Chapt 4 - Contents Of A Contract

Question 1

3 types of statement in a contract..

Answer 1

Mere puffs as in Mead and Babbington 2007- not legally enforceable

Representations- precontractual statements intended to persuade the other party to contract. Misrep if not true
(Routledge v Mc Kay)

Terms- statements incorporated into the contract - can be express or implied and conditions,warranties and inmominate terms
Bannerman express✅
Birch oral✅

Question 2

The difference between representations and terms when something is not complied with

Answer 2

If it’s a term: can bring action for breach of contract and remedy. Only for breach of condition - if its warranty, must continue

If it is a representation: appropriate action is for misrepresentation under MA 1967 and remedy

Question 3

Factors distinguishing between terms and representations

4

Answer 3

The IMPORTANCE attached to the statement (Bannerman v White 1861)

Whether the statement has been reduced to WRITING. However Birch v Paramount Estates ltd 1956 is the exception as it was important

The TIMING of the statement (Routledge v McKay 1954)- not a term in this case

Whether parties had any SPECIAL KNOWLEDGE OR SKILLS (oscar chess ltd v Williams 1957/ Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd

Question 4

General rule re oral statements

And exception? (Which case?)

Answer 4

Usually representations rather than terms however if v important can be terms (Birch v Paramount estates)

Question 5

Express terms in a contract

2 factors that identify them

Answer 5

Agreed by the parties and not implied

Question 6

Implied terms in a contract

What does this mean?

Where can they be implied from? (3)

Answer 6

This means that they can be read into the contract

Implied terms can be incorporated into a contract via-
Statute- SgA / SGSA /CRA
Custom Hutton v warren
The courts - by law/policy - Irwin
Business efficacy -moorcock
Officious bystander - Shirlaw

Question 7

What is the difference between conditions and warranties?

Answer 7

Conditions- breach of which entitles the injured party to treat the contract as ended and claim damages (Poussard v Spires)

Warranties - breach of which entitles the injured party to damages only
(Bettini v Gye) as it’s an ancillary term

Question 8

Contractual terms are divided into:

Conditions and warranties

Answer 8

Condition- is of central importance to contract and if breached, innocent party can treat contract as over AND sue for damages

Warranty-a less important term. Injured party must continue with contract but can sue for damages

Question 9

Types of term

3

Answer 9

Conditions (poussard v Spires and pond)

Warranties (Bettini v Gye)

Inmominate (Hong Kong fir shipping )- court decide on cases by case basis

Terms can also be implied or express

Question 10

Explain how written terms (in particular exclusion clauses) may be incorporated into the contract.

4 main ways

What about onerous clauses?

Answer 10

incorporated by..
SIGNATURE: L’Estrange v Graucob (1934)
NOTICE: Olley v Marlborough Court Ltd (1949)
COUrSE OF DEALING: Hollier v Rambler Motors (1972);
COMMON UNDERSTANDING of the parties: British Crane Hire Corp Ltd v Ipswich Plant Hire (1975).
Onerous clauses must be drawn to the attention of the other party: Interfoto Picture Library v Stiletto Visual Programmes Ltd (1988).

Question 11

What is an exclusion clause ?

Answer 11

The term exclusion clause is used to refer to those terms that completely exclude any form of liability.

Question 12

What is the Parol evidence rule?

Answer 12

When a contract is in writing, oral evidence will not be allowed to alter or contradict what is written.

Evidence of what the parties did or said when they were making the contract cannot add to or change what is written down

Question 13

How terms are implied by statute sale of goods act 1979

In business contracts

**Use now for business to business or cons to cons NOT for trader to consumer ***

Answer 13

SGA 1979
S13 correspond with description
S14(2)satisfactory qual
S14(3) fit for purpose

Question 14

How terms are implied by statute: supply of goods and services act 1982

In business contracts

Which sections in which 2 parts of the Act

Superseded by CRA now for trader to consumer stuff

Answer 14

SGSA 1982,

Re goods transferred (part 1)

S3-must correspond to description
S4- satisfactory quality

Re supply of services (part 2)

S13-reasonable care and skill
S14-reasonable time
S15-reasonable charge

Question 15

What about the CRA 2015?

Part 1

Def of consumer

Def of trader

Need to tweak this question!!???

Answer 15

Consumer
An individual acting for purposes that are wholly or partly outside that individuals trade, business, craft or profession

Trader
Person acting for purposes relating to that persons trade, business, craft or profession, whether acting personally or through another person acting in the traders name or on a traders behalf

Question 16

Implied terms in consumer contracts (consumer rights act 2015)

Supply of goods

Digital content

Services

For trader to consumer (not cons-cons/ business- business)

Answer 16

Supply of goods :
S9 satisfactory quality,
s10 fit for purpose
s11 as described

Digital content:
s34 satisfactory quality
s35 fit for particular purpose,
s36 content as described

Services : s49 reasonable care/skill, s50 Info re trader/service to be binding, s51 reasonable price paid, s52 service within a reasonable time

Question 17

Explain how terms are implied by custom

What is the criteria?
(5)

Which case?

“where a particular term is prevalent in a trade the court may imply a term in a contract of the same type in that trade”

Answer 17

Implied by custom of location or trade practice.
-long duration?

• is it reasonable to imply the term?
• is it consistent with an express term?
• is such a term actually used in practice?
• would it be acceptable to the court?
  Hutton v warren 1836

Question 18

Explain how terms are implied by the courts

3 ways and 3 cases

Answer 18

By law As a matter of policy (Liverpool city v Irwin 1976

Business efficacy test (the Moorcock 1889)
-Implied only if “obvious and necessary”

The officious bystander test (Shirlaw v Southern Foundries 1926) “ oh of course”
-it must be obvious that parties would have agreed to it if asked by an officious bystander

Question 19

What are the 3 exceptions to the parol evidence rule?

Answer 19

Can use oral evidence to alter a written contact…

1. To show fraud/mistake
2. To establish that oral agreement was written down incorrectly
3. If agreement was clearly meant to be part verbal and part written

Question 20

Defintion of representation

Answer 20

Definition of a representation -

Statements normally made OUTSIDE the contract which may induce a party to enter into the contract but which do not constitute a term of the contract

. This can include ‘mere puffs’.

Question 21

Defintion of a Misrep

Answer 21

Untrue statement of FACT OR LAW made by one party to the other, INDUCING the other to enter the contract;

must be ACTUAL and REASONABLE RELIAnCE on the misrepresentation.

MUSt NOT be statement of opinion, intention or trade puff.

Question 22

When can silence etc amount to a Misrep?

4 ways and cases

Answer 22

Non-disclosure: silence does not normally amount to a misrepresentation but note-

i. Consumer Protection from Unfair Trading Regulations 2008;
ii. Half-truths: Nottingham Patent Brick &Tile Co v Butler (1866);
iii. Subsequent falsity: With v O’Flanagan (1936);
iv. Contracts of the utmost good faith; v. Fiduciary relationships; Voluntary assumption of responsibility.