Express Terms of a contract Flashcards
L’Estrange v Graucob
L’Estrange bought a product from Graucob. The sales agreement contained an exemption clause in small print “agreement contains all terms and conditions above any express or implied conditions.”. L’Estrange sued as it was implied it would be fit for the purpose. The exemption clause implied terms and therefore L’Estrange could not rely on one
Olley v Malborough
Facts – The Olleys booked into the Marlborough Court Hotel. They paid a week’s board. When they got to their room, they noticed a sign on the door which said:
“The proprietors will not hold themselves responsible for articles lost or stolen unless handed to the manageress for safe custody.”
Mrs Olley’s furs were stolen as a result of the carelessness of the hotel staff. Mrs Olley sued for damages. Normally, the hotel would owe an obligation to guests not to be careless. In this case, the hotel argued that because of the sign they could not be held responsible. The sign, however, would only be effective if it was a term of the contract between the Olleys and the hotel. Was it a term?
Decision – The hotel could only rely on the exclusion clause if it was a term of the contract. When was the contract made? The court held that it was made at the reception desk before the Olleys went up to their room. Therefore, the exclusion clause could not be a term.
Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd
Facts – Stiletto hired some transparencies from a photographic library (Interfoto). The transparencies were delivered together with a delivery note which contained a number of conditions printed across the foot of the note. One of the conditions imposed an over-holding fee of $5 per day. Most other picture libraries charged $3.50 per week. Stiletto returned the transparencies late and Interfoto sued for the over-holding fee at the rate of $5 per day. Stiletto argued that the condition ($5 per day) contained in the delivery note was not a term of the contract.
Decision – The Court of Appeal held that the contract was not formed until the transparencies and the delivery note had been delivered, and Stiletto retained the goods without making any objection to the conditions on the note. However, this did not mean that ll the conditions contained in the note were terms of the contract. Dillio LJ said (at 352):
[I]f one condition in a set of printed conditions is particularly onerous or unusual, the party seeking to enforce it must show that the particular condition was fairly brought to the attention of the other party
As nothing whatsoever had been done to draw the defendant’s attention to the over-holding condition, and as the condition was so wholly different to normal industry practice, the condition could not be regarded as a term of the contract. Interfoto was entitled to a fee based on the industry norm ($3.50 per week). This was an implied term of the contract. (Implied terms are discussed in Chapter 7)
Van Den Esschert v Chappell
Facts – Van Den Esschert agreed to sell a house to Chappell. The contract was drawn up, but immediately before signing, Chappell asked whether there were any white ants in the house. V said, “No, no, no, if there had been any I would have taken steps to eradicate them”.
Chappell then signed the written contract. The written contract made no mention of white ants. After Chappell took possession, she found that the house was infested with white ants. It cost her $60 to eradicate them. Chappell sued for breach of warranty (contract). The issue was whether Van Den Esschert’s oral assurance about the white ants was a term of the contract.
Decision – Wolff CJ in the Western Australian Supreme Court, having referred to the importance of white ant infestation in Western Australia, held that:
“… when (as in this case) the prospective purchaser immediately before signing a contract makes a specific request to be informed about that matter and gets an affirmative answer such as the purchaser got in this case it was intended to be made a part and parcel of the contract and was to be regarded as a term.”
It was important that the written document had already been prepared and the oral statement was made immediately prior to the signing of the document in circumstances where it was reasonably clear that the representee would not have signed without receiving the necessary assurance.
