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Contract Law > Terms And Exemption Clauses > Flashcards

Terms And Exemption Clauses Flashcards

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1
Q

What are contractual terms?

A

Contractual terms may be express or implied.

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2
Q

What are express terms?

A

Express terms are statements made by the parties, by which they intend to be bound.

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3
Q

How can express terms be agreed upon?

A

A contract can have terms agreed in writing, orally, or a mixture of the two.

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4
Q

What are implied terms?

A

Implied terms are not formed by statements made by the parties; they have not been agreed upon, orally or in writing.

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5
Q

What is the difference between a representation and a term?

A

Only a term is intended to be binding.

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6
Q

How do courts determine if a statement is a binding term?

A

The court applies an objective test based on what a reasonable person would understand to be the intention of the parties.

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7
Q

What factors influence whether a statement is a term?

A

The importance of the statement, timing, reduction of the contract into writing, special knowledge or skill of the person making the statement, and assumption of responsibility.

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8
Q

How does timing affect the classification of a statement?

A

If the statement was made at the time of contracting, it is more likely to be a term than if made earlier or with a delay.

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9
Q

What are ‘mere puffs’, representations, and terms?

A

Statements made during negotiations can be divided into ‘mere puffs’, representations, or terms of the contract.

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10
Q

What happens if an untrue statement is a term of the contract?

A

It may give rise to a claim for breach of contract.

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11
Q

What is required for terms to be incorporated into a contract?

A

Reasonable steps must be taken to bring them to the claimant’s attention.

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12
Q

How must particularly adverse clauses be presented?

A

They must be clearly brought to the other party’s attention, potentially printed in red ink.

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13
Q

When can terms be incorporated by notice?

A

Notice must be given before or at the time of contracting.

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14
Q

What is an ‘entire agreement’ clause?

A

It states that the agreement constitutes the entire agreement between the parties, superseding any previous understandings.

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15
Q

What are terms implied in fact?

A

Terms implied in fact are based on trade customs or the need to give ‘business efficacy’ to a contract.

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16
Q

What is the significance of trade or professional customs?

A

A term may be implied based on the assumption that it was the intention of the parties to be bound by well-known customs.

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17
Q

What is business efficacy in the context of implied terms?

A

A term will be implied if, without it, the arrangement would be unworkable.

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18
Q

What are terms implied at common law?

A

Terms can be implied by the courts to give effect to legal duties arising from certain common types of contractual relationships.

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19
Q

What are statutory implied terms?

A

Certain statutes indicate that stipulated terms will be implied into contracts, irrespective of the parties’ intentions.

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20
Q

What does Section 12 of the Sale of Goods Act 1979 imply?

A

It implies that the seller has the right to sell the goods.

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21
Q

What does Section 13 of the Sale of Goods Act 1979 provide?

A

It provides that there is an implied term that the goods will correspond with the description.

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22
Q

What does Section 14(2) of the Sale of Goods Act 1979 state?

A

It states that there is an implied term that the goods supplied are of satisfactory quality.

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23
Q

What is the checklist for assessing satisfactory quality under Section 14(2B)?

A

Fitness for purpose, appearance, freedom from minor defects, safety, and durability.

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24
Q

What does Section 14(3) of the Sale of Goods Act 1979 imply?

A

It implies that goods should be fit for any particular purpose made known to the seller.

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25
Q

What does Section 15 of the Sale of Goods Act 1979 state regarding sales by sample?

A

It implies that the bulk will correspond with the sample in quality and be free from defects not apparent on reasonable examination.

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26
Q

What is the significance of Section 15A regarding breach of conditions?

A

It allows for a breach to be treated as a breach of warranty if it is so slight that it would be unreasonable for the buyer to reject the goods.

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27
Q

What does Section 55 of the Sale of Goods Act 1979 indicate?

A

It indicates that a seller’s liability can be excluded or restricted by agreement, subject to the Unfair Contract Terms Act 1977.

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28
Q

What terms does the Sale of Goods Act 1979 imply into contracts for the sale of goods?

A

The seller has the right to sell the goods, the goods will comply with their description, be of satisfactory quality, suitable for purpose, and comply with any sample.

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29
Q

What does s.12 of the Supply of Goods and Services Act 1982 imply?

A

The goods will comply with their description.

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30
Q

What does s.14(2) of the Supply of Goods and Services Act 1982 imply?

A

The goods will be of satisfactory quality.

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31
Q

What does s.14(3) of the Supply of Goods and Services Act 1982 imply?

A

The goods will be suitable for any purpose made known to the seller.

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32
Q

What does s.15 of the Supply of Goods and Services Act 1982 imply?

A

The goods will comply with any sample.

33
Q

To which contracts does the Supply of Goods and Services Act 1982 apply?

A

It applies to certain contracts for the transfer of property in goods, contracts for the hire of goods, and contracts for the supply of services.

34
Q

What is a ‘contract for the transfer of goods’ under the SGSA?

A

A contract under which one person transfers or agrees to transfer to another the property in goods, where ownership changes hands.

35
Q

What are the implied terms in contracts for the transfer of goods?

A

Implied terms regarding title, description, quality or fitness, and sample.

36
Q

What is a ‘contract for the hire of goods’ under the SGSA?

A

A contract under which one person bails or agrees to bail goods to another by way of hire.

37
Q

What are the implied terms in contracts for the hire of goods?

A

Implied terms about the right to transfer possession, description, quality or fitness, and sample.

38
Q

What are the implied terms in contracts for the supply of services?

A

Care and skill, time of performance, and consideration.

39
Q

What does s.13 of the SGSA imply for services?

A

There is an implied term that the supplier will carry out the service with reasonable care and skill.

40
Q

What does s.14 of the SGSA imply for services?

A

There is an implied term that the supplier will carry out the service within a reasonable time.

41
Q

What does s.15 of the SGSA imply for services?

A

There is an implied term that the party contracting with the supplier will pay a reasonable charge.

42
Q

Can parties contract out of terms implied under the SGSA?

A

Yes, suppliers may negative or vary the terms, subject to the Unfair Contract Terms Act 1977.

43
Q

What does UCTA do regarding implied terms?

A

UCTA significantly limits the ability to negative or vary these terms.

44
Q

What does the Consumer Rights Act 2015 comprise?

A

The Consumer Rights Act 2015 comprises three Parts: Part 1 deals with consumer contracts for goods, digital content, and services; Part II regulates unfair terms in consumer contracts; Part III is of a miscellaneous and general nature.

45
Q

What are the cornerstone rights implied in a consumer sale of goods?

A

Goods should be of satisfactory quality (s 9), reasonably fit for any purpose made known to the trader (s 10), and match the description (s 11).

46
Q

What remedial options are available to consumers for non-conforming goods?

A

The options are: the short term right to reject, the right to repair or replacement, and the right to a price reduction or final right to reject.

47
Q

What is the duration of the short term right to reject goods?

A

The short term right to reject is available for 30 days from the time ownership has passed and the goods have been delivered.

48
Q

What are the implied terms for contracts for digital content?

A

Digital content should be of satisfactory quality (s 34), reasonably fit for purpose (s 35), and match any description given by the trader (s 36).

49
Q

What remedial options are available for non-conforming digital content?

A

The options are: the right to repair or replacement, and the right to price reduction.

50
Q

What rights does a consumer have regarding services under the Consumer Rights Act 2015?

A

Consumers have the right to services performed with reasonable care and skill (s 49), a reasonable price (s 51), and provided in a reasonable time (s 52).

51
Q

What are the remedial options for breaches in service contracts?

A

The options are: the right to require repeat performance and the right to a price reduction.

52
Q

How are terms classified in a contract?

A

Terms can be classified as conditions, warranties, or innominate terms.

53
Q

What happens if a party breaches a condition?

A

The innocent party has the right to treat the contract as repudiated and can terminate the contract.

54
Q

What is the remedy for a breach of a warranty?

A

The only remedy available is to sue for damages.

55
Q

What is the distinction between conditions and warranties?

A

A condition is an important term going to the root of the contract, while a warranty is a less important term.

56
Q

What are innominate terms?

A

Innominate terms are neither conditions nor warranties; their classification depends on the consequences of the breach.

57
Q

What is the starting position for classifying terms?

A

Consider whether the term has been classified as a condition or warranty by statute, the parties, or previous judicial decisions.

58
Q

What is an exemption clause?

A

An exemption clause is a contractual term that limits or excludes liability that would otherwise attach to one of the contracting parties.

59
Q

What is the contra proferentem rule?

A

Exemption clauses will be construed contra proferentem, meaning any ambiguity will be resolved against the party seeking to rely upon it.

60
Q

What must be included in exemption clauses to exclude liability for negligence?

A

Clear words must be used, preferably including the word ‘negligence’.

61
Q

What does the Unfair Contract Terms Act 1977 regulate?

A

It regulates exemption clauses in contracts, ensuring certain types have no effect and others are effective only if they meet specific requirements.

62
Q

What is the purpose of the Unfair Contract Terms Act 1977?

A

To impose limits on the extent to which liability for breach of contract or negligence can be avoided by means of contract terms.

63
Q

What does UCTA stand for?

A

UCTA stands for the Unfair Contract Terms Act.

64
Q

What is the purpose of UCTA?

A

The purpose of UCTA is to impose limits on the extent to which liability for breach of contract or negligence can be avoided by contract terms.

65
Q

What types of exemption clauses does UCTA address?

A

UCTA ensures that certain exemption clauses have no effect, while others are effective only if they satisfy the requirements of reasonableness.

66
Q

To whom does UCTA apply?

A

UCTA applies to contracts between businesses and does not apply to consumer contracts governed by the Consumer Rights Act 2015.

67
Q

What is ‘business liability’ as defined by UCTA?

A

‘Business liability’ refers to liability for breach of obligations arising from actions taken in the course of a business or from the occupation of business premises.

68
Q

What happens when both parties are acting in the course of a business?

A

When both parties are acting in the course of a business, UCTA applies.

69
Q

What is the effect of UCTA on negligence liability?

A

UCTA defines negligence to include breach of obligations to take reasonable care or exercise reasonable skill in contract performance.

70
Q

Can liability for death or personal injury from negligence be excluded under UCTA?

A

No, any attempt to exclude or restrict liability for death or personal injury resulting from negligence is void.

71
Q

What is required for excluding liability for other losses resulting from negligence under UCTA?

A

Exclusion of liability for other losses due to negligence is valid only if the term satisfies the requirement of reasonableness.

72
Q

What does Section 6(1A) of UCTA state about quality of goods?

A

Section 6(1A) states that liability for breach of statutory implied terms about quality of goods cannot be excluded or restricted unless the term satisfies the requirement of reasonableness.

73
Q

What is the UCTA reasonableness test?

A

The UCTA reasonableness test requires that the term must be fair and reasonable considering the circumstances known to the parties at the time the contract was made.

74
Q

What factors are considered in the UCTA reasonableness test?

A

Factors include the bargaining positions of the parties, inducements to agree to the term, and whether the customer knew of the term’s existence.

75
Q

What does the Consumer Rights Act 2015 (CRA) regulate?

A

CRA regulates unfair terms in consumer contracts, including attempts to exclude or limit liability for breach of contract.

76
Q

Can a trader exclude liability for death or personal injury in a consumer contract under CRA?

A

No, a trader cannot exclude or restrict liability for death or personal injury resulting from negligence in a consumer contract.

77
Q

What terms cannot be excluded or restricted under Section 31 of CRA?

A

Liability for breach of terms regarding satisfactory quality, fitness for purpose, and description of goods cannot be excluded or restricted.

78
Q

What does Section 57 of CRA state about services?

A

Section 57 states that any attempt to exclude liability for services performed with reasonable care and skill is not binding on the consumer.

79
Q

What is the definition of an unfair term under CRA?

A

A term is unfair if it causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer.

Contract Law (6 decks)

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