Revision Book

Question 1

What is a representation?

Answer 1

A statement which induces a party to enter into a contract (but does not form part of it).

Question 2

What is a term?

Answer 2

A promise which becomes part of the contract itself.

Question 3

In order for the courts to determine whether things are representations or terms what do they look at?

Answer 3

If the contract is in writing (parole evidence)
If the contract is signed
The importance of the statement made
Expertise of the parties
The timing of the statement

Question 4

Why do the courts consider if the contract was in writing when determining if something is a representation or a term?

Answer 4

Where a written contract is entered into and the statement is not included it is unlikely to be a term. However they will still look at the intention of the parties in case they intended part of the contract be in writing and part oral (J Evans and Son - oral promise was incorporated into the contract).

Question 5

Why is it important if the contract has been signed?

Answer 5

The parties are considered to be in agreement with everything in it even if they have not read it (L’Estrange).

Question 6

Why do we need to consider the importance of the statement made when determining if it is a term or representation?

Answer 6

If the party would not have entered into the contract if the statement had not been made, then that statement is likely to be considered a term (Bannerman v White - hops).

Question 7

Why are specialist skills or knowledge important?

Answer 7

If the representor has the greater knowledge it is likely to be a term(Dick Bentley). If the representee has the greater knowledge it is likely to be a representation (Oscar Chess).

Question 8

Why is the timing of a statement important?

Answer 8

If there is a significant lapse in time from the statement being made to the contract being formed it is more likely to be a representation (Routledge).

Question 9

What is the parole evidence rule?

Answer 9

Where a written contract is presumed to contain everything the parties agreed, anything not included is assumed to have never been intended to be included.

Question 10

Terms which are incorporated into a contract fall into three categories. What are they?

Answer 10

Conditions
Warranties
Innominate terms

Question 11

Why is it important to classify terms?

Answer 11

For the action that can be taken if one of them are breached.

Question 12

What is a condition?

Answer 12

They are the most important terms of the contract. A breach would mean something essential to the contract had failed and it could not feasibly continue.

Question 13

What happens if you breach a condition?

Answer 13

The claimant can repudiate the contract and/or claim damages (Poussard v Spiers).

Question 14

What happens if you breach a warranty?

Answer 14

You can claim damages only, no repudiation of the contract (Bettini v Gye).

Question 15

What happens if you breach an innominate term?

Answer 15

The court considers the consequences of the breach and then decides the remedy (Hong Kong Fir Shipping).

Question 16

What is a warranty?

Answer 16

A contractual term of lesser importance than a condition. It’s breach is likely to be less fatal to the contract as a whole.

Question 17

If a term is described as a condition in the contract, does this mean that it is one?

Answer 17

No, it is the importance of the term that determines it’s classification, not the label that has been attached to it (Wickman Machine Tool Sales).

Question 18

What is an innominate term?

Answer 18

They are those whose classification is only determined once the effect of its breach is known. The courts therefore have the flexibility to determine the appropriate remedy fair to both parties (Hong Kong Fir Shipping - boat not seaworthy needing repairs, damages only).

Question 19

How can terms be implied into a contract?

Answer 19

By the court
By custom
By statute

Question 20

How can the courts imply terms into a contract?

Answer 20

They can be implied in both fact (Moorcock) and law (Liverpool City. Council).

Question 21

What is an implied term in fact?

Answer 21

Officious bystander test, they are inserted to represent the obvious, but unexpressed, wishes of the parties (The Moorcock - contract to dock and have ship unloaded, ship was grounded at the jetty at low tide and broke. Sued for damage to ship. Court held implied term it would not be damaged).

Question 22

When will a term not be implied in fact?

Answer 22

If it was deliberately omitted the courts should accept it is not implied in fact and allow the loss to lie where it falls (AG of Belize).

Question 23

What are terms implied by law?

Answer 23

They are inserted into the contract regardless of the wishes of the parties (Irwin - communal areas of block of flats in disrepair, under a legal duty as a landlord to maintain the common parts of the premises).

Question 24

What is a customary implied term?

Answer 24

Terms implied into a contract following evidence of local custom or usage in matters which relate to the contract in question, where the contract is silent on the matter (Hutton v Warren).

Question 25

What are statutory implied terms?

Answer 25

Where terms are implied into the contract by statute, primarily to protect parties where there is inequality of bargaining strength (Sale of Goods Act).

Question 26

What does s14(2) of the sale of goods act 1979 say?

Answer 26

There is an implied term that goods supplied in the course of business are of satisfactory quality.

Question 27

What is satisfactory quality with regards to the sale of goods act 1979?

Answer 27

S14(2)(a) says they will be of satisfactory quality if they meet the standard a reasonable person would regard as satisfactory taking account of description, price and other circumstances (Egan).

Question 28

What does s14(2)(b) of the sale of goods act 1979 state?

Answer 28

That the goods should be fit for purpose including appearance and finish, free from minor defects, safety and durability.

Question 29

What if defects are brought to the attention of the buyer before the contract is made?

Answer 29

S14(2)(c) of the sale of goods act 1979 states they will then not be unsatisfactory, neither will they will be if the goods were examined by the buyer before the contract was made.

Question 30

Which section of the sale of goods act 1979 deals with a buyer expressing their purpose of a product and it’s fitness for that?

Answer 30

S14(3) says if a buyer tells the seller or implies what they will use the goods for, there is an implied term that the goods will be fit for that purpose.

Question 31

What is a puff?

Answer 31

A boastful statement made in advertising.