Terms Flashcards
Express terms
are statements made by the parties, by which they intend to be bound. A
contract can have terms agreed in writing, or agreed orally, or a mixture of the two.
Implied terms
not formed by statements made by the parties - they have not been agreed upon, orally or in writing. Nonetheless, the law deems that they exist.
three groups of negotiation statements
a) mere puff (no legal significance)
b) representations (statements of fact or law which the parties do not intend to be binding)
c) terms of the contract (statement of fact which the parties intend to be binding)
How do you decide if a statement was a representation or a term (or both)?
the court will apply an objective test based on ‘what would a reasonable person understand to be the intention of the parties, having regard to all the circumstances?’
Things to take into account - did the parties intend the statement to be binding?
- importance of the statement
- timing of the statement
- reduction of the contract into writing
- special knowledge or the skill of the person making the statement
- assumption of responsibility
if YES = TERM
if NO = representation or mere puff
why is the time of the making of the statement important?
- if the statement was made at the time of contracting, it is more likely to be a term/ if there is a delay, then it is less likely to be treated as a term.
what happens if a term of a contract is not fulfilled as required or at all?
the innocent party can sue for breach of contract
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 a course of dealing
Meaning of incorporation by notice
one party notifying the other party of the 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 happens where a clause has been brought to the notice of the other party during previous dealings?
it may be implied into the current transaction to give effect to the presumed intentions of the parties
Other ways in which terms can be agreed?
conversation or an email
what is an ‘entire agreement’ clause in a written agreement
helps rule out the possibility of there being representations or terms agreed orally which form part of a contract
2 factors of implied terms
terms implied in facts
terms implied in law
Terms implied in fact
In order to discover the unexpressed intention of the parties, the courts may take notice of trade customs and the need to give ‘business efficacy’ to a contract
