Contents (Express and Implied terms) Flashcards
Which three ways can a term be incproapted into a contract?
Signautre;
Reasonable notice before or at the time of the contract
Previous consistent courses of dealing between the parties.
What is incporoation by signature?
The rule that where a part signs a contrast, they are bound by the terms within the contract (unless hey contradict statutory controls, or do not form a proper contract/ can overridden by a common law or statuary control).
What is the general rule for incorporation by reasonable notice?
If terms are contained in a notice at the point of sale or transaction (or are on the back of a ticket for example) then the party wanting to rely on these terms have to have given reasonable notice at or before the time of the contract.
List the factors the court will take into account t in deciding whether or not realisable notice has been given.
- nature of the document;
- timing;
- onerous terms;
- whether the exemption is legible;
- if terms are on the back of the document, does the front of the document indicate as such (eg see terms on back).
Explain how the nature of the document may mean reasonable notice is not deemed given.
The court will assess whether the document is one on which a reasonable person would expect there to be contract terms.
Eg a receipt would not be expected to have contractual terms on, as a reasonable person would presume this is receipt of payment.
How does timing affect whether or not reasonable notice has been given?
The notice of the term which is incorporated MUSt be com united either prior to the contract or at the time of the contract.
A term contained in an invoice after the event is not sufficiently incorporated.
What is an onerous term and when will it affected the validity of the term?
Onerous terms are terms which impose a substantial fine if a particular condition is not met.
The rule is the more onerous a term is, the more a party must do to bring it to the other party’s attention.
Explain incorporation by previous consistent course of dealing.
For terms to be incorporated this way, parties must have had a lot of rebular dealings in the past which were all on exactly the same terms and conditions. .
If an invoice is provided after every course of dealings this will not negate the previous course of dealings, provided the dealing have been consistent and on the same terms.
Would 4/5 dealings in the space of 5 years be sufficient to count as previous course of dealings?
No.
Explain which type of term has to be breached for termination of the contract to be possible
Breach of a condition.
What are the three types of terms?
Innominate terms;
Warranties;
Conditions.
Explain what is meant by a judicially recognised term.
Some terms in certain inductors are recognised as conditions by the courts regardless of how they are labelled (eg the term ‘expected ready to load’ in a charter contract to hire a ship is always a condition).
What are the remedies available for breach of a condition?
Termination of future performance under the contract and damages.
How is it determined whether a term is a condition or a warranty?
Just because a term is labelled as a condition, does not mean it is.
Important to look at the circumstances to determine whether the parties meant the term to be a condition (especially where drafted by non-lawyers).
What happens if the breach of a term is so slight, termination would seem unreasonable in the circumstances?
The new approach of the court is taken, where courts will instead examine the effect of the brush in oder to determine whether the term was indeed a condition or a warranty.
Explain the modern approach of the courts.
If in doubt as to whether the term is a condition or a warranty, or the effect ion a breach of the condition is so slight it would not be realisable to warrant termination of the entire contract, the courts will likely choose to look at the effect of the breach to determine what the term was.
What are the four categories of implied term?
- Terms implied by custom;
- Terms implied by in law;
- Terms implied by statute;
- Terms implied in fact.
Explain terms implied by custom.
Term may be implied if it reflectors the well-known and legacy binding customs of a particular trade.
Note such a term is not implied by custom if it would contradict an express term of the contract.
Explain terms implied by fact.
Term is implied into a contract where parties have not expressly agreed something, but the contest would be unworkable without the relevant term.
Effectively, a term will be implied if it is needed to make commercial sense of their contact (ie something so obvious it goes without saying).
Explain terms implied by law.
Where terms are implied because the law regards it as necessary for the particular type of contract.
Eg employment contacts impose an implied duty on the employer to provide healthy and safe environment for the employee to work in, and a duty on the employee to provide honest and loyal service.
List the statutory implied terms under the sale of goods act (SGA 1979), which are implied into business to business contacts for the sale and supply of goods and/por services.
12(1) - implied term seller has right to sell the goods;
13(1) - goods must correspond with description;
14(2) - goods must be of satisfactory quality;
14(3) - where seller sells goods in their courses of business, and buyer makes known to the seller any particular purpose the goods are being bought for, implied term is included ensuring goods supplied are reasonably fit for that purpose (unless it is unreasonable for the buyer to rely on the skill and judgement of the seller, or decides not to rely on the judgment of the seller).
How is it determined whether goods are of satisfactory quality (pursuant to SGA 1979)?
14(2A) goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price and all other relevant circumstances.
Are the implied terms under the SGA 1979 conditions or warranties?
Sections 12,13 and 14 of SGA 1979 are all conditions and impose strict liability (liability does not depend on the fault of the seller).
This means buyer can reject the goods, obtain a refund and claim damages.
In what circumstances can a buyer not reject the goods where s12, 13 or 14 SGA 1979 has been breached?
1) where buyer has accepted the goods (eg kept the goods beyond a reasonable time without seeking to reject them); or
2) in relation to s13 and s14, where the breach is so slight it would be unreasonable to reject the goods.