Unit 3 - contract terms (implied)

Question 1

what are the ways contract terms can be implied

Answer 1

• industry custom
• by the courts
• by legislation

Question 2

what is required for terms to be implied through industry custom

Answer 2

Cunliffe - Owen
- sufficiently certain practice
- notorious
- so notorious that it is accepted as binding
- reasonable

Question 3

what is the Scottish example of implied terms through industry custom

Answer 3

Morton v Morris

Question 4

How do implied terms by legislation work

Answer 4

Legislation may imply terms into contracts which:
- can be contracted out of
- cannot be contracted out of

Question 5

what is the example for legislatively implied terms

Answer 5

• Sale of goods act
• S14 satisfactory standard can be contracted out of
• S12 obligation to give title cannot be contracted out of

Question 6

Which are the 2 ways courts can imply terms

Answer 6

• in law
• in fact

Question 7

what are the differences between in law and in fact implied terms

Answer 7

• courts have greater reach in law - a whole class of contract
• courts have access to a wider selection of reasoning in law - with policy considerations effecting reasoning

Question 8

What is the test for a term being implied in law?

Answer 8

Necessity test Liverpool v Irwin
- must be necessary for the contract to work

Question 9

what 2 subsequent cases show how policy considerations have been involved in reasoning?

Answer 9

• Scally v Southern health board => improvement to workers rights
• Malik v Bank of credit commerce international => changing perception of employee/employer relations and of employment

Question 10

What is the test for a term being implied in fact?

Answer 10

Ali v Petroleum company of Trinidad and Tobago
- only implied when necessary for business efficacy
- or when it is so obvious that it goes without saying

Question 11

What did Marks and Spencers Plc add to the test for something being implied in fact

Answer 11

• it must also be fair and equitable