Chapter 40 - Terms Flashcards
Distinction between a term and a representation
-If a term is not observed, there can be a claim for breach of contract
-If a representation is untrue, the remedy is for misrepresentation
What is classed as a term of the contract
-Where the statement is obviously important to the contract, it will be seen as a term of the contract. Couchman v Hill
Special knowledge from the seller
Important to note whether the seller had special knowledge when they sold the item.
Oscar chess v Williams - Statement not a term as seller genuinely made a mistake
Dick Bentley v Harold Smith Motors - Salesmen knew it was a lie, so was a term of the contract
Delay between the negotiations and making of the contract
Where statements are made during negotiations, they may not be taking as a term if the making of the contract is a long time after negotiations
Routledge v McKay
Terms in written contracts
Courts will presume that everything the parties wanted to include as a term of the contract is put in writing
Express terms
Express terms are words agreed by the parties to be incorporated in their contract. They are terms which are written in a contract. Can be written and oral express terms
Implied terms
Terms can be implied into the contract by the common law or by statute. Statutory implied terms are contained in different acts such as the consumer rights act 2015
Terms implied by common law
Terms can be implied by common law in two ways:
1 Through business efficacy and the officious bystander test
2 By custom or prior dealings between the parties
Business efficacy
Courts will imply a term into a contract if the term is necessary to make sure that the contract works on a business like basis.
Two part test:
1. Is the term necessary to make the contract effective
2. if the parties to the contract had thought about it, would they have agreed that the suggested term was obviously going to be in the contract.
Business efficacy seen in the case of, The Moorcock
Genuinely implied terms
Are what a reasonable person would have understood to be the intention of both parties in the contest of the contract.
Seen in Egan v Static Control Components Ltd
How should implied terms be judged ?
Marks and Spencer plc v BNP Paribas Securities Supreme Court
-Implied terms should be judged objectively to the nominal reasonable person would agree to
-Fairness and acceptability to the parties are not enough to imply a term
Terms implied by prior dealings between the parties
The prior conduct of the parties may indicate terms to be implied
Shown in Hillas v Arcos
