Terms, Vitating Factors, Misrep, Economic Duress

Question 1

Define terms

Answer 1

What the parties have agreed between themselves and define their respective obligations.

If a term is break the contract will be breached

Question 2

Distinction between term and representations

Answer 2

Statements made before or at the time of a contract. Can turn into terms.

Question 3

4 rules of knowing if it’s a term or representation.

Answer 3

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

Question 4

Define condition with case

Answer 4

• 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

Question 5

Define warranty with case

Answer 5

• 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

Question 6

Define Innominate term with case

Answer 6

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

Question 7

Terms implied by common law
Case

Answer 7

POL: The court will imply a term into a contract if the term is necessary to make the contract effective.
THE MOORCOCK

Question 8

Bystander Test

Answer 8

Lord Justice McKinnon in the SHIRLAW & SOUTHERN FOUNDRIES described this as
…something so obvious it goes without saying.
Term so obvious it is included.

Question 9

Terms implied by custom or habit

Answer 9

HUTTON V WARREN
Term implied because it’s custom to do so.

Question 10

Terms implied because of prior conduct of contracting parties.

Answer 10

Parties to a contract have prior history of dealing on particular terms.
HILLAS V ARCOS

Question 11

Terms implied by statute

Answer 11

Terms which parliament has decided should automatically be included in all in contracts.
The consumer rights act 2015

Question 12

2 Vitiating factors

Answer 12

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

Question 13

If misrep occurs, victim has choice of

Answer 13

• continuing with contract
  */rescission
• damages

Question 14

4 factors needed to be a misrep

Answer 14

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

Question 15

Silence and misrep
(5)

Answer 15

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.

Question 16

False statement must be one of material fact.

Answer 16

Not opinion.
BISSETT V WILKINSON

Question 17

False statement must induce other party into contract

Answer 17

ATTWOOD V SMALL

Question 18

Types of misrep

Answer 18

• Fraudulent - intentionally lied
• Innocent - honest belief statement true
• Negligent - careless about truth of statement

Question 19

Fraudulent misrep

Answer 19

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

Question 20

Innocent misrep

Answer 20

Genuinely believes statement to be true.

Question 21

Negligent misrep

Answer 21

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

Question 22

Misrep act

Answer 22

Section 2(1) of misrep act
No need for any special relationship or proximity between the parties

Question 23

Rules of economic duress

Answer 23

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?

Question 24

Remedies for economic duress

Answer 24

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.

Question 25

Remedies for misrep

Answer 25

Rescission and on damages

Question 26

Remedy of rescission will not be available for misrep if:

Answer 26

1) Returning to the pre-contractual position is impossible
2) The contract is affirmed then innocent party loses right to rescind
LONG V LLOYD