Contract Terms Flashcards
Remedies for breach of condition, warranty and innominate terms
Condition: (repudiatory breach)
- Right of election (terminate or affirm)
- Damages
Warranty
- Damages
Innominate term
- Depends on whether condition or warranty. Condition if breach deprived innocent part of substantially the whole benefit of the contract
How to determine whether a term is a condition or warranty
Court will look at whether the parties when entering the contract intended that a breach coudl result in termination
When will an innominate term be a condition?
Breach deprives innocent party of substantially whole benefit of the contract
What is an express term?
Statement made by parties by which they intend to be bound (writing or oral)
Test to determine whether a statement is a term or representation
Court will look at common intention. if clear, go with this. If unclear:
* Emphasise importance? = condition
* Invited to verify? = rep
* Repeated in writing? = condition
* Close to entering contract = condition
* skill of parties (expert-non) = condition
Ways a term can be incorporated
Signature
Notice
Course of dealing
When will a term not be incorporated even if agreement is signed?
- Signed after entered contract
- Would not expect doc to contain terms
- misrepresentation as to effect
When will a term be incorporated by notice?
- Reasonable steps taken to bring term to C’s attention (unreasonable if illegibly, back of ticket, red ink red hand)
- Before entering contract; and
- Doc giving notice was intended to have contractual effect
When will a term be incorporated by course of dealing?
- Course of dealing (regular + frequent)
- Consistent (same terms + always signed)
Business Efficacy and officious bystander tests
Term may be implied if:
Business Efficacy: necessary to make contract commercially viable
Officious bystander: so obvious both parties must have intended it + both agree
Implied terms which are also conditions
- Fit for purpose
- Comply with description
- Satisfactory Quality
Implied terms which are innominate terms
- Reasonable skill and care
- Reasonable time and price
When will the following terms be implied:
1. Comply with description
2. Satisfactory Quality;
3. Fit for purpose
Comply with description:
* Buyer reasonably relied on description
Satisfactory Quality
* Standard a reasonable person woudl regard as satisfactory considering description, price and relevant circumstances UNLESS
* Defect drawn to buyer’s attention
* Buyer examined and should have noticed; or
* Buyer sent a sample and defect present
Fit for purpose
* Buyer makes purpose known and reasonably to rely on seller
Statutory remedies under SGA for breach of implied condition
- Reject + Refund + Damages UNLESS
* Affirm (does not reject in reasonable time)
* Rejection is unreasonable (goods are useable)
or
- Affirm + Damages
Statutory remedies under CRA for breach of implied condition
Within 30 days
* Reject + Refund
Within 6 months
* Repair or replacement
* but if inappropriate / fixed once already: price reduction -or- rejection + full refund
UNLESS seller can prove goods conformed with contract on delivery day
Statutory remedies under CRA for breach of reasonable skill or reasonable time and price
Reasonable skill: repeat performance or price reduction
Time and price: price reduction
When will an exemption clause be valid?
Incorporated + construction + reasonable
When is it necessary to consider whether exemption clause is reasonable?
UCTA: negligence, T&Cs, statutory implied term
CRA: ALL terms except price
UCTA and CRA reasonableness tests
UCTA: Was the clause reasonable to include at time contract entered into (D must prove reasonable):
* Balance of power
* Resources
* Inducement (price reduction)
* Special Order
* Loss borne by taxpaper?
* Did C know it existed?
* Ability to enter another contract
CRA: Does the term cause a significant imblance to the deteriment of C?
