Unit 3 - contract terms (written/negotiations/incorporation)

Question 1

what is the difference between express terms and implied terms

Answer 1

express terms - terms the parties have agreed to orally or in writing
implied - implied by the court

Question 2

where can express terms be found

Answer 2

• in the written agreement
• in negotiations sometimes
• in external sources - if incorporated

Question 3

old approach to the finding contract terms

Answer 3

Inglis - will not be found anywhere else outside the written contract if there is one

Question 4

new approach to finding contract terms

Answer 4

Contract Scotland act 1977
- presumption that they will all be found in the written contract
- can be rebutted by evidence of conduct or communication that suggests that another agreement was came to
- exception to exception: S1(3) - entire contract clause

Question 5

what is the general rule about negotiations

Answer 5

they do not normally form part of the terms

Question 6

what happens if something said in negotiations has induced the contract

Answer 6

the law of misrepresentation applied

Question 7

can negotiations form part of the contract

Answer 7

Yes if the party’s intention was for that statement to become part of the contract
- you can determine this by time and type of statement Malcolm v Cross

Question 8

how can terms be incorporated

Answer 8

• by signature
• by reference
• by prior course of dealings

Question 9

authority for terms being incorporated by signature

Answer 9

L’estrange

Question 10

what are the three tests for terms being incorporated by reference

Answer 10

• is the document itself contractual in nature - Taylor v Glasgow Corp
• are the terms known to exist prior to formation - Thornton v Shoe Lane parking
• has sufficient notice been given - Thornton - onerous terms and big red hand

Question 11

what case is an example of sufficient notice being given of terms included by reference

Answer 11

Hood v Anchor line

Question 12

when can terms be included when there is a prior course of dealings

Answer 12

if the parties proceed on the basis that the terms are intended to form part of the contract

Question 13

what effect does consistency have on terms incorporated by prior course of dealings?

Answer 13

• McCutcheon v McBrayne - a lack of consistency in practice can mean that the terms will not be incorporated
• Karoulinas - consistency can mean terms are incorporated

Question 14

what effect can trade practice have on terms incorporated by prior course of dealings?

Answer 14

British crane hire v Ipswich plant hire - trade practice can show that terms should be incorporated