Terms of Contract

Question 1

express term

Answer 1

a contractual term specifically stated to be part of the contract

Question 2

implied term

Answer 2

a term which was not specified in the contract, but may be implied into it by statute or common law

Question 3

condition

Answer 3

crucial to the contract; if breached innocent party may refuse further performance and sue for breach

most important terms (things that are mandatory)
breach of condition gives injured party the right to refuse further performance

Question 4

warranty

Answer 4

a minor contractual term; breach of which entitles the innocent party to damages

not vital to the performance of the contract
breach of warranty, injured party can only be compensated

Question 5

Innominate Term

Answer 5

term not name or classified

Question 6

Types of terms

Answer 6

conditions
warranties
innominate

Question 7

exclusion clause

Answer 7

term which attempts to limit or exempt a party’s contract against another

Question 8

Sources of implied terms (3)

Answer 8

statue, trade custom and practice, business efficacy

Question 9

Statute

Answer 9

Sale of Goods Act 1979

• protects consumer by implying certain terms concerning the standard and quality of goods
• seller is in breach even if he expressed it to the buyer

Question 10

Trade custom and practice

Answer 10

ex. any damage done to the crane during rental is financial responsibility of the hirer, not owner

Question 11

Business efficacy

Answer 11

when a contract lacks a general term so obvious that the parties are considered to have intended to include it

Question 12

limitation clause

Answer 12

term which seeks to restrict the amount of damages payable to the innocent party in the event of a civil action

Question 13

for a term to be incorporated two things are important

Answer 13

timing and sufficiency

Question 14

timing

Answer 14

term excluding liability must be notified to the other party before acceptance

Question 15

sufficiency

Answer 15

clause will generally not be binding unless the offeror has taken reasonable steps to draw it to the customers attention

• can not be misled about scope
• does not cover signed documents

Question 16

fundamental breach

Answer 16

so serious that it completely defeats the entire object of the contract

Question 17

standard terms

Answer 17

terms on which a business always trades and are not open to negotiation

Question 18

Unfair Contract Terms Act

Answer 18

• to protect consumers
  Cannot exclude:
  1. Death or personal injury due to negligence
  2. Negligence liability for damage to property may be excluded if reasonable
  3. Liability for breach of contract may not be excluded if on standard terms

Question 19

Unfair term in consumer contracts regulations

Answer 19

protect consumers who entered a contract with a non-negotiable term imposed by the seller, deemed to be unfair