terms of a contract Flashcards
Contract terms
The need for certainty.
Statements made during negotiations.
Distinctions between terms and representations.
Express and implied terms.
Terms implied by common law, statute or custom.
Breach of contract term - the importance of classification of terms.
Effect of terms excluding or limiting liability for breach - exemption clauses.
distinguishing a term for a representation. courts will look at.
The knowledge and skill of the party making the statements.
The importance of the statements to the parties.
The interval of time between the statement and the contract.
Whether the statement is oral and the contract was written.
Express terms
stated in the contract.
Oral.
Written.
implied terms.
Terms which are not expressly stated in the contract.
Statute - provide protection to the party with the weaker bargaining position/power.
Courts - for example where parties failed to cover a particular matter, which if not remedied would make the contract unworkable.
Trade custom.
Terms implied by statute.
Sales fo goods act 1979 B2B contracts.
Section 12-15 SoGA 1979:
S12(1) – implied condition as to tittle.
S12(2)(a) & (b) – implied warranties as to freedom from encumbrances and quiet possession
S13 – implied condition that goods will correspond with their description.
S13 (2) & (3) – implied terms as to quality & fitness
S14(2) – implied condition that goods are of a satisfactory quality.
S14(3) – implied conditions as to fitness for purpose.
S15 – implied condition in sale of goods by sample.
differences between condition warranties and innominate terms
Condition - vital/major term.
Innominate term - depends on the seriousness of the breach as to how it is treated.
Warranty - ancillary/minor term.
Exemption clauses
Clauses contained in a contract which attempts to exclude/limit or restrict the liability of one of the parties.
Liabilities a party might try to exclude
Negligence.
Breach of expressed term.
Breach of implied term.
Misrepresentation.
Controls on exemption clauses
Common law rules - incorporation, interpretation & construction.
Unfair contract terms act 1977.
Some terms automatically ineffective under the act.
Some terms subject to the reasonableness test under the act.
Some terms subject to the fairness test under the act.
Exemption clause must be.
- Incorporated into the contract.
- Clearly expressed to cover the situation.
- Comply with unfair contract terms act 1977 and the consumer rights act 2015.
Olley v Marlborough Court Ltd 1949
The contract for a hotel room was made at the reception desk before O had been into the room
In the room there was a notice stating that the hotel owners were not liable for any articles lost or stolen unless handed to the manageress for safe custody.
A stranger entered the from and stole O’s furs.
Decision: O was not bound by exemption clause – it came after the contract was made.
Chappleton v Barry UDC 1940
C hired 2 deck chairs and received 2 tickets which he put into his pocket unread
Each ticket contained a clause exempting D from liability for injury
C was injured when the chair collapsed.
Decision: a reasonable man would assume the ticket was a mere receipt and not a contractual document which might contain conditions.
Unfair terms act 1977
Applies where both parties act in the course of a business
Applies to contractual exemption clauses and exemption clauses not forming part of a contract
Exemption clauses purporting to exclude liability for death or personal injury through negligence are invalid. Other exemption clauses are allowed provided they meet the test of reasonableness.
Consumer rights act 2015
Applies to all contractual terms in a consumer contract and consumer notices not forming part of a contract.
An unfair term is not binding on a consumer.
Exemption clauses purporting to exclude liability for death or injury through negligence are invalid. Other exemption clauses are allowed provided they meet the test of fairness.
