contents of a contract B3

Question 1

types of term

Answer 1

conditions
warranties
innominate terms

Question 2

conditions

Answer 2

• most important terms
• if failure to perform it renders the contract meaningless
  the innocent party can treat contract as ended and sue for damages
  (poussard v spiers and pond)

Question 3

warranties

Answer 3

• less important terms, secondary importance
• even if breached the contract can still continue
• innocent party must continue with contract and can only sue for damages
  (bettini v gye)

Question 4

innominate terms

Answer 4

• dont quite fit into either conditions or warranties
• courts will look at consequences of the breach of term
• if very serious consequence, will be classed as condition
• if less serious consequence, will be classed as warranty
  (hong kong fir shipping co ltd v kawasaki kisen kaisha ltd)

Question 5

expressed terms

Answer 5

those that are expressly agreed at the time the contract is entered into

Question 6

mere puffs

Answer 6

extravagant claims for the thing being offered
e.g. red bull gives you wings

Question 7

representation

Answer 7

pre contractual statements that are intended to persuade the other party to enter the contract but not intended to form part of the contract itself

Question 8

terms

Answer 8

• form part of the contract itself
• can be expressed, clearly discussed and agreed between the two parties
• or implied, not considered by parties but is incorporated into the contract by statute
• if the terms are broken there is a breach of the contract

Question 9

is it representation or expressed term?

Answer 9

courts look at:
- importance of the statement
- if the contract is verbal or in writing
- timing
- specialist knowledge or skill of the party making the statement

Question 10

importance of the statement

Answer 10

if it is of particular importance it is more likely to be a term
(couchman v hill)

Question 11

verbal or writing

Answer 11

if contract is in writing courts will usually hold that any verbal statements not included in written agreements are representations, not expressed terms
(routledge v McKay)

Question 12

timing

Answer 12

if there is large gap between mkaing of the statement and formation of the contract it is less likely to be an expressed term

Question 13

special knowledge or skills of the party making the statement

Answer 13

if has specialist knowledge, statement made is more likely to be a term
(dick bentley v harold smith motors)

Question 14

exclusion clauses definition

Answer 14

expressed terms of a contract with attempt to remove or restrict a parties liability in the event of a breach of contract

Question 15

exclusion clause examples

Answer 15

• signed agreements (lestrange v gaucob)
• express knowledge of the clause (olly v marlborough court hotel)
• reasonable notice of the clause (thornton v shoe lace parking ltd)

Question 16

signed agreements

Answer 16

if the agreement is signed by party then he/she is bound to its terms including any exclusion clauses
(lestrange v graucob)

Question 17

express knowledge of the clause

Answer 17

in the absence of a written agreement, if theclaimant was aware of the exclusion clause at the time of entering into the contract, they will be bound by it
(olly v marlborough court hotel)

Question 18

reasonable notice of the clause

Answer 18

reasonable notice of the exclusion clause must be made. the greater the clause the greater the effort needed to bring it to the others attention
(thornton v shoe lace parking ltd)

Question 19

implied terms definition

Answer 19

terms that do not appear in the written contract or oral negotiations. can be implied by two ways:
- common law
- statute

Question 20

terms implied by common law

Answer 20

• terms implied by prior dealings between the parties (hillas v across)
• terms implied through the business efficacy and the officious bystander test. basically make it work (the moorcock)
• terms implied by custom (hutton v warren)

Question 21

terms implied by statute

Answer 21

various statutes that imply terms of contract but only interested in consumer rights act 205

Question 22

consumer rights act 2015

Answer 22

applies to all contracts made after 1 october 2015 between a trader and a consumer
- contract to supply goods e.g. buying from a shop
- contract t o supply services e.g. window cleaning

Question 23

terms implied into a contract to supply goods

Answer 23

s9 - are they satisfactory quality (grant v australian knitting mills)
s10 - fitness for purpose (baldry v marshall)
s11 - description (re moore and co ltd and landauer and cos arbitration)

Question 24

s9 satisfactory quality

Answer 24

goods must be of satisfactory quality. take into account:
- description of goods
- the price or other consideration for the goods
- all other relevant circumstances
(grant v australian knitting mills)

Question 25

s10 fitness for purpose

Answer 25

when consumer makes it known to trader the particular purpose for which the goods will be used for. this only applies when the consumer relies on the traders judgement, not if consumer made up their own mind s to whether it is fit for purpose
(baldry v marshall)

Question 26

s11 description

Answer 26

s11(1) when goods are sold under description there is implied terms that they will match the description
s11(2) when goods sold by sample there is an implied term that the goods must match the sample
(re moore and co ltd and landauer and co’s arbitration)

Question 27

remedies for supplied goods

Answer 27

s20 short time right to reject
s23 right to repair or replacement
s24 right to price reduction or final right to reject
s31 liability cannot be excluded

Question 28

s20 short time right to reject (remedies)

Answer 28

consumer has 30 days to reject food for any breach of an implied term. he/she can reject faulty goods. this means consumer is released from all contractual obligations, entitled to refund within 14 days of rejection and must return the goods to trader

Question 29

s23 right to repair or replace (remedies)

Answer 29

trader must repair or replace within reasonable time and without causing significant inconvenience. when goods have been repaired/replaced consumer has 30 days to decide whether to reject the goods

Question 30

s24 right to price reduction or final right to reject (remedies)

Answer 30

final chance to reject or seek price reduction
- price reduction - can be as much as full price of goods
- final right to reject - entitled to refund within 14 days or rejection amount of refund may be reduced based off any use customer had of goods

Question 31

s31 liability cannot be excluded (remedies)

Answer 31

liability cannot be excluded by trader when selling goods

Question 32

terms implied by contract to supply services

Answer 32

s49 reasonable care and skill
s51 reasonable price
s52 performing within a reasonable period of time

Question 33

s49 reasonable care and skill

Answer 33

implied that trader will perform with reasonable care and skill
(thake v maurice)

Question 34

s51 reasonable price

Answer 34

implied consumer will pay reasonable price for service. only applies where price has not been agreed as part of contract

Question 35

s52 performance within reasonable period of time

Answer 35

only applies where there is no agreement as to how long the service should take

Question 36

remedies for supplied services

Answer 36

s55 right to require repeat performance
s56 right to price reduction

Question 37

s55 right to require repeat performance (remedies)

Answer 37

consumer can require trader to perform again at their own cost without significant convenience

Question 38

s56 right to price reduction

Answer 38

can require trader to reduce price by amount appropriate to severity of breach, can be up to 100%