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Contract Law > u4. Sources and Interpretation > Flashcards

u4. Sources and Interpretation Flashcards

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1
Q

What are the 3 types of Pre-Contractual Statements?

What is their legal affect?

A
  1. Term - Enforceable as part of the contract
  2. Representation - Seperate to the contract, but has legal affect
  3. Puff - No legal Affect
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2
Q

What is a pre contractual term?

A

A precontractual statement that contains a promise that something is true, which becomes part of the contract, and so enforceable

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3
Q

What is a pre-contractual representation?

A

A precontractual statement that is not a promise that something is ture, but induces the party to enter into the contract and so has legal affect

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4
Q

What is a pre-contractual puff?

A

A extravagant statement (often found in advertisement) that a reasonable person would recognise as not intended to have legal consequences. Puffs have no legal affect

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5
Q

How do you determine a statement is a Puff?

A

A reasonable person would not take such terms littery, and would recognise them as not intended to have legal consequences.

Such statements are usually extravagant or flippant such as a funfair ride ad saying ‘Guaranteed to Scare your Socks Off’

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6
Q

What is the legal test for a term?

A

If on an objective analyse of all evidence, it is detrmined the representor INTENDED to make a CONTRACTUALLY BINDING promise that the statement was true, and for that statement to be included in the contract.

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7
Q

What is the legal test for a representation?

A

The Court will consider whether the representor INTENDED the statement to INDUCE the party to enter into the contract

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8
Q

What is the 4 common law tests the Courts will consider secondary to establish if a statement is a term or representation

A
  1. Did the representor have special knowledge ? (Yes = Term, No = Representation)
  2. Importance Attached (Did the representor know the representee would have not entered the contract but for the statement?) (Yes = Term, No = Representation)
  3. Did the representor assume responsibility for the statement? (Yes = Term, No = Representation)
  4. Did the representor advice the representee to verify the statement? (Yes= Representation, No = Term)
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9
Q

What are the 3 secondary tests the Courts will consider when determining if a statement is a term or representation?

A
  1. Common Law Tests
  2. The Parol Evidence Rule
  3. Statute
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10
Q

What is the diffrence between a term and a representation?

A

A term is something that is a intended to be apart of the contract, and so is enforceable as part of the contract.

A representation is something that was intended to induce someone to enter into the contract. It is not part of the contract, but has legal affect.

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11
Q

What is the affect of a Contract being in writing when establishing if a pre contractual statement is a term or a representation?

A

If the contract is in writing, it will be assumed that all terms are included within the contract.

The Parol Evidence Rule

Is rebutable

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12
Q

What is the effect of the time passed between a pre contractual statement and entering of a contract?

A

The longer the time between, the more likley it will be found the statement is not a term.

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13
Q

What is the Parole Evidence Rule?

A

A rebutable presumption that where the contract is in writing, only the terms actually in the contract are terms.

Some contracts also contain entire agreement clauses, which have the same affect.

The parole evidence rule does not stop implied terms.

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14
Q

What remedies are avaliable where a pre-contracutal statement is found to be an untrue representation?

A
  1. Rescing the Contract
  2. Damages if fraudulent or negligent misrepresentation
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15
Q

What remedies are avaliable if a pre-contractual statement is found to be a term and is not peformed?

A
  1. Termination or Affirmation of the Contract
  2. Damages for all loses incurred that were within reasonable contemplation of both parties at the time of contracting
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16
Q

What are the 3 ways terms can be implied into contracts?

A
  1. By the Courts

2.By Custom

  1. By Statute
17
Q

What are the 2 grounds Courts can imply terms into contracts?

A
  1. Terms implied in Law
  2. Terms implied in Fact

(Both are terms that are necessary for the Contract to work)

18
Q

What are the 2 tests for implying a term in Fact?

A
  1. The Officious Bystander Test - Would a Bystander Agree wholeheartedly that the term should be included?
  2. The Business Efficacy Test - Would the contract function objectively as the parties intended without the test?
19
Q

When can terms be implied into a contract by statute?

A

Terms may be implied by known customs and practices of particular industries or markets, provided it does not conflict with the express terms of the contract.

20
Q

What statue implies terms into consumer contracts?

What satutue implies terms into Business 2 Business Contracts?

A
  1. The Consumer Rights Act
  2. The Sales of Goods Act
21
Q

What 9 terms are INCLUDED by the Consumer Rights Act?

A
  1. Goods are of satisfactory Quality
  2. Goods are reasonably fit for any particular purpose the consumer makes known to the trader b4 buying
  3. Goods match description
  4. Goods match the sample
  5. Goods will match the model
  6. Correct Installation
  7. Digital content must conform to the contract
  8. Services should be performed with reasonable care and skill
  9. Services should be performed within a reasonable time
22
Q

What 5 terms are Implied by the Sales of Goods Act?

A
  1. The Seller has the rights to sell the goods
  2. The goods correspond with their description
  3. Goods are of satisfactory quality - UNLESS POINTED OUT OR SHOULD HAVE BEEN REVEALED WHEN BUYER EXAIMEND GOODS B4 BUYING
  4. Goods should match the sample
  5. The supplier will carry out the service with reasonable care and skill
23
Q

How to Courts Interpret clear Contract Terms?

A

If the terms are clear, the court will interpret them through that they see as the viewpoint of a reasonable person without looking at the commercial context.

This is sometimes referred to as the 4 corners approach, only looking at what is written.

24
Q

How to Courts interprert Unclear or Ambiguous Terms?

A

If the terms are Ambiguous or Unclear, the courts may use commercial common sense to interpret the contract in a way they see as the aim of the contract, considering business common sense.

Contract Law (4 decks)

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