Terms of the Contract

Question 1

statements that do form part of the contract are known as what?

Answer 1

the terms of the contract (legal obligations)

Question 2

when are the injured party entitled to sue for damages for breach of contract?

Answer 2

if the terms of the contract are breached

Question 3

if the pre-contractual statement does not form part of the contract it is classified as what?

Answer 3

a representation

Question 4

what are the three types of contractual term?

Answer 4

-conditions
-warranties
-intermediate terms

Question 5

what is a condition?

Answer 5

an essential term that if breached, the injured party is entitled to damages and is also entitled to get out of the contract if they want to

Question 6

what is a warranty?

Answer 6

the only remedy available for damages for breach of contract

Question 7

what is an intermediate term?

Answer 7

The injured party will be entitled to damages for breach of contract and may or may not be entitled to get out of the contract.

Question 8

what is an exemption clause?

Answer 8

a clause in a contract that limits or removes a party’s liability if something goes wrong.

Question 9

what does incorporation mean?

Answer 9

the clause becomes part of the contract

Question 10

an exemption clause can be incorporated into a contract in one of three ways:

Answer 10

1. signature
2. notice
3. course of dealings

Question 11

If a document which contains an exemption clause has been signed, evidence of notice of the clause is what?

Answer 11

irrelevant

Question 12

Where the document is unsigned, the exemption clause may be what?

Answer 12

incorporated into the contract if reasonable steps have been taken to bring it to the attention of the other party.

Question 13

what are the three issues to be addressed where the document is unsigned?

Answer 13

i. Where is the clause contained?
ii. Was notice given in good time?
iii. Were reasonable steps taken to bring it to the other party’s attention?

Question 14

Before the court will even begin to consider whether reasonable notice has been given of an exemption clause in any particular case, what is essential?

Answer 14

that the clause must be contained in something which can be regarded as a contractual document.

Question 15

if the exemption clause was not brought to the attention of the other party before or at the time the contract was made, what cannot be done?

Answer 15

it cannot be incorporated into the contract

Question 16

why will an exemption clause not be incorporated into an unsigned contract?

Answer 16

where it cannot be incorporated into the contract

Question 17

is it necessary to show that the term was brought to the actual notice of the other party?

Answer 17

no, merely that reasonable steps were taken in the circumstances to do so.

Question 18

what is the question to be asked in relation to incorporation of an exemption clause?

Answer 18

whether the party seeking to rely on the clause did what was reasonably sufficient to give the other party notice of the condition.

Question 19

if an exemption clause contains any harsh or unusual provisions, what does the courts expect?

Answer 19

more effort should be made by the party seeking to rely on the clause to bring it to the attention of the other party

Question 20

If parties contract with each other on a regular basis, the courts must do what?

Answer 20

balance the injustice of holding one party to be bound by a term which they did not read against the expectation of the other party.

Question 21

if the parties contract regularly and one party issues documents which transfer the risk to the other party, they are entitled to do what?

Answer 21

they are entitled to assume that the other party agrees to the terms they are offering

Question 22

For incorporation to occur as a result of a course of dealing or conduct the course of dealing must be what?

Answer 22

consistent

Question 23

One or two isolated incidents will not constitute a course of dealing unless what?

Answer 23

both parties are of similar bargaining strength and operate on terms which are acknowledged to be common within their trade/business

Question 24

Criteria for economic duress:

Answer 24

-illegitimate pressure constituting a ‘but for cause’
-threat to breach ctt generally regarded as illegitimate
-was there a ‘real choice/realistic alternative’?’
-presence/absence of protest may be relevant but its absence will not be definitive