Terms Flashcards
What is a term?
These define the rights and obligations arising from the contract.
May be express or implied.
NOT A MERE PUFF
Different to representations - statements of fact which induce the making but are not intended to be binding
Express term - statements of fact intended to be binding
IF TERM - remedy is damages
If representation - remedy is different
Test for is it a representation or a term?
- Objective test based on situation.
- Where a statement is made during negotiation for purpose of inducing the other party to enter into the contract, prima facie grounds for inferring that the statement was intended to be binding. BUT CAN BE REBUTTED IF SHOWN IT WOULD NOT BE REASONABLE TO HOLD THEM BOUND BY IT.
- Importance of statement
- Timing
- Reduction into writing
- Special knowledge or skill
- Assumption of responsibility -where vendor expressly accepts responsibility for soundness of sale item in question. – deemed to be a term.
Incorporation of an Express terms?
A signed written contract - signature indicated intention to be bound even if not read
EXCEPTIONS - where document signed was not one intended to have any contractual effect.
Incorporation by notice - reasonable steps to bring it to parties attention, if its adverse MUST bring to attention, look at timing and the notice must be BEFORE entering into a contract
Incorporation by course of dealing
Boiler plate is a good way of getting rid of uncertainty
Implied terms?
Terms implied in fact
- Court may take notice of trade customers and need to give business efficacy to a contract.
- course of dealing
- Business efficacy - produce intended objective
terms implied in law - common law - implied by statute operate unless VALID EXEMPTION CLAUSE
What is sale of goods act 1979?
Applies to business to business.
Implied terms in sale of goods act 1979?
Implied by statute
Seller has right to sell the good s12
Correspondence with description
Satisfactory quality s14
Fitness for a particular purpose s14(3) where a buyer makes it known - UNLESS unreasonable to rely on sellers expertise
Sale by sample - Bulk corresponds to sample
Modification of remedies for breach of a condition - if breach is so slight, it would be unreasonable for buyer to reject goods, then should be treated as a warranty - and only entitle damages.
S12 – cannot be restricted
S13-15 restriction is subject to reasonableness
Supply of goods and service act?
MUST BE PROVIDED WITH REASONABLE CARE AND SKILL
- - Where one person transfers or agrees to transfer the property other than
- A contract of sale of goods
- A hire purchase agreement
- A contract under where it’s transferred in exchange for trading stamps
- A transfer made by deed for which no consideration
- A contract intended to operate as security.
- Contracts for supply of service - - Implied terms
- Care and skill – reasonable s13
- Time and performance – s14
- Consideration – pay a reasonable charge s15
Implied terms in consumer rights act 2015?
Goods and digital content
- S9 satisfactory quality
- S10 – reasonably fit for any purpose made known
- S11 – match description
Contracts for services
- Reasonable skill and care s49
- A reasonable price is to be paid s51
- The service is provided in reasonable time s52
For sale of goods – where it fails to meet s9,10,11 - its considered non-conforming – as such:
- Short term right to reject
- Right to repair or replacement
- Right to a price reduction
- Not entitled to both a price reduction and final rejection.
S42 provides any non-conforming have 2 remedial options
- Right to repair or replacement
- Right to price reduction
- Taken to anytime within 6 months
- Trader must reasonably repair within a reasonable time, right to price reduction only when trader has failed to repair or replace or consumer cannot require repair or replacement.
Contracts for services
- S54 provides that where services are non-conforming –
- Right to require repat performance
- Right to price reduction
What is a condition?
Goes to root of contract
Innocent party can treat contract as repudiated - they can terminate the contract and sue for damages immediately. If the innocent party chooses to affirm the contract, then it remains in full force and effect, so still bound but innocent party can still sue for damages with respect of breach
Sale of goods, and consumer rights act - treated as conditions UNLESS SO SLIGHT then may be treated as warranty
What is a warranty?
Warranties – if a party breach, then only remedy available is to sue for damages.
What is innominate terms?
NOT CATERGORIESD AT OUTSET
- Hong Kong case - Does the breach deprive the party of substantially the whole benefit intended if yes – then treated as a condition
- Starting position is to look at statute, the parties or previous judicial decisions.
What is an exemption clause?
A contractual term that purports to limit or exclude liability that would otherwise attach to the parties.
With commercial parties more likely to limit liability which caps it at particular sum rather than exclude fully
Test for exemption clause?
1.Is it incorporated?
2. Construction – does it cover the breach and resulting loss – given ordinary language meaning.
- Whether liability is entirely excluded or limited to a stated amount
– General rule is that exemption clauses will be constructed contra proferentem – any doubt as to the meaning and scope, the ambiguity will be resolve against the party seeking to rely on it.
3. Statutory controls
Third parties and exemption clauses?
Doctrine of privity means a party outside cannot be held to such terms.
What is UCTA’s purpose?
Applies to business to business
ONLY applies to exemption clauses.
Certain types of exemption clause have no effect and some others are only effective as they satisfy the requirements of reasonableness.
