Terms 1 Flashcards
How can we categorise the statements made by parties in negotiations leading up to the contract?
Mere puff
Representations - help to induce the making of the contract
Terms - Parties intend to be binding
How do we judge whether a party intended to be bound by a statement made as a term?
Court applies an objective test: “What would a reasonable person understand to be the intention of the parties, having regard to all the circumstances?”
What will the court take into account when considering whether a statement is a representation or a term?
Importance of the statement (e.g. so important would not consider entering if untrue)
Timing of the statement (more likely to be a term if made at the time of contracting)
Reduction of the contract into writing
Special knowledge or skill of the person making the statement (court will consider in favour of whoever knows less)
Assumption of responsibility / further checks (e.g. telling someone no need to examine product)
By which four methods can express terms be incorporated?
Signed written contract
Incorporation by notice
Course of dealing
Other ways of agreeing express terms
Are you bound by a contract you have signed even if you have not read it / do not understand it?
Yes
If you sign a post-contractual document e.g. receipt, is that binding?
No - much less likely to be binding
In what circumstance might a written incorporation of a term not be binding?
If the terms has been orally misrepresented
When is a term incorporated by notice?
If reasonable steps have been taken to bring them to claimant’s attention.
Give two examples of insufficient notice of a term
A clause was not referred to on the front of a ticket
A clause is illegible
What must a party do if a clause is particularly onerous?
Draw extra attention to it e.g. “red ink”
When must notice be given of a clause in a contract?
Before or at the time of contracting; not after
When are terms incorporated by a course of dealing?
When it is consistent and regular
What might be a sensible way to reduce uncertainty and confusion re terms in a contract?
Include an ‘entire agreement clause’ - making contract the only thing agreement is based upon
What are the two main ways a term is implied in a contract?
The basis of fact
By law
What are the three occasions where terms are implied in fact?
Trade or professional customs
Business efficacy
A course of dealing between parties
When would a term be implied in on grounds of ‘business efficacy’?
Only if it is so unworkable that sensible people could not have been supposed to have entered into it
How are terms interpreted by law?
At common law e.g. landlord and tenant relationship
By statute
To what contracts does the Sale of Goods Act apply?
Business to business
In SGA, how is S12: seller has the right to sell the goods classified?
Condition
In SGA, how is S13: goods correspond with description classified?
Condition
In SGA, how is S14(2): goods are of satisfactory quality defined in terms of ‘satisfactory quality’?
Objective test considering:
- Fitness for all the purposes for which goods of the kind are commonly supplied
- Appearance and finish
- Freedom from minor defects
- Safety
-Durability
In SGA, how is S14(2): goods are of a satisfactory quality classified?
Condition
What exceptions are there to S14 (2) SGA Goods must be of a satisfactory quality?
No condition if:
- Defect was drawn to the buyer’s attention before contract was made
- If buyer examines goods before contract was made
In SGA, how is S14(3): goods are fit for purpose classified?
Condition
What is the exception to S14(3): goods are fit for purpose?
If the buyer does not rely, or it is unreasonable to rely on the skill / judgement of the seller / credit broker
In SGA, how is S15: if sold by sample, the bulk will correspond with the sample classified?
Condition
What are all terms of the SGA classified as?
Conditions
What are all terms of the SGA subject to?
Section 15A: “If a breach is so slight it would be unreasonable for the buyer to reject the goods, breach will be treated as a breach of warranty”
If a breach is one only of warranty, what remedy can be claimed?
Damages alone
Under UCTA 1977, which terms of SGA cannot be excluded / restricted?
S12: Title
S13 - 15: Can only be excluded / restricted if reasonable.
