terms Flashcards
What are terms?
- contents of the contract
- can be expressed or implied
What are the 3 categories of negotiation statements?
1- mere puffs
2- representations ments parties don’t intend to be binding)
3- terms (statements parties do intend to be binding
How can you decide if a statement is intended to be binding to determine if a statement is a representation or term?
Court applies objective reasonable test to see if parties intended.
- ‘What would a reasonable person understand to be the intention of the parties, having regard to all the circumstances?’
What do the courts consider to see if the statement was a term or representation?
- importance of statement
- timing of statement
- reduction of contract into writing
- special knowledge or skill of person making statement
- assumption of responsibility
if yes to the above, then statement is contract term
How does the timing of a statement determine whether it’s a term or representation?
If statement was made at time of contracting, then more likely to be a term than if it was made with delay
What are the different ways which may determine the ‘intention to be bound’ by the parties?
- a signed written contract
- incorporation by notice
- incorporation by course of dealing
- other ways of agreeing express terms
What are the 2 rules of a signed written contract?
- party can still intend to be bound by contract if signed without reading it.
- documents signed which were not intended to have any contractual effect are not binding.
What is meant by ‘incorporation by notice’ for parties to be bound?
- terms will form part of the contract if reasonable steps have been taken to bring them to claimant’s attention.
- This is logical, where reasonable steps have been taken to draw terms to party’s attention, that party’s persistence with the transaction suggests intention to be bound by terms.
When must a contract term be given notice of for it to be incorporated into a contract?
for a notice of it must be given before or at the time of contracting.
What is meant by incorporation over a course of dealing?
Contractual terms from previous dealings between parties may be implied into new contracts, for this, must be shown that the course of dealing has been consistent over a period of time.
- it must be consistent and regular
What is meant by ‘other ways of agreeing express terms’?
the terms of a contract can be arrived in many other ways, provided that the parties adequately express an intention to be bound by those terms.
What is an entire agreement clause?
provides that a particular document or set of documents constitutes the entire agreement between the
parties.
- effective in avoiding confusion about whether any oral terms or preceding written statements form part of the contract.
why may a term be implied in fact or in law?
fact= to give effect to the presumed but unexpressed intentions of the parties.
law= because courts or statute require this, regardless of the intention of the parties.
What are the three types of implied terms in fact?
1- trade or professional customs
2- business efficiency
3- course of dealing between parties
What is meant by trade or professional customs implied term?
implication is based on the assumption that it was the intention of the parties to be bound by well known customs of a particular trade
What is meant by ‘course of dealing between parties’ as an implied term?
- may be implied into agreement where parties have dealt with each other on many occasions
- term will only be implied in these circumstances where the dealings of the parties have followed a consistent and regular pattern
What is meant by business efficiency implied term?
to make the contract produce its intended objective.
- A term will only be implied on this ground if, without the implied term, the arrangement would be so unworkable that sensible people could not be supposed to have entered into it.
How may a term be implied by law?
via common law or statute
How are terms implied at common law?
To give effect to legal duties which arise, as a matter of policy, out of certain common types of contractual relationships, e.g. tenant and landlord
How are terms implied by statute, which acts?
Mostly found in of Goods Act 1979, the Consumer Rights Act 2015 and Supply of Goods and Services Act 1982.
What are the key sections of SGA?
- seller has right to sell
- corresponds with description
- satisfactory quality
- fit for purpose
- sale by sample
- ## Modification of remedies for breach of condition
What is meant by s15 Modification of remedies for breach of condition?
Although breaches of the sections mentioned in card 21 are conditions, they’re subject to s15 A.
- If breach is so slightly, breach to be treated as breach of warranty.
What are the terms implied by Supply of Goods and Services Act?
- contracts for transfer of property in goods (ownership)
- contracts for hire of goods (A owns goods, B has possession)
- contracts for supply of services
What is the meaning of ‘contracts for supply of services’ in SGSA?
implies
- care and skill= supplier’s service is carried with care and skill
- time of performance= where time is not fixed, supplier will carry out service within reasonable time
- consideration= Where consideration not determined in contract, party receiving service pays reasonable charge.
What 3 parts does category 1 of CRA cover?
1- contracts for goods
2- contracts for digital contents
3- contracts for services
What are the 3 implied terms for contracts for goods and contracts for digital contents in CRA?
1- goods should be of satisfactory quality
2- goods should be fit for any purpose consumer tells trader of
3- goods should match description
What are the 3 implied terms for contracts for services in CRA?
1- service performed with reasonable care and skill
2- reasonable price to be paid (where not already agreed)
3- service provided within reasonable time
What are the remedies for breach of contracts for goods under CRA?
- short term right to reject (30 days)
- right to repair or replace
- right to price reduction or final rejection (not available before considering repair/replace)
What are the remedies for breach of contracts for digital contents under CRA?
- right to repair / replace
- right to price reduction (refund within 14 days via same payment method)
** within period of 6 months
What is the legal position if non-compliant digital good damages device or other content?
where (a) trader supplies digital content to consumer under a contract, (b) digital content causes damage to a device or to other digital content, (c) the device or digital content that is damaged belongs to consumer, and (d) damage is of a kind that would not have occurred if trader had exercised reasonable care and skill, then the consumer is entitled to repair or to a compensatory payment.
What are the remedies for breach of contract of service under CRA?
- right to require repeat performance; and
- right to price reduction
How can warranties and conditions be distinguished?
if parties intended, at the time of contracting, that any breach of the relevant term could result in the innocent party terminating.
**if yes, then condition
Define innominate terms and name the leading case
Terms which are neither conditions or warranties.
Hong Kong shipping v Kisen 1962
How are innominate terms distinguished as a condition or warranty?
1- Does statute define this term as condition or warranty
2- What did the parties intend for term to be?
3- any previous judicial decisions determining term?
4- If non of above apply, Hong Kong test applies:
- Does the breach deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract?
**if yes, then a condition
What is the term classification of the statutory implied terms for SGA & SGSA?
SGA- s12-15 = conditions
SGSA- s13 = innominate terms
for CRA see remedies deck
Can the time taken for performance or completion breach a contract?
yes
- where time is of essence, it can amount to repudiatory breach
- where time is not of essence, can become so by innocent party serving notice.
