Terms

Question 1

Term

Answer 1

Promise that becomes part of the contract itself.

Question 2

Representation

Answer 2

Statement which induces a party to enter into a contract, but is not apart of the contract itself.

Question 3

Liability for false term?

Answer 3

It is deemed a breach of contract and the injured party has a right to sue.

Question 4

Express Term

Answer 4

Specifically mentioned and agreed to by both parties at the time the contract is made.

Question 5

Implied Terms

Answer 5

Words or provisions that a court presumes were intended to put into the contract.

Question 6

What are the main guidelines used to differentiate between a term and a representation?

Answer 6

• Significance of Statement
• Special Knowledge/Skill
• Timing of Statement
• Agreement in Writing
• Strength of Inducement

Question 7

1. Significance of Statement:

Answer 7

Term. If the injured party makes the other aware that if the statement had not been said, they would not have entered the contract.

Bannerman v White

Question 8

2. Special Knowledge/Skill:

Answer 8

Term. Courts deem statements made by experts pertaining to relevant subject as terms.

Dick Bentley Productions v Harold Smith

Question 9

Dick Bentley Productions v Harold Smith contrasted in:

Answer 9

Oscar Chess v Williams

Buyer should have noticed age of car,

Question 10

3. Timing of Statement

Answer 10

The more time in between the statement being made and the contract being concluded, the less likely a court will regard it as a term.

Routledge v Mckay

Question 11

Routledge v Mckay contrasted in:

Answer 11

Schawer v Reade

Importance and strength of statement make timing irrelevant.

Question 12

4. Agreement in writing

Answer 12

Any statement present in the written contract is a term.

Question 13

5. Strength of inducement

Answer 13

The more emphatically a statement is made, the more likely the courts will regard it as a term.

Schawer v Reade

Question 14

3 Ways written terms can be incorporated into a contract:

Answer 14

1. By signature
2. By reasonable notice
3. Previous course of dealings

Question 15

Parol evidence rule:

Answer 15

If the contract is written, then the writing constitutes the complete contract. Parties cannot add to, vary or contradict the writing.

Henderson v Arthur

Question 16

Exceptions to Parol evidence rule:

Answer 16

1. Rectification
2. Partially written agreements
3. Implied terms.
4. Operation of a contract.
5. Evidence about parties.
6. Proving custom

Question 17

Rectification

Answer 17

Document fails to record oral agreement, extrinsic evidence may be used.

Question 18

Partially written agreements

Answer 18

Where there is a written contract but both parties intended to qualify it with other oral statement, the parole evidence rule does not apply.

Couchman v Hill

Question 19

Implied terms and Parol Evidence Rule:

Answer 19

Where a contract is the type where its terms are implied by law, then the parole evidence rule does not apply.

Question 20

Operation of the contract

Answer 20

Parole evidence rule is displaced where extrinsic evidence is shows that the contract would not have come into effect or end, if not for a particular circumstance.

Pym v Campbell

Question 21

Evidence about parties

Answer 21

Extrinsic evidence can be used to show in which capacities the parties were acting.

Question 22

Proving custom

Answer 22

Extrinsic evidence can be used to clarify local trade and custom.

Smith v Wilson

Question 23

Possible status of oral statements made before written contract is made:

Answer 23

• Contract exclusively written. Oral statements are treated as representations.
• Contract partly written and party oral.
• Two contracts. One is written and the other is based on the oral statements.

Question 24

Collateral Contracts

Answer 24

Secondary contracts based upon oral statements.

City and Westminster Property v Mudd

Question 25

Types of implied terms

Answer 25

• Terms implied in fact
• Terms implied in law
• Terms implied by custom
• Terms implied by trade usage

Question 26

Terms implied by fact:

Answer 26

Terms which are not in the contract. It is assumed that both parties would have included them had they remembered at the time.

Marks and Spencer v BNP Paribas

Question 27

Terms implied in law:

Answer 27

Terms which the law decided must be present in certain types of contract.

Liverpool City Council v Irwin

Question 28

Terms implied by custom:

Answer 28

Implied if there is evidence suggesting that by traditional custom, the terms are present.

Smith v WIlson

Question 29

Terms implied by trade usage:

Answer 29

Term implied where it would be part of a contract made by parties involved in trade.

Cunliffe-owen v Teather and Greenwood

Question 30

Officious Bystander

Answer 30

Something so obvious that should a bystander raise it during negotiations, both parties would agree to inserting it.

Question 31

Business efficacy

Answer 31

Terms must be implied in order to make the contract function.

The Moorcock

Question 32

Entire agreement clause

Answer 32

Clauses which state the written contract contains entire agreement.

Question 33

The law seeks to classify terms based on importance. What are the three types of contractual terms?

Answer 33

• Condition
• Warranty
• Innominate

Question 34

Condition

Answer 34

Important tern which goes to the root of the contract.

Question 35

Warranty

Answer 35

Subsidiary term

Question 36

Innominate

Answer 36

Classification depends on seriousness of breach

Hong Kong Fir Shipping v Kawasaki

Question 37

Remedy for breach of a condition?

Answer 37

Contract is repudiated

Question 38

Remedy for breach of warranty?

Answer 38

Can sue for damages