Terms, Vitating Factors, Misrep, Economic Duress Flashcards
Define terms
What the parties have agreed between themselves and define their respective obligations.
If a term is break the contract will be breached
Distinction between term and representations
Statements made before or at the time of a contract. Can turn into terms.
4 rules of knowing if it’s a term or representation.
1) Importance attar bed to the statement
COUCHMAN V HILL
2) Special knowledge or skill of the party making the rep
DICK BENTLY V HAROLD SMITH MOTORS
3) The time between making the rep and the contract
ROUTLEDGE V MCKAY
4) Whether the agreement is including the statement in writing.
ROUTLEDGE V MCKAY
Define condition with case
- Term that goes to the heart of the contract
- Breach will have serious consequences
- if breached, innocent party have choice of repudiating or continuing contract.
POUSSARD V SPIERS & POND
Define warranty with case
- A warranty is a minor term of the contract.
- A breach of a warranty is only trivial, main purpose of contract still achieved.
- if breached, innocent party must continue with contract but can claim for damages.
BETTINI V GYE
Define Innominate term with case
Term that can be breached both trivially or seriously. Court will look at the consequences of the breach and then decide,
HONG KONG FIR SHIPPING
Terms implied by common law
Case
POL: The court will imply a term into a contract if the term is necessary to make the contract effective.
THE MOORCOCK
Bystander Test
Lord Justice McKinnon in the SHIRLAW & SOUTHERN FOUNDRIES described this as
…something so obvious it goes without saying.
Term so obvious it is included.
Terms implied by custom or habit
HUTTON V WARREN
Term implied because it’s custom to do so.
Terms implied because of prior conduct of contracting parties.
Parties to a contract have prior history of dealing on particular terms.
HILLAS V ARCOS
Terms implied by statute
Terms which parliament has decided should automatically be included in all in contracts.
The consumer rights act 2015
2 Vitiating factors
1) Misrepresentation - false statement said to ensure party joins contract.
2) Economic Duress - one party puts other under financial pressure and forged them into the contract.v
If misrep occurs, victim has choice of
- continuing with contract
*/rescission - damages
4 factors needed to be a misrep
1) A false statement
SPICE GIRLS V APRILLA WORLD SERVICE
2) Of material fact
3) made by a party to the contract
4) that includes the other party to enter into the contract
Silence and misrep
(5)
Silence cannot be a misrep
FLETCHER V KRELL
Silence can be misrep if statement is a half truth
DIMMOCK V HALLETT
Statement becomes untrue and party stays silent then misrep
WITH V OFLANAGAN
Contracts of utmost good faith, all material facts must be disclosed.
LAMBERT V CO OPERATIVE INSURANCE SOCIETY
If relationship of trust then representors silence may be misrep.
TATE V WILLIAMSON.
False statement must be one of material fact.
Not opinion.
BISSETT V WILKINSON
False statement must induce other party into contract
ATTWOOD V SMALL
Types of misrep
- Fraudulent - intentionally lied
- Innocent - honest belief statement true
- Negligent - careless about truth of statement
Fraudulent misrep
Intentionally lies about the fact or reckless as to its truth.
DERRY V PEEK
A statement is fraudulent if:
- representative made statement he knows to be untrue.
- which a made without belief in its truth or
- is reckless as to whether it’s true or not
Innocent misrep
Genuinely believes statement to be true.
Negligent misrep
Representative has been careless and has no reasonable grounds to believe the statement is true.
2 ways to action:
* common law fort of negligence - HEDLEY BYRNE
* misrep act 1967
Misrep act
Section 2(1) of misrep act
No need for any special relationship or proximity between the parties
Rules of economic duress
PAO ON V LAU YIU LONG
1) Did the person claiming to be cohered protest against the pressure?
2) Did that person have any other reasonable available course of action?
3) Where they independently advises before they took the action?
4) After entering into the contract did they take steps to make the contract void?
Remedies for economic duress
Restitution, restores a person to the position he or she would have been in if not for the other.
Courts can order for the restitution of property or money extracted under such duress and the avoidance of any contract that has been induced but it.
Remedies for misrep
Rescission and on damages
Remedy of rescission will not be available for misrep if:
1) Returning to the pre-contractual position is impossible
2) The contract is affirmed then innocent party loses right to rescind
LONG V LLOYD
