TERMS

Question 1

What are the types of term? (3)

Answer 1

-a condition
-a warranty
-an innominate term

Question 2

what can terms either be? (2)

Answer 2

implied or expressed

Question 3

what are implied terms? (1)

Answer 3

implied terms are suggested in the contract.

Question 4

what are expressed terms? (1)

Answer 4

specifically agreed by the parties.

Question 5

what are terms? (1)

Answer 5

terms define the obligations of each party to the contract.

Question 6

what is an innominate term? (1)

Answer 6

a term in a contract that is not defined as a condition or a warranty.

Question 7

what is a condition? (1)

Answer 7

a term in a contract that is central to the contract, breach of which may allow the contract to be repudiated.

Question 8

what is a warranty? (1)

Answer 8

a minor term in a contract, breach of which does not end the contract but allows a claim for damages only.

Question 9

what is meant by repudiation? (1)

Answer 9

the ending of a contract.

Question 10

what is meant by recission? (1)

Answer 10

this is an equitable remedy that is made at the discretion of the judge, the purpose of this is to put the parties back in their pre-contractual position.

Question 11

what cases can be used for the importance of conditions? (1)

Answer 11

Poussard v Spiers and Pond (1876)

Question 12

what case can be used for the minority of a warranty? (1)

Answer 12

Bettini v Gye (1876)

Question 13

how do judges work out the position of an innominate term? (1)

Answer 13

depends on the severity of the consequences of any breach of the term, instead of insisting at the outset of the contract, the parties wait until the effect of the breach makes it a condition or warranty.

Question 14

what case can be used to clarify the origin of innominate terms? (1)

Answer 14

Hong Kong Fir shipping co ltd v Kawasaki Kisen Kaisha ltd (1962)

Question 15

what will courts take into account when deciding if a statement is representation or a term? (4)

Answer 15

-the importance attached to the representation
-special knowledge or skill of the person making the statement
-any time lag between making the statement and making the contract
-whether there is a written contract

Question 16

what cases relate to importance attached to representation? (1)

Answer 16

Couchman v Hill (1947)

Question 17

what case relates to special knowledge or skill of the person making the statement? (2)

Answer 17

Oscar Chess v Williams (1957)
Dick Bentley v Harold Smith Motors (1965)

Question 18

what case relates to the time lag between statement and contract? (1)

Answer 18

Routledge v Mackay (1954)

Question 19

what common law cover implied terms? (2)

Answer 19

-in business-to-business contracts, terms may be implied
-in a contract between a business (trader) and a consumer

Question 20

what acts provide evidence for business-to-business contracts and implied terms? (2)

Answer 20

-the sale of goods act 1979
-the sale of goods and services act 1982

Question 21

what acts provide evidence for contracts between trader and consumer and implied terms? (1)

Answer 21

the consumer rights act 2015

Question 22

how can terms be implied through common law? (2)

Answer 22

-through business efficacy and the officious bystander test
-by custom or prior dealings between parties

Question 23

what is meant by business efficacy? (1)

Answer 23

the courts will imply a term into a contract is the term is necessary to make sure that the contract works on a business-like basis.

Question 24

what is the officious bystander test? (2)

Answer 24

this test asks two questions;
-is the term necessary to make the contract effective?
-if the parties to the contract had thought about it, would they have agreed that the suggested term was obviously going to be in the contract?

Question 25

what case can be used as evidence for business efficacy for implied terms? (1)

Answer 25

The Moorcock (1889)

Question 26

what occurred in the case of The Moorcock and when was it? (4)

Answer 26

the defendants owned a wharf, they agreed to dock and unload cargos from a ship. Both parties were aware the boat would be their at low tide and the ship would rest at the bottom. The ship broke against ridge rock, The defendants argued there was no term covering, the court implied a term that the ship would be safe mooring there and it was not. (1889)

Question 27

what case can be used as evidence for the officious bystander test? (1)

Answer 27

Shirlaw v Southern Foundaries Ltd (1939)

Question 28

what occurred in the case of Shirlaw v Southern Foundaries and when was it? (4)

Answer 28

“prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement; they would testify suppress with a common ‘oh, of course’” (1939)

Question 29

what case shows evidence that if a term were to be implied but it be ridiculous to assume such? (1)

Answer 29

Shell UK ltd v Lostock garage ltd (1977)

Question 30

what occurred in the case of Shell UK ltd v Lostock garage ltd and when was it? (4)

Answer 30

Shell sold oil at a lower price to other garages causing Lostock to sell at a loss. Lostock argued that there was a term in the contract that they would not discriminate against them but it failed as shell would never have agreed to this. (1977)

Question 31

what case gives evidence that both parties understood each others intentions for the terms in the contract? (1)

Answer 31

Egan v Static control components (Europe) ltd (2004)

Question 32

what occurred in the case of Egan v Static control components (Europe) ltd and when was it? (4)

Answer 32

SCC supplied Egan with components, before this Egan had signed contracts making him liable for debts, Egan was asked to pay these debts in the same form as usual. when the company went into liquidation Egan argued the debts only applied to after the contract was signed, court decided the reasonable person would assume debt would apply after and future debts. (2004)

Question 33

what did the supreme court cover in the case of Marks and Spencer plc v BNP paribas (2015)? (6)

Answer 33

-reasonableness is to be judged objectively
-fairness and acceptability to the parties are not enough
-the requirement for reasonableness and equitableness will usually add nothing to the other tests
-the business efficacy and officious bystander tests are not cumulative
-the officious bystander test may be straightforward
-the test of necessity for business efficacy involves a value judgement

Question 34

what case gives evidence for terms implied by custom? (1)

Answer 34

Hutton v Warren (1836)

Question 35

what occurred in the case of Hutton v Warren and when was it? (2)

Answer 35

local custom meant the end of an agricultural lease, a farmer was entitled to allowance for seed and labour on land. terms of lease must be viewed by custom. (1836)

Question 36

what case gives evidence for terms implied by prior dealings between the parties? (1)

Answer 36

Hillas v Arcos (1932)

Question 37

what occurred in the case of Hillas v Arcos and when was it? (3)

Answer 37

contract contained clause allowing them to buy more timber in 1931but vage in terms of what timber. defendants refused to deliver the timber, they argued in the area of vagueness court argued that was no defence. (1932)