Terms Flashcards
What are Express Terms?
In a written contract = terms written on the page
In oral contract = terms expressed orally
What is an actionable misrepresentation?
Where there is a false statement of fact and the other party enters partly due to this statement.
What are Incorporated Terms?
Incorporation of terms arises in everyday contracts.
What are Implied terms?
Terms that are not expressed but implied in the contract.
2 types:
- Terms implied in facts
- Terms implied by law
What are Rectified Terms?
Terms that represent the intentions and desires of both parties despite the document not reflecting these wants.
- Acknowledges that parties can make mistakes.
- If both wanted X but contract says Y, X can be upheld
What are terms implied in fact?
Created especially for the certain contract.
- law of implication
What are terms implied in law?
The law says if you contract in a particular way, certain terms apply unless the parties expressly exclude them.
- Not an individual response
- Can be both legislation and case law
What is the basis of Traditional Contract Interpretation?
Everyday interpretation.
- The more understanding you have of language etc, the less likely you are to have issues
- Understanding the contract in a way that makes sense for both parties
What are the rules of traditional contract interpretation?
- The plain meaning rule
- The parol evidence rule
What is the plain meaning rule?
When interpreting a contract, if a word has a plain meaning, this is the legal meaning.
- Plain meaning = the usage of a word that is more common of all else
- The court CANNOT create an ambiguity that isn’t in the text
What is the parol evidence rule?
- If the terms are clear and unambiguous, parties cannot introduce outside evidence to show terms to mean something else
- Four corners rule
- Constraint on judicial creativity
- Prior negotiations inadmissible
What are the exceptions to when the plain meaning and parol evidence rules apply?
- If the language is ambiguous
- Trade usage
- Private dictionary usage
What are the advantages of the traditional approach?
- Certainty
- Respects the choice of parties to choose what to agree to
- Suspicion of judges
What are some criticisms of the traditional approach?
- Certainty provided by the traditional approach overstated
- Exceptions undermine certainty and efficiency
- Disrespects the autonomy of the parties
- Interpretation is a matter of judgement
- Protection of third parties at the expense of contracting parties is undesirable
What is private dictionary usage?
Situation where the parties to a contract, as a result of their own communication creates a special meaning within themselves.
Is context and commercial sense used in the modern approach to contract interpretation?
Yes. Use of context and commercial sense is mainstream.
What is the purpose of modern interpretation?
Court’s job is to determine the parties objective intentions.
How does the court determine the parties objective intentions?
What would a third party looking at the document think?
Modern approach to admissibility?
- Generally permissive and textual approach replacing parol rule
- All textual and extratextual content is relevant to the meaning
- More trusting of judges
- Prior negotiations evidence and subsequent actions can be considered
Does the admissibility of something mean it is determinative?
No, just because things are admissible, does not mean they are determinative.
Role of plain meaning in modern approach?
- Plain meaning presumption
- If something has clear, plain meaning it is likely what was intended
- Presumption can be displaces by other factors
Role of commercial sense in modern approach?
- Presumption that generally commercial parties are looking out for their own interest and commercial contracts will get roughly equal bargains
- The more a-symetrical the bargain, the less plausible the parties intended that meaning
Brief history of contract interpretation?
1997 – ICS started modern
interpretation. Sets out principles. Subsequent cases try to establish how these work together.
Early 2010s – an enthusiastic interpretation and implementation of ICS principles - by traditional
Mid-2010s – NZ courts re-affirmed the importance of plain
meaning and centrality of the text.
Late 2010s – plain meaning is important, but it is reconciled that cases in the ICS can be used
as examples as when it is appropriate to move away from it.
2021 – Bathurst case determines that clarity is more important than admissibility.
What questions did ICS leave us with?
- What’s the relationship between text, context and commercial sense?
- What are the limits of admissible context?
- What is the relationship between interpretation, implication and rectification?
Why was there a need for clarity over admissibility post ICS?
- ICS permitted pretty much everything to be admissible
- This was very costly and time intensive
- Judge’s opinions could be clouded by the extent of extra material
- Boundaries of admissibility needed to be laid out
What is the importance of remoteness?
Damages are only available when the breach has caused the loss.
What is the Bathurst 2 stage test? (Also the evidence act s 6)
- Is the evidence prima facie relevant?
- Does its probative value outweigh the time that admitting it would add to the proceeding?
Must be yes to both to be admissible.
What is Bathurst’s philosophy on objectivity?
- Certainty
- Holding people to bargains they make
- Supporting access to justice
