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Flashcards in Terms Deck (38):
1

Term

Promise that becomes part of the contract itself.

2

Representation

Statement which induces a party to enter into a contract, but is not apart of the contract itself.

3

Liability for false term?

It is deemed a breach of contract and the injured party has a right to sue.

4

Express Term

Specifically mentioned and agreed to by both parties at the time the contract is made.

5

Implied Terms

Words or provisions that a court presumes were intended to put into the contract.

6

What are the main guidelines used to differentiate between a term and a representation?

- Significance of Statement
- Special Knowledge/Skill
- Timing of Statement
- Agreement in Writing
- Strength of Inducement

7

1. Significance of Statement:

Term. If the injured party makes the other aware that if the statement had not been said, they would not have entered the contract.

Bannerman v White

8

2. Special Knowledge/Skill:

Term. Courts deem statements made by experts pertaining to relevant subject as terms.

Dick Bentley Productions v Harold Smith

9

Dick Bentley Productions v Harold Smith contrasted in:

Oscar Chess v Williams

Buyer should have noticed age of car,

10

3. Timing of Statement

The more time in between the statement being made and the contract being concluded, the less likely a court will regard it as a term.

Routledge v Mckay

11

Routledge v Mckay contrasted in:

Schawer v Reade

Importance and strength of statement make timing irrelevant.

12

4. Agreement in writing

Any statement present in the written contract is a term.

13

5. Strength of inducement

The more emphatically a statement is made, the more likely the courts will regard it as a term.

Schawer v Reade

14

3 Ways written terms can be incorporated into a contract:

1. By signature
2. By reasonable notice
3. Previous course of dealings

15

Parol evidence rule:

If the contract is written, then the writing constitutes the complete contract. Parties cannot add to, vary or contradict the writing.

Henderson v Arthur

16

Exceptions to Parol evidence rule:

1. Rectification
2. Partially written agreements
3. Implied terms.
4. Operation of a contract.
5. Evidence about parties.
6. Proving custom

17

Rectification

Document fails to record oral agreement, extrinsic evidence may be used.

18

Partially written agreements

Where there is a written contract but both parties intended to qualify it with other oral statement, the parole evidence rule does not apply.

Couchman v Hill

19

Implied terms and Parol Evidence Rule:

Where a contract is the type where its terms are implied by law, then the parole evidence rule does not apply.

20

Operation of the contract

Parole evidence rule is displaced where extrinsic evidence is shows that the contract would not have come into effect or end, if not for a particular circumstance.

Pym v Campbell

21

Evidence about parties

Extrinsic evidence can be used to show in which capacities the parties were acting.

22

Proving custom

Extrinsic evidence can be used to clarify local trade and custom.

Smith v Wilson

23

Possible status of oral statements made before written contract is made:

- Contract exclusively written. Oral statements are treated as representations.
- Contract partly written and party oral.
- Two contracts. One is written and the other is based on the oral statements.

24

Collateral Contracts

Secondary contracts based upon oral statements.

City and Westminster Property v Mudd

25

Types of implied terms

- Terms implied in fact
- Terms implied in law
- Terms implied by custom
- Terms implied by trade usage

26

Terms implied by fact:

Terms which are not in the contract. It is assumed that both parties would have included them had they remembered at the time.

Marks and Spencer v BNP Paribas

27

Terms implied in law:

Terms which the law decided must be present in certain types of contract.

Liverpool City Council v Irwin

28

Terms implied by custom:

Implied if there is evidence suggesting that by traditional custom, the terms are present.

Smith v WIlson

29

Terms implied by trade usage:

Term implied where it would be part of a contract made by parties involved in trade.

Cunliffe-owen v Teather and Greenwood

30

Officious Bystander

Something so obvious that should a bystander raise it during negotiations, both parties would agree to inserting it.

31

Business efficacy

Terms must be implied in order to make the contract function.

The Moorcock

32

Entire agreement clause

Clauses which state the written contract contains entire agreement.

33

The law seeks to classify terms based on importance. What are the three types of contractual terms?

- Condition
- Warranty
- Innominate

34

Condition

Important tern which goes to the root of the contract.

35

Warranty

Subsidiary term

36

Innominate

Classification depends on seriousness of breach

Hong Kong Fir Shipping v Kawasaki

37

Remedy for breach of a condition?

Contract is repudiated

38

Remedy for breach of warranty?

Can sue for damages