PE: Formalities + Contract Terms

Question 1

impact of formalities

Answer 1

• no formalities needed; only agreement to create legal intentions, certainty + capacity
• law moves away from this baseline

Formalities are required for certain kinds of contract,
eg guarantees, contracts involving property in land
2. Conversely, where a deed is used to embody a promise,
there is no need for consideration

Question 2

deed

Answer 2

by Law Property (Miscellaneous Provisions)Act 1989, s 1, a deed must ->
“clear on its face that it is intended to be a deed”
“validly executed as a deed”
-> signed by marker in presence of a witness
-> delivered as a deed

Question 3

formality requirements

Answer 3

Evidentiary – creating a record of what was said,
reducing the potential for misunderstandings/disputes
2. Cautionary – prompting individuals to reflect on what
they are about to (quite literally, where a signature is
required) “sign up” to
3. Channelling – formalities, especially deeds, provide
“channels for the legally effective expression of
intention”, i.e. allow the parties to signal which
transactions are intended to be legally enforceable and
which are not

Question 4

formalities and enforcement of promises generally

Answer 4

Cobbe v Yeomans Row

Question 5

term

Answer 5

A contractual term is an undertaking to do something (ie
a promise), or an undertaking that some fact is the case

Question 6

term: 2

Answer 6

Not everything said by the parties while concluding a
contract will necessarily form part of the contract’s terms.
It must be determined if the relevant assurance, or piece of
writing, was incorporated into the contract.

Question 7

if not a term ->

Answer 7

It may still be an (actionable)
misrepresentation, which will trigger
certain remedies (later Lectures)
* It may have no legal effect at all, being:
o Mere puff (eg a statement that land
is “fertile and improvable”, per
Dimmock v Hallett – cf. Carlill v
Carbolic Smoke Ball)
o A mere statement of opinion: Bisset
v Wilkinson (suggestion that untried
land could carry 2000 sheep)

Question 8

what makes it a term?

Answer 8

The test is whether the “parties intended the affirmation to
form part of the contract”: Heilbut Symons v Buckleton
It may (?) help to ask how the speaker would have
reacted if asked to vouch for the truth of the statement.
Eg, in Oscar Chess Ltd v Williams, it was suggested that
if S had been asked to warrant that the car was a certain
model “he would at once have said “I cannot do that. I
have only the log-book to go by, the same as you.”

Question 9

factors affecting whether a statement is a term

Answer 9

The importance to the listener: contrast Bannerman v
White (C had said he would not buy if hops were
treated with sulphur  D’s assurance a term) and
Heilbut (C did not seem to rely on D’s words as he
asked for a prospectus  D’s assurance not a term)
* Whether the person making
the statement would be
expected to have knowledge
of the matter: Oscar Chess v
Williams

Question 10

incorporation of written terms

Answer 10

signature, notice + course of dealing

Question 11

signed terms

Answer 11

Where a contract document is signed, then, in the
absence of fraud, misrepresentation, duress (etc), the
signatory is bound regardless of whether they read the
document or not:
-> rule doesn’t apply where a term is misrepresented

Question 12

criticism of the signature rule

Answer 12

Unrealistic (“make believe”, per Lord Devlin) to
suppose that signature signals genuine consent:
written documents “not meant to be read”
* Inconsistent with the general, objective test of
intention?
* Not followed in Ontario (Clendinning)
* Unrealistic to think use of unfair terms will be
punished by the market (cf Bramwell LJ’s view that
“dealing would soon be stopped” with such
businesses)?

Question 13

defending signature rule

Answer 13

Inconvenient if every contract had to be individually
negotiated
* The unfairness of standard terms can be addressed by
more targeted legislative control (UCTA, CRA)

Question 14

incorporation by notice

Answer 14

An unsigned term will be incorporated only if:
* notice is given at or before the contract is formed;
* notice is adequate, ie the party proffering the terms
needs to have done enough to bring them to the
attention of the other party.

Question 15

timing of notice

Answer 15

notice came too late in both:
Chapelton v Barry UDC (contract
concluded when deckchair taken
by customer)
* Thornton v Shoe Lane Parking
(contract formed when customer
was “committed” by putting money
in machine)

Question 16

prominence of notice

Answer 16

terms in a notice will be incorporated if the notice is sufficiently prominent - Parker v SE Railway

Question 17

incorporation by reference

Answer 17

Terms can be incorporated by reference to an
entirely separate document which the other party
may have to request or seek out.
In O’Brien v MGN Ltd, a game with a newspaper
was stated to be subject to the proviso “Normal
Mirror Group rules apply”; the rules were printed in
other editions of the paper.
 Held: this was “just enough” to bring the rules to
the claimant’s attention

Question 18

onerous or unusual terms

Answer 18

A clause charging a borrower from a photographic library
a fee of £5/per day per item (Interfoto Picture Library)
* A clause making subpostmasters liable for all losses to
cash and stock even for reasons outside their control
(Bates v Post Office)

Question 19

incorporation through previous dealing/custom

Answer 19

In Henry Kendall, in over 100 previous contracts, S
sent B a note containing S’s terms. Held S’s
terms were incorporated into a subsequent oral
contract
* However, agreeing to term on 3-4 occasions in 5
years was held not to be sufficiently regular to be a
course of dealing in Hollier v Rambler Motors