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Contract Law > Termination of a contract > Flashcards

Termination of a contract Flashcards

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1
Q

What is the difference between express and implied terms?

A

express terms -> statements made by parties by which they intend to be bound.

Implied terms -> implied by fact or law

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2
Q

What are 2 ways parties may vary a contract?

A
  1. exchange fresh consideration
  2. sign a deed which amends the terms of the contract
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3
Q

What are 4 ways express terms can be validly incorporated into a contract?

A
  1. written document signed by both parties (validly executed contract containing the terms)
  2. Reasonable notice

where terms are not in the signed written document but are elsewhere (e.g. written notice or separate document)

  1. previous course of dealing on exactly the same terms
  2. oral statements made prior to entering into the contract -> part oral, part written contract

can be express terms or representations. Use objective test to see if they are express terms.

Note that parties can use an entire agreement clause to ensure no oral statements are considered to be terms.

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4
Q

What are 3 ways implied terms can be incorporated into a contract?

A

i. facts based on business efficacy

ii. custom

iii. law

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5
Q

What is ‘imputed intention’?

A

attributing to the parties an intention which they did. not have, or at least did not express to each other. The intention is one which the. parties “must be taken” to have had.

courts can add terms based on the imputed intention of parties -> intention that a reasonable man would conclude should have been there to make the contract workable.

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6
Q

What are the 3 main statutes which incorporate implied terms into a contract?

A

Sale of Goods Act 1979

Supply of Goods and Services Act 1982

Consumer Rights Act 2015

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7
Q

When do each of the following apply:

  1. Sale of Goods Act 1979
  2. Supply of Goods and Services Act 1982
  3. Consumer Rights Act 2015
A
  1. Sale of Goods Act 1979

Business buying items from another business.

  1. Supply of Goods and Services Act 1982

Business buying a service from another.

  1. Consumer Rights Act 2015

Consumer buying goods or services from a business.

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8
Q

What are the 5 main implied terms in:

  1. Sale of Goods Act 1979

Business buying items from another business.

A
  1. title - seller has the right to sell the goods
  2. Correspondence with description
  3. satisfactory quality
  4. fitness for a particualr purpose
  5. sale by sample - bulk sale must correspond with sample
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9
Q

What are the 3 main implied terms in:

  1. Supply of Goods and Services Act 1982

Business buying a service from another.

A
  1. Service to be carried out with reasonable care and skill.
  2. Reasonable time of performance
  3. Consideration must be reasonable (reasonable price to be paid where this has not yet been fixed)
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10
Q

What are the main implied terms in:

  1. Consumer Rights Act 2015

Consumer buying goods or services from a business.

(3 for the sale of goods and 3 for the sale of services)

A

Sale of goods:

  1. satisfactory quality
  2. Fitness for a particular purpose
  3. Correspondence with description

Sale of services:

  1. reasonable care and skill
  2. Consideration must be reasonable (reasonable price to be paid where this has not yet been fixed)

3.Reasonable time of performance

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11
Q

Contract terms can be classified into which 2 categories?

A
  1. Conditions
  2. Warranties
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12
Q

Which is more important/ the ‘root’ of the contract - a warranty or a condition

A

condition

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13
Q

What does it mean for a term to be the ‘root’ of the contract

A
  • condition (rather than a warranty)
  • most important part of the contract
  • if it is breached, the contract can no longer go ahead; if it does go ahead it will be substantially different to what was originally intended by the parties.
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14
Q

What are 2 questions to ask to help determine if something is a condition rather than a warranty (forming the ‘root’ of the contract)?

A

If condition is breached:

  1. Is the other party entitled to damages; and
  2. has a “right of election”

(means that party can choose to a) repudiate the contract ending it immediately or b) affirm the contract)

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15
Q

What is a party entitled to if a contract warranty has been breached?

A

damages only

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16
Q

What is an innominate term?

A

Where is unclear whether a term is a warranty or a condition

17
Q

If there is an innominate term, what test applies?

A

Hong Kong fir tes:

“does the breach of the term deprive the innocent party of substantially the benefit of the contract”

basically: is the breach serious enough that the purpose of the contract is frustrated? if yes = condition

18
Q

If there is a breach of condition implied by the Sale of Goods Act 1979, what kind liability will the seller face?

Are there any exceptions?

A

strict liability - liability regardless of fault

Exceptions:

  1. buyer accepted the goods for a reasonable time and has taken no action
  2. s15 Sale of Goods Act 1979:
  • very slight breach in condition such that is would be unreasonable to treat the breach as a condition and reject the goods = not a breach of condition but breach of warranty
  • need to ask how serious is the breach -> if very slight, likely to only be entitled to damages
19
Q

Under the CRA 2015, consumers have 3 main rights where the goods do not conform to contract because of a breach (e.g. damaged, unsatisfactory, not fit for purpose)..

What are these 3 rights?

A
  1. reject and get a full refund (within 30 days of purchase for non-perishables and; no longer than the goods would be expected to last for perishable goods). Goods must be returned to trader. Refund must be issued within 14 days from the day the trader agrees to the refund.
  2. Have goods repaired or replaced within a reasonable time and bear costs of repair (where this option would be reasonable and proportionate)
  3. Get price reduction or partial refund

note: cascading order -> where 1 is inappropriate/ disproportionate move to 2 and then 3.

note: consumer may also be able to recover damages for loss suffered.

20
Q

Under the CRA 2015, consumers have 3 main rights with regards to paid supply of digital content. What are these?

(breach of fitness for purpose, satisfactory quality and as described)

A
  1. Repair or replacement within a reasonable time
  2. Price reduction
  3. Right to a refund within 14 days of the refund being agreed

note: consumer may also be able to recover damages for loss suffered.

21
Q

Under the CRA 2015, consumers have 2 main rights if the contract is not performed with reasonable care or skill - what are these?

A
  1. Right to repeat performance within a reasonable time; trader bears teh price
  2. Price reduction/ refund within 14 days of this being agreed
22
Q

What is an exemption clause?

A

exclude or limit liability a party has for breach of contract

23
Q

In order for an exemption clause to be valid, it must be validly incorporated.

What are the 2 conditions necessary for incorporation?

A
  1. timing - notice of exemption clause must be given at the time the contract is being formed, not after.
  2. Contractual document must be an actual contract not a receipt or advert
24
Q

In order for an exemption clause to be valid, it must be validly incorporated.

What 3 things can be done to actually incorporate the contract?

A
  1. Signature

(even if the other party doesn’t read the contract but still signs it, terms is deemed incorporated)

  1. reasonable notice

reasonable steps to bring this to the attention of the other party. If very onerous clause -> must be absolutely clear to the other party

  1. course of dealings
25
Q

What is the contra preferentem rule with regards to exemption clauses?

A

courts will read the exemption clause against the party who is seeking to enforce it (unless there are commercial parties with equal bargaining powers)

26
Q

When constructing an exemption clause, must this be clear and unambiguous?

Are there any exceptions?

A

generally yes -> must be clear and precise

exception may arise where parties have equal bargaining power -> courts more likely to be flexible and look at the meaning of the clause taken as a whole and underlying party intention -> contra preferentem rule not necessarily applied strictly

27
Q

Does UCTA apply to C2B contracts or B2B contracts?

A

B2B contracts only

28
Q

When does UCTA apply?

A

When B2B contracts are seeking to employ exemption clauses to limit liability for DEATH, PI + SoGa ss12,13,14,15 (title, correspondence with description, satisfactory quality, fitness for purpose, sale by sample)

note: does not apply for exemption of any other breach

29
Q

What is the rule in UCTA for contracts with exemption clauses covering:

Negligence causing PI or death

A

void

30
Q

What is the rule in UCTA for contracts with exemption clauses covering:

Breach of implied term as to titleq

A

void

31
Q

What is the rule in UCTA for contracts with exemption clauses covering:

SoGa ss13,14,15 (correspondence with description, satisfactory quality, fitness for purpose, sale by sample)

A

valid if reasonable

32
Q

What is the test of reasonableness under UCTA?

A
  • based on the circumstances known/ ought to have been known by the parties
  • at the time of contracting
33
Q

What reasonableness factors are provided for by Schedule 2 UCTA?

A
  1. Strength of bargaining power of parties -> more reasonable if equal in size
  2. If customer entered into the contract because of the exemption clause
  3. customer ought to have known of the extent of exemption clause
  4. is exemption dependent on a condition and is that condition reasonable?
  5. limiting liability vs excluding it completely -> look at extent of limit and whether any insurance has been taken out
34
Q

Does UCTA apply to consumer contracts

A

no

35
Q

in C2B contracts can terms implied by CRA 2015 be excluded or limited?

A

no

36
Q

Can consumer contracts (governed by CRA 2015) contain unfair terms?

A

no -> otherwise, these terms will not be binding on the consumer (contract may still be valid)

37
Q

Can consumer contracts (governed by CRA 2015) exclude liability for negligence resulting in death or PI?

A

no

Contract Law (9 decks)

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