Terms Flashcards
What is a term
A promise
What is a representation
A non-promissory enticement to contract
What is a term is breached
This is a breach of contract
What is a representation is breached
This is misrepresentation
Remedies for breach of contract
Damages to put in position they would have been in if contract was fulfilled
Recovery of losses in reasonable contemplation of parties when contracting
Elect to terminate or affirm contract
Remedies for misrepresentation
Termination or damages to put in position before misrepresentation was made
Are damages or termination always Avaliable for misrepresentation
No only if fraudulent or negligent
Which losses can damages be awarded for following misrepresentation
Remoteness allows recovery of all losses regardless of foreseeability
What is mere puff
Extravagant advertising not intended to have any legal consequences
How to distinguish between a term and a representation
Objective test. Did the parties intend to be bound?
Is an oral statement more likely to be a term or a representation if a written contract makes no mention of it
Likely to be a representation. Assume that it wasn’t meant to be included
Is a statement more likely to be a term or a representation when the person to who it was made considered it so important they would not have otherwise contracted and made this clear to statement maker before statement was made?
Likely to be a term
What is the parol evidence rule
Written contract is just what is written
Why is the parol evidence rule too easy to get around
It doesn’t exclude implied terms and if there is no entire agreement clause it also doesn’t exclude oral implied terms
What does an entire agreement clause do
It excludes oral implied terms
Three ways that terms can be implied
Statute, custom, trade usage / business practice
When won’t a term be implied
When it is inconsistent with an express term
Terms implied by law
Terms implied as a matter of policy into all contracts of a particular type
Terms implied by fact
Objectively assessed unexpressed intention of parties. Necessary to make the contract work
What terms does the CRA imply into contracts
Title to sell
Correspond with description
Same quality and description as sample
Satisfactory Quality and fit for purpose when sold in course of business
Reasonable skill and care
Anything said or written about service by trader to consumer and taken into account by consumer is a term
What does satisfactory quality mean in CRA
Objective reasonable person test
Excludes defects drawn to attention of buyer or buyer ought to notice on examination and did such exam
Can liability for personal injury and death be excluded
No - CRA and UCTA
When are contract terms ineffective due to CRA
When they are unfair
What if a term in a consumer contract is unfair
Term is not binding but contract can continue without it
Does the CRA fairness requirement apply to all terms in consumer contracts
No doesn’t apply to price and main subject matter
Does the court always have to consider the fairness of terms in consumer contracts
Yes even if parties don’t raise the issue as long as the court has enough info
Test for fairness CRA
Contrary to good faith, causing a significant imbalance in the parties rights and obligations under the contract to the detriment of the consumer
What is good faith under CRA
Fair and open dealing Clearly expressed terms No concealed traps Not seeking to take advantage Plain language Average customer would be aware of the term
What is a term in a B 2 B contract is unreasonable
Excluded and rest of contract continues
Test of unreasonableness under UCTA
Term must be fair and reasonable having regard to the circumstances which were or ought to reasonably have been known or in the contemplation of the parties when the contract was made
Requirements for an exclusion clause to apply
- Incorporated as a term
- Apply to the situation on its natural and ordinary meaning
- Not be excluded by CRA or UCTA
What is a consumer
Someone acting for purposes mainly outside their business
What is a trader
Someone acting for purposes relating to business
How to incorporate an exclusion clause as a term
Signature
Reasonable notice
Consistent dealings between parties including that term
Once a doc is signed as you always bound by it even if you didn’t read it
Yes unless fraudulent or misrepresentation
How to incorporate a term through reasonable notice
Reasonable steps to give notice
Before contracting
Would reasonable person think it was a contractual doc
Is an indication of where terms can be found sufficient to incorporate them by reasonable notice
Yes
How to ensure a particularly onerous clause is incorporated into a contract
It must be fairly and reasonably brought to the attention of the party
Is an exclusion clause automatically onerous or unusual
No
When can an exemption clause be overridden
When it is inconsistent with other terms or with an undertaken given before or at the time of contracting
What is a limitation clause
A clause limiting liability to a fixed figure rather than denying all liability
What is an exclusion clause
A term denying all liability
3 ways to incorporate terms
signature, reasonable notice and consistent course of dealing
are you always bound by a contract you have signed
yes even if you haven’t read it, unless misrepresentation
when is a term incorporated by reasonable notice
reasonable notice before or at time of contracting
would RP think it is a contractual doc and expect terms
more onerous terms must be brought to attention with more effort
exemption must be legible
when is a term incorporated by consistent course of dealings
parties had lots of dealings in the past of exactly the same terms
are damages and termination always available for breach of contract
damages are available as right but termination will depend on what type of term was breached
is a term called a condition always a condition
no - just because it was called a condition doesn’t mean it is one
4 ways to imply terms into contracts
facts (needed to make contract workable),
custom (reflects customs of that trade but not if conflicting with express term)
law (law considers it necessary)
statute
implied terms for B2B contracts for sale of goods and supply of goods and services
B2B goods contracts - Sale of Goods Act 1979
B2B contracts for works/ services Sale of Goods and Services Act 1982
match description, satisfactory qualify ICB and fit for purpose (told expressly or impliedly) reasonably rely on skill/knowledge - conditions
reasonable care/skill, time, sum - innonimate terms
implied terms for B2C contracts for sale of goods and supply of goods and services
CRA 2015 49- care and skill 51- reasonable sum 52- reasonable time 11- match description 10- fit for purpose 9 - satisfactory quality
remedy for breach of s52 CRA
price reduction
remedy for breach s49 CRA or any term in contract where performance doesn’t comply with what is required
repeat performance if reasonable or price reduction
remedies for breach of s9-11 CRA
reject and full refund (30 days or as long as perishables reasonably expected to last)
repair or replacement (6 months) (no right if perishables and conformed on day of contract)
price reduction to reflect consumer use (6 months) (no right if perishables and conformed on day of contract)
2 tests to tell if an exemption clause can be relied on
incorporation of clause as a term in the contract and construction of clause (does it cover this situation)
in whose favour is any ambiguity in the construction of exclusion clause
constructed against person trying to rely on it
when does reasonableness (UCTA) apply to exemption clauses
loss or damage due to negligence (not PI or death)
breach of statutory implied terms relating to goods (description, quality and fit for purpose)n
breach of an express term contained in standard written terms of person seeking to exempt liability
factors in sch 2 UCTA to be considered during reasonableness test
strength of bargaining power of parties
inducement to contract / accept exclusion clause
chance to enter into other contract without exemption clause
whether they knew or ought to know of clause (consider previous dealings)
if exemption clause applies when condition is not complied with - was it reasonable when contracting to expect compliance would be possible
and for limitation clauses: resources D could expect to have available to meet liability if it arises e.g. insurance
what cannot be excluded from a B2C contract
cannot exclude liability for breach of s9, 10 , 11, , 49, 51 or 52 CRA
cannot make remedy hard, exclude remedy, put them at a disadvantage for pursuing remedy
cannot exclude or restrict rules of evidence or proceedure
can a third party rely on an exemption clause
not unless they are named in the exemption clause or a member of a class entitled to benefit from it then can rely on it the same as a contracting party
