Contents of a contract

Question 1

Express terms - contract is in writing

Answer 1

Statements are terms. Statements made before are representations. Can sometimes rely on oral promises but only if the contract is partly oral, partly in writing and partly by conduct.
Entire agreement clause will prevent a party from attempting to rely on additional oral terms

Question 2

Express terms - contract is signed

Answer 2

Where a written agreement is signed, the parties to it are considered to be in agreement with everything it contains even if they have not read it

Question 3

Express terms - importance of the statement

Answer 3

The greater the importance the more likely it is to be considered to be a term.
If the party would not have entered into the contract if the statement is highly likely to be considered a term

Question 4

Express terms - reliance of specialist knowledge and skill

Answer 4

Where one party relies on a statement made with specialist knowledge the statement may be considered a term

Question 5

Express terms - timing of the statement

Answer 5

Where there is a significant lapse in time between the statement made and the formation of the contract - more likely to be a representation

Question 6

Express terms - Parol Evidence Rule - General rule

Answer 6

Where a contract has been reduced to writing, extrinsic evidence is inadmissible to add to, vary or contain everything upon which the parties agreed and anything that is not embodied in the contract is considered never to have been intended to be included.

Question 7

Express terms - Parol Evidence Rule - Exceptions

Answer 7

Exceptions:
- Was not intended to be the whole contract on which the parties had actually agreed - parol rule is admissible
- May be given to determine the validity of the contract
- Can be used to show that the contract does not yet operate or that it has ceased to operate

Question 8

Classification of terms - effects

Answer 8

• Breach of any terms gives the other party the right to claim damages
• Breach of some terms normally gives the other party the right to terminate the future performance of the contract
• The party terminating can claim damages if there is additional loss

Question 9

Classification of terms - conditions

Answer 9

Major term. Root of contract. Most important terms. Objective test - deciding the importance of the term which has been broken at the time the contract was made, instead of looking at the effects of the breach and the loss or damage which has resulted from the breach. Breach allows claimant to access all remedies. Can terminate future performance of contract.

Question 10

Classification of terms - warranties

Answer 10

Less important terms. Objective test - deciding the importance of the term which has been broken at the time the contract was made, instead of looking at the effects of the breach and the loss or damage which has resulted from the breach. The contract may be able to continue after breach. Limited to damages only. Cannot terminate

Question 11

Classification of terms - innominate terms

Answer 11

‘Wait and see’ approach. The courts look at the effects of the breach on the injured party to determine whether the breach itself was a condition or warranty. Necessary to wait until the breach of contract has occurred yo decide whether the innocent party should be allowed to terminate the future performance of the contract

Question 12

Implied terms - Implied by fact

Answer 12

Reflect the presumed intentions of the parties. 2 tests:
- Business efficacy test - the court should consider whether a term is necessary to make the contract work commercially
- Officious bystander test - a term could only be implied if the point was so obvious that it went without saying that that was what the parties intended

Question 13

Implied terms - implied in law

Answer 13

Implied because of the type of contract. Where a contract is of a kind which frequently occurs the court may identify provisions which are typical of that kind of contract and say that these provisions will be implied terms unlike the parties make contrary provisions. Tenancy agreements and employment contracts

Question 14

Implied terms - implied by local custom and trade

Answer 14

Form the contract against a background of common assumptions based on what usually happens in that locality or in that line of business. Terms will not be implied by custom where they would be contrary to the express terms of the contract

Question 15

Implied terms - previous course of dealings between the parties

Answer 15

The exemption clause was incorporated into the contract by the parties’ consistent course of dealing. Not confined to exemption clauses

Question 16

Implied terms - Statutory implied terms - Which act applies?

Answer 16

If it’s for a service, e.g installing machinery, between businesses it is the SALE OF GOODS AND SERVICES. If its for a good between businesses, e.g just the washing machine not the fitting of it it is the SALE OF GOODS. If its service/goods between consumers and consumer and business its CRA

Question 17

Implied terms - Statutory implied terms - Reasonable price

Answer 17

All 3 acts state that reasonable price will be charged.

Question 18

Implied terms - Statutory implied terms - Description

Answer 18

All 3 acts state that goods will correspond to description. SGA where sale of goods by description goods will correspond to description. CRA - sale by description - goods must match description

Question 19

Implied terms - Statutory implied terms - Quality and fit for purpose

Answer 19

All 3 acts state that goods will be of satisfactory quality and purpose. SGA - sells goods in course of business - the goods will be of satisfactory quality and fit for purpose. CRA goods are of satisfactory quality and fit for purpose.

Question 20

Implied terms - Statutory implied terms - Care and skill

Answer 20

All 3 acts state that a service will be carried out with reasonable care and skill. SGSA where supplier acts in course of a business services will be carried out with reasonable care and skill. This is the same for CRA

Question 21

Implied terms - Statutory implied terms - Time

Answer 21

All acts state that a service will be carried out within a reasonable time. SGSA and CRA.

Question 22

Implied terms - Statutory implied terms - Remedies for breach of description, quality and fit for purpose - SGA and SGSA

Answer 22

These are conditions. SGA = can terminate and claim damages for any loss and they have right to reject the goods. Same for SGSA. Can terminate even if the breach is minor. Right to reject goods is lost where the buyer has accepted the goods.

Question 23

Implied terms - Statutory implied terms - Remedies for breach of description, quality and fit for purpose - CRA

Answer 23

Remedies are in an order. 1) Short-term right to reject goods (30 days!). 2) Right to repair/replacement. 3) Right to price reduction 4) Final right to reject. Consumer is not prevented from claiming other remedies provided that they don’t recover twice.

Question 24

Implied terms - Statutory implied terms - Remedies for breach of reasonable care and skill - SGSA

Answer 24

Innominate terms. if the breach is serious enough they can terminate and claim damages. If it’s not serious then the court could decide that they themselves are in breach for terminating.

Question 25

Implied terms - Statutory implied terms - Strict liability

Answer 25

Quality, fitness and purpose are strict liability meaning defendant cannot blame breach on a manufacturing default.

Question 26

Schuler v Wickman

Answer 26

Contract was not drafted by a lawyer and parties must have known a term would be breached at some point, therefore they could not have intended one breach to justify terminating contract

Question 27

Consumer to consumer

Answer 27

If it’s a consumer to consumer deal then CRA DOES NOT apply

Question 28

Transformers & Rectifyers v Needs

Answer 28

Neither parties T&Cs were never requested. No reasonable steps were taken to draw either parties attention to T&Cs - they were in small print. Therefore neither parties’ T&Cs were incorporated