Lecture 5 Contract Law (II): Terms Flashcards
What terms are included in the contract?
- Implied terms invisible in what parties agree on - implied into the contract to give effect to parties’ intentions
- Express Terms provisions that state or make explicit parties promises to each other these include (by parties’ previous dealings, by statutory requirements, by business efficacy, by established trade custom)
Explain the two ways to make contract online.
- Click-Wrap Agreemtns (appears on user’s computer screen when a user attempts to purchase goods or services online, to proceed online need to click: An I agree butter, a hyperlink or an icon)
- Browse-Wrap Agreements (a link or button that takes user to the terms&conditions is presented. There is no “I agree button” simply using the website user agrees to be bound by the terms of use)
Is it possible that one party does not actually know what are written down in the contract? Explain the three click wrap and browse wrap situations.
Click Wrap
- Rudder v Microsoft Corp there are no particular difference which make a particular terms more difficult to read than any other term
-Douez v Facebook users are assumed to review the terms before clicking agreement
-Kanitz v Rogers Cable Inc amendments valid by simply posting them on it website
Browse-wrap
- Canadian Real Estate Association v Sutton (Quebec) Real Estate Services terms could be accessed via hyperlink, Sutton “should have known”
-Century 21 Canada v Rogers Communications Inc Give the user an opportunity to read it before deeming its use of the website as acceptance of terms
-Dell computer Corp v Union des consommateurs the terms are “reasonably accessible”
Explain the Parole Evidence Rule
- The rule forbids outside or extrinsic evidence as to the terms of contract when the language of the written contract is clear and the document is intended to be the sole source of contractual content.
- The Entire Contract Clause: the course will determine the parties’ obligation based only on what is recited in the contract itself (no oral promises, conditions, representations, understandings, interpretations, or terms of any nature of kind.)
Explain the classification of Terms, what are the difference consequences in case of breach?
Conditions (if with serious consequences)
-Fundamental terms; terms touching the essence of the contract. A breach of it will allow the innocent party to terminate the contract and/or sure for damages.
Poussard v Spiers and Pond sick opera singer replaced.
Warranties (if with minor consequences)
-Terms of less significance or importance, not being an essential part of the contract
- a breach of it does not amount to termination of the contract. the innocent party can only claim damages.
Bettini v Gye showed up late for rehearsal (solo)
Explain “limitation of liability clauses/ exclusion clauses”
A party tries to identify events or circumstances causing loss for which has limited or even no liability whatsoever
Ex.
- sellers liability shall in no event exceed unit price of defective
- seller is exempted from all liability in respect to losses, damages, costs or claims relating to design of goods.
explain the effectiveness of an exemption clause
1)Whether the exemption clauses has been incorporated into the contract at the time of the contract (not afterwards)
The once it is part of the contract court considers
2) Whether it could pass the *three issue equiries of unconsionability and public policy as established by SCC in the Tercon Contractors cases
Explain the Tilden Rent-A-Car Co v Clendenning case
Clendenning rented a car, he was in hurry and signed a long complicated contrat without reading it. On the contract in small type: “the insurance would be inoperative if the driver had consumer any alcohol” He drove into a pole and was unaware of this clause.
- C’s signature was not a true assent to the terms of the contract (clerk would have known her didn’t read it)
- Tilden has responsibility to take reasonable measures to draw these terms to the consumer’s attention (should have highlighted terms)
Explain the Tercon Contractors Ltd v British Columbia (Transportation and Highways) case
Tercon, unsuccessful in a tender on a large highway project, alleged that BC government chose an ineligible bidder and tried to hide that ineligibility. Sue for loss of profit it would have earned.
- BC government tried to rely on a ‘No Claims Clause:
‘no bidder shall have any claim for any compensation of any kind whatsoever, as a result of participating … and by submitting a proposal each proponent shall be deemed to have agreed that it has no claim.’
Holding of SCC (majority):- The BC government failed in the first issue: the No Claim Clause did not apply to the facts at hand
- In order to apply, clear language would be necessary
Explain the three-issue enquiries
- The first issue - whether applicable
Whether as a matter of interpretation the exclusion clause applies to the facts at hand - The second issue - whether unconscionable
As might arise from situations of unequal bargaining power between the parties
-The third issue - whether public policy may override
Such as serious criminality or egregious fraud
What did the George Mitchell (Chesterhall) Ltd v Finny Lock Seeds Ltd case relate to?
Involving an assessment of reasonableness by taking some relevant factors into account
