and obviousness when implying a term in fact.
What did the court approve in Marks and Spencer plc v BNP Paribas?
The conditions for implying a term set out in BP Westernport
What are the 5 conditions for implying a term in fact?
i) it must be reasonable
ii) it must be necessary to give the contract business efficacy
iii) it must be so obvious it goes without saying
iv) the implied term must be capable of clear expression
v) it must not contradict any express terms of the contract
Give a case where a term was successfully implied
Bournemouth and Boscombe fc v Manchester United fc
Give the facts of Bournemouth fc v Man U Fc
Bournemouth sold a player to Man Utd for £200,000. of that £175,000 was paid up front with £25,000 to be paid after he had scored 20 goals. soon after the player was sold by Man Utd and he had only scored 5 goals
What was the decision of the court in Bournemouth v Man Utd
Bournemouth were entitled to the £25,000 because there was an implied term that Man U would give the player reasonable time to score 20 goals. By failing to do this Man utd had breached the implied term.
Give a case where a term in fact was not successfully implied
Liverpool CC v irwin
Give the facts of Liverpool CC v Irwin
The Irwins lived in council flats in which the common areas were in bad condition. they went on rent strike in protest of the council failing to fix the common areas and the council sought to evict them. the Irwins said the council was in breach of an implied term to maintain the common areas
what did the court say in LCC v Irwin
They said the court ought not to imply a term just because it is a reasonable term, both parties must have intended itto be a term of the contract and only not expressed it because its necessity was so obvious that it was taken for granted.
Give the facts of the Moorcock
There was no express term that the jetty owners would take reasonable care to see that it was safe for the moorcock to rest upon the riverbed at low tide
What was the decision of the court in the Moorcock
The term was implied because it was necessary to make the contract work in the way that the parties intended
Into which type of contracts are terms implied in law?
All contracts of a certain type
Do terms implied in law take into account the intention of the party’s?
No the intention is irrelevant
Why will terms be implied in law?
Because such implied terms are necessary for a policy reason
Give an example of a statute which implies terms
Sale of Goods Act
What type contract does the Sale of Goods Act imply terms into?
Contracts for the sale of goods.
give an example of a term implied by the sale of goods act
the goods will correspond with their description
Which type of contract has the common law implied terms for?
Employment contracts
Which case outlined implied terms in employment contracts?
Lister v Romford
Give three examples of implied terms in employment contracts
The duty to by honest and diligent when serving the employer
the duty to give reasonable notice
the duty to take reasonable care in the performance of his/her work
What did Irwin later argue in the Liverpool v Irwin case?
They argued there should be a term implied in law to the effect that the council should take reasonable care to keep the common areas in reasonable repair
What was the decision of the court in the later argument of Irwin?
They agreed there was a definable category of contractual relationship, the implied term related to a matter not addressed in the contract, the implied term flowed from the nature of the contract and the term was necessary. so they implied a term in law.
