Terms

Question 1

Condition

Answer 1

Most important terms of a contract.

Question 2

Consequence of breaching a condition?

Answer 2

Breach is repudiatory.
Innocent party can choose to affirm or rescind the contract.

Question 3

Warranties

Answer 3

Least important contractual terms.

Question 4

Consequence of breaching a warranty?

Answer 4

Breach is regular.

Question 5

Case: when is a breach repudiatory?

Answer 5

Ark Shipping v Silverburn Shipping (2019)

Where one party has been deprived of ‘substantially the whole benefit’ of the contract.

Question 6

What are time clauses?

Answer 6

Clauses within a contract specifying the time frame that it must be completed.

Question 7

Bunge Corporation v Tradax Export (1981) estabalishes…

Answer 7

Where it is trade custom that a time clause will be incorporated into the contract, it is likely to be incorporated as a condition of the contract.

Question 8

Samarenko v Dawn Hill House (2011) established…

Answer 8

That as time was ‘of the essence’, it was a condition of the contract, so breach was repudiatory.

Question 9

What are the 3 factors to be considered in assessing whether a statement is a term or a representation?

Answer 9

1) Importance of the statement

2) Parties’ expertise

3) Assumption of responsibility for the statement’s correctness.

Question 10

L’Estrange v Graucob (1934) establishes…

Answer 10

Parol evidence rule
Written contract is presumed to be conclusive.

Question 11

Name the 2 cases that can be contrasted re a statement maker’s expert knowledge

Answer 11

Oscar Chess Ltd v Williams (1957)
vs
Dick Bentley Productions (1965)

Question 12

Oscar Chess Ltd v Williams (1957)

Answer 12

D sold car to C (car dealer), trading in old car in part-exchange. Log book of car stated was 1948 model.
Claimant buyer (car dealer) later realised car 1939 model worth less. C sued for the breach of contract.
CoA held statement indicating car’s age was a representation - D seller not expert so didn’t assume responsibility for correctness of his statement - relied on log book. Car dealers in better position to discover truth.

Question 13

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd (1965)

Answer 13

P said they were looking for a ‘well vetted’ Bentley car. D stated Bentley for sale had only done 20,000 miles since new gear box fitted.
After buying, P had issues with car and mileage was misstated (was actually 100,000 miles).
CoA held dealer’s statement was a term. Sellers were experts with more knowledge than buyer/was car dealer, so could have obtained information on the history of the car. In better position than buyer to discover this info.

Question 14

Case: importance attached to a statement?

Answer 14

Bannerman v White (1861):
Both parties knew that C would never have entered the contract if he knew the hops had been treated with sulfur, so importance attached meant term was classified as a condition, meaning breach was repudiatory.

Question 15

Gillespie Brothers & Co v Cheney, Eggar & Co (1986) establishes…

Answer 15

Where a contract looks complete, but one party claims that it is not, the courts will assess the facts to determine whether the contract is complete.

Question 16

Effect of a repudiatory breach?

Answer 16

Innocent party can choose to terminate or affirm the contract.

Question 17

Terms can be implied…

Answer 17

In fact
In law

Question 18

Case (judge) clarifying terms implied in fact vs law?

Answer 18

Shell UK Ltd v Lostock Garage Ltd (1977) - Lord Denning

Question 19

Terms implied by law must ______ (case) and _______ (case)?

Answer 19

Must belong to a ‘definable category of contractual relationship’ - Scally v Southern Health (1992)

Must not relate to a matter not dealt with in the contract - Liverpool CC v Irwin (1976)

Question 20

Implication of terms in law is a test of _____ (case)?

Answer 20

Test of NECESSITY
Liverpool CC v Irwin (1976)

Question 21

Name the 2 tests used for implying terms in law (cases)?

Answer 21

1) Business efficacy test - The Moorcock (1889)

2) Officious bystander test - Shirlaw v Southern Foundries (1939)

Question 22

Business efficacy test

Answer 22

The Moorcock (1889)
A term will be implied into a contract if ‘necessary’ to give the contract ‘business efficacy’.

Question 23

Officious bystander test

Answer 23

Shirlaw v Southern Foundries (1939)
A term will be implied into a contract where it ‘goes without saying’ so that a reasonable bystander would conclude it was obvious the parties intended for the term to be incorporated.

Question 24

What is the significance of Lord Hoffman’s dictum in AG Belize v Belize Telecom (2009)?

Answer 24

He argued that neither the business efficacy or officious bystander tests were necessary and that implying terms is instead an exercise of interpretation.

Question 25

Is Lord Hoffman’s approach as set out in AG Belize still good law? Why?

Answer 25

NO
Despite being affirmed in Rainy Sky v Kookmin Bank (2011), Arnold v Britton (2015) and Wood v Capita (2017), in M&S v BNP Paribas (2015), Lord Wilberforce clarified that the test advocated by Lord Hoffman in AG Belize was too broad and therefore unworkable.

The correct tests are the business efficacy and officious bystander tests.

Question 26

Where was the M&S v BNP Paribas (2015) case affirmed as the correct approach?

Answer 26

JN Hipwell & Son v Szurek (2018)