Week 5: Introduction to Contract Terms

Question 1

Which case highlights that when negotiating the terms of a contract regardless of whos terms the parties are contracting on; if there is a firm offer and a firm acceptance then there is consensus in idem.

Answer 1

Uniroyal Ltd v Miller & Co

• Buyer places purchase order (Using buyer’s standard terms)
• Seller acknowledges this by sending their pwn standard form
• Seller delivers goods to buyer
• Buyer accepts delivery

Question 2

Provide the name and details of the case which highlights that when negotiating terms of a contract receipts, notices of deliveries and other such records cannot be considered contractual terms?

Answer 2

Continental Tyre & Rubber Co Ltd v Trunk Trailer

• Buyer places order for tyres (using their own standard terms)
• Seller delivers goods without any written acceptance , but delivery note and subsequent invoice containing different terms to that set out by the buyer

Question 3

Which express term negates all subsequent addition of terms; orally or otherwise.

Answer 3

Entire agreement clause.

Question 4

What are the seven common express terms?

Answer 4

1. Force Majeure
2. Entire Agreement
3. Exclusion clause
4. Liquidated damages / penalty clause
5. Restrictive covenant
6. Arbitration
7. Jurisdiction

Question 5

Which clause specifies which court will hear any potential dispute?

Answer 5

Jursistiction clause

Question 6

Which clause requires parties to resolve disputes through arbitration?

Answer 6

Arbitration clause.

Question 7

Which clause releases one or both parties from their contractual obligations if an unforseen event outside of their control occur (An act of God)?

Answer 7

Force Majeure

Question 8

Which clause restricts what can be done with property or land or the behaviour of an ex-employee.

Answer 8

Restrictive covenant

Question 9

Which clause specifies a um of money to be paid by one party to another if the contract is breached?

Answer 9

Liquidated damages / penalty clause.

Question 10

What is the distinction between liquidated damages and a penalty clause.

Answer 10

Proportionality.

Question 11

Which clause limits a parties liability in the event of a breach of contract.

Answer 11

Exclusion clause.

Question 12

In which case was this judgement given?

• ‘The purpose of an entire agreement clause is to preclude a party to a written agreement from threshing through the undergrowth and finding in the course of negotiations some (chance) remark or statement (often long forgotten or difficult to recall or explain) on which to found a claim…’

Answer 12

Anwar & Anwar v Britton & Barclay.

Question 13

In circumstances where there is no entire agreement clause, how does the Application of Contract (Scotland) Act 1997 provide for interpreting the contract?

Answer 13

• A presumption that the contract contains within it all the express terms (s. 1 (1))
• Extrinsic terms will be included (oral agreements subsequent to original agreement) (s. 1 (2))