L5: Contractual Terms & EC Flashcards
What is a term?
A statement that outlines the rights and duties of each party.
It is also the contractual obligations the parties agree to.
What is Express Terms?
It is terms that are communicated between both parties. It may be in writing, orally or combination of both.
What is Implied Terms?
It is terms that are not communicated between parties but it is understood to be present in the contract by both parties.
State the 3 ways terms can be implied:
- Implied by the courts
- Implied by statutes (written-law)
- By customs or practices commonly followed in the industry.
What is a representation?
A statement that encourages one to enter into a contract.
It is statements made during negotiation that is meant to induce or attract a party into a contract.
What is a condition?
What is a warranty?
A term that is important that it goes to the root of the contract.
A less important term.
Explain exemption clause
It is a term in the contract that seeks to exclude or limit liability of a party; in an event of a breach of contract.
If you want to rely on an exemption clause you must show 3 things:
- EC is incorporated in the contract.
- EC is not made ineffective by the common-law or statute.
- EC is clear and unambiguous.
State 3 ways EC may be part of the contract:
- By signature
- By notice in advance
- By previous course of dealing
An EC has to not be made ineffective by statutes, hence state the 2 situations under UCTA that makes an EC void:
- EC tries to avoid responsibility for death or personal injury caused by his careless conduct
- Consumer Contracts (B2C contracts)
Standard Form Contracts (contracts that are not negotiable)
EC is made ineffective under the common law when the employee…
The employee misrepresent the extent of the clause to the other party.
Explain the Contra Proferentum Rule
Even if exemption clause has been:
- Not made ineffective
- Incorporated into the contract,
The clause must still be clear and ambiguous.
If there is more than one way to interpret the exemption clause, the judge will choose the least advantageous clause for the party that is trying to protect themselves with the exemption clause.
