Terms

Question 1

Olley v Marlborough Court Hotel

Answer 1

Timing of incorporation of terms: cannot happen retrospectively (only binding if introduced before or at the time the contract is made)

Question 2

Parker v South Eastern Railway Co.

Answer 2

Objective test: could a reasonable person have pointed out the terms/conditions e.g.”see back”

Question 3

Thornton v Shoe Lane Parking

Answer 3

Lord Dennings “red hand rule”

Terms which are particularly onerous must be bought to the party’s attention in the most explicit way

Question 4

McCutheon v David MacBrayne Ltd

Answer 4

Incorporation through prior course of dealing and this course of dealing must be consistent

Question 5

The Moorcock

Answer 5

“Business efficacy test” in business transactions the law desires business efficacy by both parties who are business men

Question 6

Shirlaw v Southern Foundries

Answer 6

“Officious bystander test” anything implied in contracts must be so obvious an officious bystander would be in unequivocal agreement

Question 7

Nordenfelt

Answer 7

Restriction on trade only upheld if it is reasonable for both parties and the interest of the public

Question 8

Esso Petroleum

Answer 8

Courts will strike out a term in the contract not get rid of the whole contract where they can

Question 9

Proactive Sport Management v Rooney

Answer 9

Exploitation of rights: these cannot be restricted

Protected under the restraint of trade doctrine

Question 10

DG of fair trading v First national bank

Answer 10

Requirement of good faith … there must be ‘fair and open dealing’ i.e. the consumer must know what to expect

Question 11

Case 26/13 Kasler

Answer 11

Cant keep terms if they are unfair, but courts will just try and get rid of these rather than voiding the whole contract altogether

Question 12

What is a condition?

Answer 12

an act which affects a party’s contractual duty
conditions determine the parties’ obligations
a major term which goes to the root of the contract

Question 13

What is a warranty?

Answer 13

a guarantee or promise that specific facts are true and will happen
a minor term, not central to the contracts existence

Question 14

What is an innominate term?

Answer 14

cannot be defined as either ‘condition’ or ‘warranty’
established in Hong Kong Fir Shipping this approach looks at the effect of the breach
only if it deprives the innocent party of substantially the whole benefit of the contract will they be able to bring the contract to an end

Question 15

Is a term a condition?

4 categories for determining a term as a condition, set out in ‘The Sunflower’

Answer 15

1) if it is expressly so provided by statute
2) if it has been so categorised as result of a previous judicial decision (precedent)
3) if the consequences of its breach, with the right for the innocent party to treat himself as discharged are provided expressly in the contract
4) if the nature of the contract has intended that the innocent party would be discharged in the event that the term was not fully complied with

Question 16

Is there a role for warranties?

Answer 16

the Sales of Goods Act preserves the term ‘warranty’ but outside this statutory context there are very few warranties

Question 17

How do you tell if an innominate term justifies termination?

Answer 17

only a very serious breach, which disproves the innocent party substantially of the whole benefit intended by the contract, can be terminated

Question 18

Why is it important to distinguish between terms?

Answer 18

not all promises have the same contractual significance

i.e. some breaches entitle the party to not only claim damages, but also put an end to the contract

Question 19

When can a contract be terminated?

Answer 19

For a breach of contract, but never a warranty

Question 20

Breaches which justify termination are called?

Answer 20

Repudiatory breach