Chapter 4 - Contents of Contract

Question 1

Terms

Answer 1

Express - clearly discussed, stated & agreed
or
Implied - not expressly included in the contract but statute or by custom

Question 2

Judicial Checklist Term or Representation

Answer 2

Timing of the statement - Routledge v McKay

Importance of the statement - Bannerman v White (1861)

Special knowledge or skill

Reduction into writing - putting statement into words - Birch v Paramount Estates

Question 3

Bannerman v White (1861)

Answer 3

Importance of the statement

Hint: Hops

Question 4

Birch v Paramount Estates Ltd (1956)

Answer 4

Reduction into writing

HInt: Showhouse

Question 5

Routledge v McKay [1954]

Answer 5

Timing of the statement & circumstances at the time (time from representation to contract)

Hint: motorbike age

Question 6

Oscar Chess Ltd v Williams [1957]

Answer 6

Special Knowledge or Skill

Hint: car age - seller no skill

Question 7

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965]

Answer 7

Special Knowledge or Skill

Question 8

Representations

Answer 8

TBC

Question 9

mere (or advertising) puffs

Answer 9

TBC

Mead v Babington

Question 10

Mead v Babington
Not carhill

Answer 10

mere (or advertising) puffs

Question 11

Express Terms

Answer 11

Terms which are expressly agreed by the parties
Incorporated by express reference
Express terms can be:
entirely written;
entirely oral;
partly written and partly oral
Includes exclusion clauses – clauses which look to exclude or limit liability

Question 12

Implied Terms

Answer 12

Terms which are not expressly agreed by the contracting parties
Usually parties expressly agree the terms of a contract however it is possible to overlook or omit to include key obligations
Implied terms may be incorporated into the contract to deal with the parties omissions

Terms can be implied into the contract in the following ways:

Custom/Trade Usage
Statute
Common Law

Question 13

Exclusion clauses

Answer 13

In order for an exclusion clause to be valid it must be properly incorporated into the contract
Exclusion clauses can be incorporated in the following ways:
Signed documents
Notice
Consistent course of dealing

Question 14

Curtis v Chemical Cleaning & Dyeing Co (1951)

Answer 14

Written Clause in Signed Document
General rule – clause will be incorporated whether or not the other party is aware of it or read it

Hint: Wedding dress - oral assurance

Question 15

L’Estrange v Gracoub [1934]

Answer 15

Written Clause in Signed Document

General rule – clause will be incorporated whether or not the other party is aware of it or read it

Question 16

Incorporation via Notice

Answer 16

Document must be an integral part of the contract
Document must be a type likely to contain contractual terms
Reasonable steps must have been taken to ensure that the notice was available / brought to attention of the party before entering contract

Question 17

Thornton v Shoe Lane Parking Ltd [1971]

Answer 17

Incorporation via Notice

Hint: Car park - on notice inside - fail

Question 18

Olley v Marlborough Court Hotel Ltd [1949]

Answer 18

Notice of terms, in room after payment

Question 19

Parker v South Eastern Railway (1877)

Answer 19

Sufficient notice of terms
notice within cloakroom, SER not responsible for deposits > £10. tickets given on making their deposit had the same notice printed on it. SER appealed & sufficient notice given.

Question 20

Chapelton v Barry UDC [1940]

Answer 20

Incorporation via Notice

Hint - deckchair - on back of ticket - fail

Question 21

Spurling v Bradshaw [1956] (oj)

Answer 21

Term incorporated by
Previous Course of Dealings

Question 22

Previous Course of Dealings

Answer 22

Other party may be aware of the clause as a result of previous dealings
Must be a consistent course of dealings and document must be the type expected to contain such clauses

Hollier v Rambler Motors (1972)

Question 23

Hollier v Rambler Motors (1972)

Answer 23

Not sufficient course of dealings
claimant had used defendant garage on 3-4 occasions over a five year period

Question 24

Implied Terms: Statute

Answer 24

Terms may be implied to protect certain types of contract
E.g. Consumer contracts; employment contracts; etc.
Sale of Goods Act 1979
Consumer Rights Act 2015

Most statutory implied terms are implied into the contract to protect certain types of parties from being at a disadvantage as against other parties who may be in a stronger bargaining position

Question 25

Sale of Goods Act 1979

Answer 25

B-2-B s14(2) satisfactory quality s14(3) fitness for purpose s13 description

Question 26

Sale of Goods and Services Act 1982

Answer 26

B-2-B s4 satisfactory quality / fit for purpose s3 description s13 reasonable care and skill s15 reasonable price s14 reasonable time

Question 27

Consumer Rights Act 2015

Answer 27

``` B-2-C GOODS: s9(2) satisfactory quality s10 fitness for purpose s11 description ``` ``` SERVICES s49 reasonable care and skill s50 ... s51 reasonable price s52 reasonable time ``` ``` DIGITAL s33(1) price s34 satisfactory quality s35 fitness for purpose s36 description ```

Question 28

Implied Terms: Custom

Answer 28

Terms may be implied into a contract by custom if there is evidence that under local custom they would normally be in the contract Hutton v Warren (1836))

Question 29

Implied Terms: Trade Usage

Answer 29

Terms may be implied by trade usage where a term would routinely be part of a contract in a particular trade or business Note: only relevant to certain types of contract e.g. commercial “It has long been settled that…extrinsic evidence of custom and usage is admissible to annex incidents to written contracts, in matters with respect to which they are silent.” British Crane Hire Corp Ltd v Ipswich Plant Hire

Question 30

Hutton v Warren (1836))

Answer 30

Implied Terms: Custom Hint plant seed payment - local custom - won

Question 31

British Crane Hire Corp Ltd v Ipswich Plant Hire

Answer 31

Implied Terms: Trade Usage Sinking crane

Question 32

Onerous Clauses

Answer 32

Onerous clauses must be drawn to the attention of the other party. Interfoto Picture Library v Stiletto Visual Programmes Ltd (1988)

Question 33

Interfoto Picture Library v Stiletto Visual Programmes Ltd (1988)

Answer 33

Onerous clauses Late charges -on back of receipt & not brought to attention = fail

Question 34

Implied Terms: Common Law

Answer 34

A contract may also contain terms which have been judicially implied into it Terms implied by the courts at common law may be separated into two types: Terms implied as a matter of fact Terms implied as a matter of law

Question 35

Implied Terms:Matter of Law

Answer 35

Obligations which arise irrespective of the parties’ intentions or the facts of the particular case Implied as a matter of policy Objective Test Applies! Term must be a ‘reasonable’ one to imply Must be a necessary incident of the particular type of contract Liverpool City Council v Irwin [1976]

Question 36

Liverpool City Council v Irwin [1976]

Answer 36

Implied Terms:Matter of Law Flats - implied term to look after common areas - fail

Question 37

Implied Terms:Matter of Fact

Answer 37

Based on parties’ intentions Implied due to parties’ omissions Courts gives effect to the unexpressed will of the parties But is always imputed from the presumed intentions How do the courts determine the intentions of the parties’? Two tests developed by the courts to ascertain the parties’ intentions: The Business Efficacy Test The Officious Bystander Test

Question 38

The Business Efficacy Test

Answer 38

Term must be obvious and necessary to give business efficacy to the parties’ agreement Liverpool City Council v Irwin: “the court must be able to say that the insertion of the terms is necessary to give…business efficacy to the contract and that if its absence had been pointed out at the time both parties…would have agreed without hesitation to its insertion.” Lord Cross The Moorcock (1889)

Question 39

The Officious Bystander Test

Answer 39

Something which is so obvious that it goes without saying Shirlaw v Southern Foundries Ltd [1939] Term is only implied if the contract would be incomplete without it Term must be strictly necessary Term must have been intended by both parties

Question 40

The Moorcock (1889)

Answer 40

The Business Efficacy Test Unload ship low tide - ship would not be damage term implied and contract useless if not implied

Question 41

Shirlaw v Southern Foundries Ltd [1939]

Answer 41

The Officious Bystander Test It goes without saying.

Question 42

Importance / Status of the Terms - what 3 ways can terms be classified

Answer 42

Terms can either be classified as: Conditions Warranties Innominate Terms

Question 43

Condition

Answer 43

A major term of the contract An obligation, the performance of which goes to the root of the contract Breach = right to terminate the contract and claim damages Poussard v Spiers (1876)

Question 44

Poussard v Spiers (1876)

Answer 44

Condition Singer & understudy - condition of the contract -fail

Question 45

Warranty

Answer 45

A minor term of the contract An obligation, the performance of which does not go to the root of the contract Breach = claim for damages Bettini v Gye (1876)

Question 46

Bettini v Gye (1876)

Answer 46

Warranty rehearsal seen as a warranty not condition - not enforceable, but damages

Question 47

Innominate Term

Answer 47

An intermediate term Term is neither a condition or warranty Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962]

Question 48

Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962]

Answer 48

Innominate Term seaworthy ship - look at the consequences of breach