Contract Terms

Question 1

Express term

Answer 1

Made by one party to the other - important enough to form part of a contract - may be written into the agreement or an oral representation.

Question 2

Implied term

Answer 2

Terms which are put in by the court or statute - judges believe both parties intended for this to become part of the contract.

Question 3

Condition

Answer 3

A condition is a major term of the contract which goes to the root of the contract. If a condition is breached the innocent party is entitled to repudiate the contract and claim .
(Poussard v Spiers)

Question 4

Warranties

Answer 4

Warranties are minor terms of a contract which are not central to the existence of the contract. If a warranty is breached the innocent party may claim damages but can not end the contract.

Question 5

Innominate clause

Answer 5

“Wait and see clause”
(Hong Kong Shipping)
Judge looks at whether the claimant was deprived of the whole benefit of the contract.

Question 6

Representation

Answer 6

A representation is a mere trade puff which are not part of the contract e.g. “Red Bull gives you wings”

Question 7

Representation rules to determine

Answer 7

1. Relative expertise - representor has greater knowledge - term - representee has greater knowledge - representation
2. Put into writing - only terms included in written document are terms - verbal statements will be representations.
3. Importance of representation - more important, more likely to be term.
4. Time lapse - longer the time lapse between making the statement and entering the contract - more likely will be a representation.