terms- express and implied Flashcards
What is the three different terms
Conditions, warranties and innominate terms
What is conditions
Terms which are central to the contract. If these terms are breached then the innocent party has the right to bring the contract to an end
What are warranties
Minor terms. Breach of these terms gives a right to damages but does not bring the contract to an end
What are innominate terms
Not defined as conditions or warranties. If the effects of a breach are serious then they will be treated as conditions. If trivial then they will be treated as warranties. If it has serious effect it will be conditions. If it has minor effect it will conditions
How to classify contractual term
If one of the parties to a contract fail to meet their obligations then there will be breaching one of the three terms
How would you classify a express warranty term
Minor term. Contract may still enforced bc it does not jeopardise the whole of the agreement
How to classify a express condition term
These terms that go to the root of the contract. A wronged party will be able to consider the contract cancelled
What term was the case of poussard V spiders and pond 1876
Conditions
Facts of poussard V spiders and pond 1876
an opera singer made a contract to sing in a opera. Failed to attend rehearsals and the opening night.
Held for poussard V spiders and pond 1876
held that the promoters of the concert were entitled to replace the singer bc her role was central to the performance and her failure to attend amounted to a breach of condition
What term was the case of bettini v gye 1876
Warranty
Facts of bettini v gye 1876
opera singer was required to attend for performance were due to start. The singer did not attend for the first two days of rehearsals
Held for bettini v gye 1876
to be breach of warranty and not a breach of conditions
what the breach based approach
when is approach is used, the term will be considered and classified based on how serious the effects of the breach are
what is innominate terms on breach based approach
classification depends on consequences. asks whether the innocent party to the breach was deprived substantially of the whole benefit of the contract. where this is the case the contract. where this the case the contract may be viewed as at end
facts of Hong Kong shipping v Kawasaki Kisen 1962
D chartered a ship from C for two years. The ship was required to be seaworthy. The ship was not seaworthy and C lost 18 weeks of use
held for Hong Kong shipping v Kawasaki Kisen 1962
Classification of terms depends on the impacts of the terms on the contract. - warranty
what term was applied for Ark shipping v Silverburn shipping 2019
innominate terms
facts of Ark shipping v Silverburn shipping 2019
The dispute centred on the interpretation of a particular term in a bareboat charter party (lease) of a vessel on a standard form of contract by ark shipping company LLC, and whether the vessel’s owner, Silverburn Ltd, was able to terminate immediately and seek damages as a result of an alleged breach of that particular clause.
what was the classified clause of Ark shipping v Silverburn shipping 2019
if the clause was a condition then as the innocent party Silverburn would be able to terminate the contract immediately for breach and seek damages, regardless of the consequences of that breach/
classification of terms- specification of the parties.
what did Ark shipping v Silverburn shipping 2019 endorsed
The case endorsed the considerations in Spar shipping AS v Grand china logistics holding group, highlighting that the court’s approach should be that a term is innominate unless it is clear that it is intended to be a condition or a warranty.
held for Ark shipping v Silverburn shipping 2019
Therefore, on true construction of the charter party, the requirement to keep the vessel ‘with unexpired classification’ could only be an innominate clause and it had not been intended by the parties to be conditions
what case links to classification of terms- specification of the parties
lombard v butterworth 1987
facts of lombard v butterworth 1987
D leased a computer from the C. D was to pay £584 by 20 instalments every 3 months. A term of the lease agreement provided that punctual payment was a requirement and breach of this term would entitle the lessor to terminate the agreement. D fit into arrears with the instalments and the C took possession of the computer and sold it for £175. C then sued D claiming arrears and all future payment amounting to £6,869 in total.
held for lombard v butterworth 1987
the term relating to prompt payment was a condition. The parties by their agreement had demonstrated that prompt payment was an essential term and the consequence of breach was clearly set out. Nicholls LJ stated that even one late payment would entitle the lessor to terminate irrespective of the effect of the breach.
what may happen when classifying term of specification of parties
sometimes the court will override what the parties have said in the agreement where it is so unreasonable
facts of Schuler v Wickman tools
schuler was a company that manufactured tools. Wickman was a sales company granted the sole right to sell tools manufactured by schuler. A term of the contract stated that wickman would send a sales person to each named company once a week to try to get sales. This imposed an obligation on Wickman to make 1,400 visits in total. This term was described in the contract as being a condition. Wickman failed to make some of the visits and schuler terminated the contract for breach of condition
held for Schuler v wickman tools 1974
despite the fact the contract has expressly stated the term was a condition, the house of lords held that it was only a warranty, because the requirement to make that number of visits was so unreasonable that the parties could not be taken to have intended it
what did judges look at for Mihalis angelos
look at the market the contract operates in to decide whether the term is a condition or warranty
facts of Mihalis angelos
MA is the owner of the ship, chartered the ship to D to sue for the carriage of some cargo. A clause in the agreement stated the ship was expected ready for load on 1st july. In fact the owners had no grounds for believing the ship would be ready to load on that date as it was in AHong Kong at the time and would not be ready until at least the 14th of july and in fact it was not ready at the date. D cancelled the contract on 17th july. The cargo that they expected to be carrying had not arrived due to the bombing of a railway in vietnam. The ship owners brought action against the Ds for anticipatory breach. Ds argued that the claimant was in breach of condition of the contract by not be ready to load on the specified date
-the classification as a condition was said to be because of the need for a commercial certainty shipping contract.
held for Mihlais angelos
the expected ready to load clause was a condition despite the fact it had caused no loss to D. the classification as a condition was said to be because of the need for commercial in shipping contracts
express terms can be sometimes use how
extremely harsh
facts of interfoto picture library v Stiletto 1989
Cs ran a photo library D was in advertising. C advanced some transparencies to D for his perusal and he was to get back to them as to which photos he would like to use. The [package of the photos contained a doc stating that if any transparencies were kept longer than 14 days a £5 +VAT holding fee would be charged per photo per day. D had not read this document and then forgot about the transparencies and failed to return them for 6 weeks. Cs brought an action claiming a holding fee of £23,783 as specified in the contract.
held for interfoto picture library v stiletto 1989
the term was not incorporated into the contract, where a term is particularly onerous the person seeking to rely on the term must take greater measures to bring it to the attention of the other party
if term isnt complied what happens
this will lead to an action for breach of contract
if representation isnt complied what happens
then this may lead to an action for misrepresentation
how do the courts decide whether what is said is a term or a representation.
courts will look at these factors
1.The importance of the statement
2.special knowledge or skill of the person making the statement
3.timing
4.Agreement in writing
5. trade puffs- not that important
what case links to the importance of the statement
couchman- couch potato - v hill 1947
facts of Couchman v hill 1947
C purchased a pregnant cow which the seller (D) stated was a heifer (a female cow that has not borne a child yet). The cow later died from pregnancy. C sued for breach of contract
held for Couchman v hill 1947
D was liable for breach of contract. the representation that the heifer was not pregnant was important to its purchase so was a term of the contract rather than a representation
what case link to special knowledge or skill of the person making the statement
Oscar chess v Williams 1957
facts of Oscar chess v Williams 1957
Mrs W purchased a second hand morris car on the basis that it was a 1948 model. The registration document stated it was first registered in 1948. The following year her son used the car as a trade-in for a brand new Hillman minx which he was purchasing from Oscar Chess. The son stated the car was a 1948 model and on that the Oscar Chess offered £290 off the purchase price of the hillman. Without this discount Williams would not have been able to go through with the purchase. 8 months later Oscar Ltd found out that the car was in fact a 1939 model and worth much less than thought. They brought action for breach of contract arguing that the date of the vehicle was a fundamental term of the contract and claimed damages.
held for Oscar chess v Williams 1957
the statement relating to the age the car was not a term but a representation of. The representee, Oscar as a car dealer, had the greater knowledge and would be in a better position to know the age of the manufacturer than the D.
facts of dick bentley v Harold smiths motors 1956
dick knew the defendant, who was a car trader specialising in the prestige market, for some time. He had asked him to look out for a well vetted Bentley car. D obtained a bentley and recommended it to the C. He told him that the car had been owned by a German Boran and had been fitted with a replacement engine and gearbox and had only done 20,00 miles since the replacement. Mr Bentley purchased the car but it developed faults. D has done some work under the warranty but more faults developed. It transpired that the care had done nearer 100,000 miles since the refit.
what question was asked in the case of Dick bentley v Harold smiths motors 1956
The question for the court was whether the statement amounted to a term in which case damages would be payable for breach of contract, or whether the statement was a representation, which case no damages would be payable since it was an innocent misrepresentation and the claimant has also lost right rescind due to lapse of time.
held for Dick bentley v Harold smiths motors 1956
the statement was a term. Mr smith as a car dealer had greater expertise and the claimant relied upon that expertise.
what does it mean about timing in expressed terms
where a statement made it not referred to in contract, then the more time has passed between the making of the statement and the making of the contract, the less likely it is be considered a term
what case links to timing
Routledge v Mckay 1954
facts Routledge v Mckay 1954
the seller of a motorbike stated that it was a 1942 BSA douglas model. This was recorded in the registration document. In fact it was a 1936 model and had been re-registered by a previous owner. The claimant went away to think about the purchase and returned a few days later and the parties exchange a document: “it is understood that when the £30 is paid over that this transaction is closed”
held for Routledge v McKay 1954
statement was a representation and not contractual term. registration doc was not prima facie evidence of a contractual term. neither party are expert and there was a lapse of time between the making if the statement and entering the contract giving C the opportunity to check the statement. no date mention when there was a written agreement
What it mean agreement in writing
if agreement is put into writing and the statement is not included then it is likely to be considered as a representation rather than a term
What are implied terms
Not expressly agreed between parties but are implied into contact by the common law or by statute
What are the 3 implied term
Terms implied by facts. Terms implied by custom. Terms implied by prior dealing
what it is meant by terms implied in fact
term which it is assumed that both parties would have intended to included in the contract of they had bought about it
case that links to terms implied by fact
M&S v BNP paribas 2015
facts of M&S v BNP paribas 2015
Under a commercial lease, the tenant could only terminate the lease if it paid a break premium equivalent to one year’s rent
The tenant (C), terminated the lease by paying the premium
C subsequently claimed that it was entitled to a repayment of the premium on the basis that a term entitling it to such repayment should be implied into the lease
held for M&S v BNP Paribas 2015
court held that a term will only be implied if necessary to given the contract business efficacy or if it is so obvious that the parties would have intended to included it. term cannot be implied just bc it would seem far
what te the two parts of term implied by fact
to given the contract business efficacy. the officious bystander test
what did lord Sumption say about to given the contract business efficacy
case of M&S v BNP paribas that it might be more helpful to say that ‘a term can only be implied by if, without the term, the contract would lack commercial or practical coherence
case that links to to given the contract business efficacy
the moorcock 1889
facts of the moorcock 1889
C moored his ship at the D’s wharf on the river Thames. The river Thames is a tidal rover and at times when the tide went out the ship would come into contact with the river bed
held for the moorcock 1889
court implied a term in fact, that the river bed would be safe for mooring.
Court introduced the business efficacy test. the term must be necessary to give the contract business effect. If the contract makes business sense without the term, the courts will not imply a term
what does it mean by the officious bystander test
a term will implied into the contract were it is ‘obvious that it goes without saying’
case link to officious bystander test
Shirlaw v southern foundries 1939
facts of Shirlaw v southern foundries 1939
Lostock garage was tied into a contract that said that it would only purchase petrol from the shell. Shell supplied other local garages at lower rates.
held for Shirlaw v southern foundries 1939
The court held that there was no implied term that the shell would not supply other local garages at a cheaper price. Whilst it might have been reasonable to imply such a term, it was not necessary. The contract made business sense without it.
what is meant by terms implied by custom
sometimes terms are implied bc of an established local custom of the particular
case link to terms implied by custom
Hutton v Warren 1840
facts of Hutton v Warren 1840
where a local custom that a tenant farmer was entitled to an allowance for see and labour on the land was incorporated into the contract
held for Hutton v Warren 1840
The court implied a term into the tenancy providing for compensation for the work and expenses undertaken in growing the crops. The term was implied as it was common practice for farming tenancies to contain such a clause.
what is meant by terms implied by prior dealing
a court may imply a term that reflects the previous dealing between the parties
case link to terms implied by prior dealing
Hillas v Arcos 1932
facts of Hillas v Arcos 1932
C agreed to buy from D in 1930 ‘22, 000 standards of softwood goods of fair specification over the season’
Clause 9 of the contract gave C an option to buy a further 100,000 standards during the season 1931 at 5% discount. C sought to exercise the option on 22 Dec 1930, but D could not perform as they had already sold the supply. D argued that the option agreement was not binding
held for Hillas v Arcos 1932
term can be implied based on previous transaction and trade practices to cure uncertainty. The option agreement was sufficiently certain and was binding
what are three statue for terms implied by statue
the sale of goods act 1979
the supply of goods and services act 1982
the consumer rights act 2015- for consumers
what is the sale of goods act 1979
has not been repealed and some of it still applies to contracts for the sale of goods and the supply of services outside a consumer context.
what is the supply of goods and services act 1982
It has not been repealed and some of it still applies to contracts for the sale of goods and the supply of services outside a consumer context.
what is a trader in CRA 2015
as somebody acting for purposes relating to that person’s trader, business, craft or profession whether personally or through another person acting on their behalf.
what s a consumer in CRA2015
deemed to be somebody acting for purposes wholly or mainly outside of their trade, business, craft or profession. As such, business- to- business “B2B” contracts are not caught by the CRA
why is the CRA important act
for consumer and incorporates many of the terms previously in the sale of goods legislation into consumer contracts
what is s.9 the right to satisfactory
‘every contract to supply goods is treated as including a term that the quality of the goods is satisfactory
when do you apply s.10 the right to fitness for particular purpose
where, before a contract is made a consumer makes known to the trader any particular purpose for which the consumer is contracting for the goods
when is the s.10 the right to fitness for particular not applied
where the consumer had not relied on the skill or judgement of the trader or where it is unreasonable for him to do so
