Terms Of A Contract

Question 1

When are you bound to a contract?

Answer 1

In the absence of fraud or misrepresentation, you are bound once you sign

Question 2

What will rescind a contract?

Answer 2

Fraud or misrepresentation

Question 3

What are the four ways a term can be implied?

Answer 3

Custom
Fact
Law
Statute

Question 4

Implied by custom?

Answer 4

Where a term is predominant in trade, courts may imply a term in a contract of the same type in that trade

Question 5

What are the two tests when implying a term by fact?

Answer 5

Business efficacy test - whether contract would make business sense without the term

The officious bystander test - if a bystander suggested the term when contract was being made, would the parties have agreed

Question 6

Implied by law?

Answer 6

Courts may imply where the law offers some protection to the weaker party

• landlord/tenant
• retailer/customer

Question 7

Implied by statute?

Answer 7

Sale of Goods Act 1979

Business to business contract

Question 8

What is a condition?

Answer 8

A condition is something of essential importance to the contract and so breach of this means the contract cannot continue

Breaching this means you can bring a contract to an end and claim damages

Question 9

What is a warranty?

Answer 9

This is of lesser importance to the contract and so contract can continue after

Only remedy you can get is damages

Question 10

What is an innominate term?

Answer 10

No name them.

Serious = Condition
Not serious = Warranty