Terms of a contract Flashcards
Name and explain the case authority of objective criteria - Intention of contractual liability in respect of statement’s accuracy - to distinguish mere representation from a binding contractual term.
Did the parties intend that there should be contractual liability in respect of the accuracy?
Heilbut, Symons Co v Buckleton (1913) - Buckleton wanted to buy shares in a company and called Heilbut, Symons Co. Manager of Heilbut Symons gave advice (mere representation) by stating that the company Buckleton wanted to buy shares from anyway, was about to build rubber plantations.
When the manager made the statement he did not intend to be bound by it, he only supplied information.
Name and explain the case authority of objective criteria - special expertise and inducement - to distinguish mere representation from a binding contractual term.
Did the party making statement have special expertise?
- Oscar Chess Ltd v Williams (1957) - Party did not have special expertise and provided mere representation of wrong model year of a car.
BUT:
- Dick Bentley Ltd v Harold Smith (1965) - Promisor had special expertise as a car dealer and customer was looking for a low mileage engine
The statement also induced the contract.
Name and explain the case authority of objective criteria - “As far as the vendor knows” - to distinguish mere representation from a binding contractual term.
- A statement which follows a term such as: “As far as the vendor knows” is a mere representation. The vendor intended not the be bound upon the statement. - Gilchester Properties Ltd v Gomm (1948) - Description of a house
Name and explain the objective criteria - “Statements made close to the agreement” - using case authority to distinguish mere representation from a binding contractual term.
Statements close to the agreement are likely to constitute terms
-
Van den Esschert v Chappell (1960) - close to the agreement the seller made a statement that the house had no infestation with termites (contractual term)
BUT:
Routledge v McKay (1954) - a week before contractual formation, seller declared wrong age of motorcycle and buyer had time to assure himself (mere representation)
Name and explain the objective criteria - stipulation of importance of a term - using case authority to distinguish mere representation from a binding contractual term.
Where a party claims the importance of a contractual term, the stament made becomes a term of the contract
-
Bannerman v White (1861) - buyer made it clear that he does not want hops that was made using sulfur in the production. Nevertheless, White used Sulfur in the production and therefore the defendant was in breach as to terms of the contract.
Name and explain the objective criteria - statements recorded in writing - using case authority to distinguish mere representation from a binding contractual term.
Statements recorded in writing are evidence for them being intended to constitute contractually binding terms.
-
Oscar Chess Ltd v Williams (1957)
Name and explain the objective criteria - statements which suggest not to be terms in agreements - using case authority to distinguish mere representation from a binding contractual term.
Statements may be terms even if the agreement suggests otherwise
-
Couchman v Hill (1947) - the claimant, Couchman, wanted to buy a cow at an auction which he wanted not to be pregnant. The defendant, Hill, said the cow was not pregnant. This induced Couchman to buy the cow. The signed, written contract stated that everything said by the auctioneer, the auction house or the seller would not be liable for the statements.
Court held that the statement induced the claimant to purchase the cow and therefore it was a binding term.
Name and explain the objective criteria - Rebuttal of intention to be bound - using case authority to distinguish mere representation from a binding contractual term.
Where intention to be bound upon a statement is shown it can be rebutted
-
Dick Bentley v Harold Smith (1965) - A maker of a statement can rebut the inference of a representation even though it induced the other party to engage in the contract if he can show that he was in fact innocent of fault in making it and it would not be reasonable in the circumstances to be bound by the representation.
Name and explain the doctrine of express terms using case authority
Express terms are terms are binding statements, expressed by the parties.
The Problem is what was said not what was meant.
-
Thake v Maurice (1986) - Claimants, Thake, wanted a vasectomy to be completed by Maurice. Maurice said it was an irreversible procedure. Ms Thake got pregnant again and sued Maurice. Court held, Maurice did not breach contract because the statement of irreversibility did not constitute a guarantee that she would not be pregnant again.
Name and explain the doctrine of express terms using case authority
Implied Terms are terms that are not expressed by the parties but meant but meant by the parties in unexpressed ways.
Courts imply such terms into the contract
-
But it is important to consider that courts will not make a contract for the parties or improve it. They only imply terms where it is found necessary to give the contract efficacy or if the parties must have intended that term to form part of their contract.
Trollope & Colls Ltd v North West Metropolitan Regional
Explain the Method of - implied terms by fact - using case authority
Where a term is essential to give a contract business efficacy it is implied by court (business efficacy test):
The Moorcock (1889) - Jetty owners leased the jetty to the ship owners to unload the ship. Damage was caused at the Jetty but their contract didn’t include terms about liability for damage. As there is a contract they guarantee to dock the ship there is safe, so they were held liable.
Southern Foundries (1926) Ltd v Shirlaw - Shirlaw was managing director of Southern Foundries which was took over by new owners. They decided to dismiss Mr Shirlaw. The Court held their contract implied a term that Mr Shirlaw’s employment contract would not be altered by the change in the company constitution.
Explain what term was implied by fact in the case of
Liverpool City Council v Irwin (1977)
and
Wong Mee Wan v Kwan Kin Travel Services Ltd (1995)
Liverpool City Council v Irwin (1977) - Court implied the term that the landlord was reposible to repair all areas even those that were not expressed in the contract.
Wong Mee Wan v Kwan Kin Travel Services Ltd (1995) - Child drowned. Court implied a term into the contract that the responsibility for third parties rested on the travel agency.
Explain the Method of - implied terms by custom - using case authority
Terms can be implied if particular conduct is required in a certain area or profession
Hutton v Warren (1836) - court implied that the landlord had to compensate for the arable farm his tenant was working on when the lease expired.
Explain the Implied Terms by Custom Test using relevant case authority
For a custom to lead to an implied term, the custom must be certain, notorious and reasonable
Cunliffe Owen v Teather and Greenwood (1967) - A stockbroker exceeded his authority and employment contract did not allow stockbroker what he had done, but what he did was usual practice in the business so the term was implied by court.
What happens if an implied term and an express term contradict?
Implied terms can not contradict an express term
If parties expressly agree different terms they can overcome the customary terms - Les Affreteurs Reunis v Leopold Walford (1919)
But:
Terms can also be implied by statute e.g.:
Sale of goods act would uphold the warranty even if a seller would expressly state he is not giving a warranty on a good.
