Terms Flashcards
How do we distinguish between a term and a representation?
- Oscar Chess Ltd: did seller intend to bind themselves?
- Dick Bentley Production: did representation intend to induce someone to buy?
- L’Estrange v Graucob: is statement in writing?
Where may you also have issues with incorporation of terms?
Where term is important (Bannerman v White)
Where buyer may verify (Ecay v Godfrey)
Describe a case about incorporation by signature.
L’Estrange v Graucob - clause for defectiveness of product, claimant signed. Didn’t read small print, but bound anyway
Describe some cases concerning incorporation by notice.
Thornton v Shoe Lane Parking (1971): notices can’t alter after contract formed
Oiley v Marlborough Court Hotel [1949]: property stolen due to negligence - not seen notice til afterwards
What is a red hand clause?
The more unusual a rule, the more attention you have to bring to it
Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd (1989)
Describe a case concerning incorporation by previous dealings
McCutcheon v David MacBrayne: not always asked to sign risk notice
What is the business efficacy test?
The Moorcock (1889): In order to make contracts work, a reasonable duty of care is implied into the contract.
How may terms be implied?
By statute (Sale of Goods Act 1979), by custom, by fact (needed to make agreement work)
What is the officious bystander test?
- Created in Shirlaw
- AG of Belize v Belize Telecom Ltd: “Terms are implied to reflect the parties reasonable expectations as a broader part of objective construction”
When are terms implied in law?
Usually due to relationship e.g. employer, employee
- Liverpool CC v Irwin [1976] Denning: ‘courts are prepared to imply a term where it is reasonable to do so’
What four levels of implication did Lord Wilberforce mention in Liverpool CC v Irwin?
1) Gap-filling
2) Business efficacy
3) Reasonableness? NO
4) Incomplete/necessity
What happened in Scally v Southern Health + Social Services Board?
Medics not informed of full pension scheme - where term not explicitly stated, implied duty of employer to bring this to employees attention
What happened in Crossley v Faithful + Gould Holdings Ltd? Why was this narrower than the approach in Scally?
Percent of salary paid during illness, Crossley resigned on employers advice, argued there should be a term implied to tell of disadvantage.
REJECTED: only applies where employee would not have known about benefit otherwise
What is the traditional method of interpretation of contract terms?
Traditional = literal.
Lovell and Christmas Ltd v Wall: what parties intend doesn’t matter - take the ‘ordinary grammatical meaning’
In what case did the court move from a literal to purposive interpretation of contract?
Prenn v Simmonds [1971] ‘enquiry beyond the language and see what the circumstances were’
