CT - General and specific

• Term is a stipulation of the contract that has been agreed by the two parties. A clause that is enforceable by law.
• Representation

  A statement of fact which doesn't amount to a term of the contract but it is one that the maker of the statement doesn't guarantee the truth.
• Is a statement a mere representation?

  1. the importance attached to the representation - if the statement has been a determining factor in causing them to enter a contract its more likely a term

  Couchman v Hill - An action stated a heifer was not pregnant. It was in fact pregnant and die while calving, this statement was clearly important and so was taken as a term
• Is a statement a mere representation?

  2. Special knowledge / skills of person making the statement - Party making statement is skilled in area of the contract content or has have expert knowledge, then more likely presumed the statement is a term.

  Oscar Chess v Williams - private seller believed it to be a model but it was much older - not a term

  Dick Bentley v Harold smith Motors - car dealer stated it had done significantly less miles than it had - is a term

  TELLS US- private seller not expected to have same experience as a dealer
• Is a statement a mere representation ?

  3. Time lag between making statement and the contract.

  Routledge v Mackay - Both parties were private individuals and relied on registration documents. Contract made later didn't refer to date of vehicle. Time lag of 7 days, date of manufacturer misstated by 12 years. statement was mere representation.

  CASE TELLS US : Where a contract is made some time after negotiations and doesn't refer to the statement that has been made during negotiations, it is likely that the statement doesn't become a term.
• Is a statement a mere representation ?

  4. Whether there is a written contract

  As seen in Routledge v Mackay, the court tends to presume that everything the parties wanted to include as a term of the contract is put in written contract.
• Is the statement a mere representation?

  5. Advice/Ability to verify the statement - if a contractual party makes a statement during negotiation but advises the opposing party to seek confirmation, this is likely to be a representation
• Is the statement a mere representation?

  6. The clarity of the statement - If the statement made by the party is vague and unclear it is unlikely to be a term.
• Types of terms

  • condition
  • warranty
  • innominate term - any term that's not clearly a condition or a warranty.
• Condition


  Term of a contract thats so important that a failure to perform the obligation would destroy the main purpose of the contract.

  if condition is broken, person suffering is entitled to end the contract - repudiation ( can get consequential losses )
• Poussard v Spiers and Pond - P entered contract to perform as an opera singer for 3 month, she became ill and was unable to perform the first 4 nights. Spiers then replaced her with another singer. P was in breach of condition and Spiers was entitled to end the contract

  THIS TELLS US : A condition is major term which goes to the root of the contract , if a condition is breached, innocent party entitled to repudiate and claim
• Condition

  Just because one party labels a term a condition , if the other party doesn't understand the implications of this, the court doesn't necessarily insist it is one.

  Schuler v Wickman Tools - S contacted Wickman tools giving them the sole rights to sell and distribute their goods, terms stated that W should make a total of 1400 visits a specific time period. They failed to make these visits and S contacted saying this entitled them to repudiate.

  TELLS US - just because term uses phrase condition doesn't make it so. This requirement unreasonable and not proper to recognise it so
• Condition

  Lombard v Butterworth - B , an accountant, employed L , a finance company , and hired a computer. Agreement stated deposit be paid, followed by 19 instalments and specified punctual payment. They were late on a few occasions. C repudiated contract, took back possession and sold it at a loss. They sought to claim amount outstanding.

  TELLS US : It is possible by express provision in the contract to make a term a condition , even if it not be so in the absence of such a provision.
• Warranty 


  Minor term in a contract , breach of which doesn't allow to end contract, just damages.

  Bettini v Gye - singer contracted to perform at concerts and 6 days of rehearsal, failed to attend 3 rehearsals and was replace. This was a breach of warranty, so the concert couldn't repudiate his contract.

  TELLS US : If a warranty is breached the contract is not ended and the main purpose of the contract can continue to be performed, no right to repudiate :
• Innominate Terms 


  Not defined as condition of warranty, this is decided after a breach by the judge.

  Hong Kong Fir Shipping Co Ltd v KKK ltd

  Ship chartered to the D for a 2 year period. Agreement included term that ship would be seaworthy throughout. Ship out of service for 20 weeks. D repudiated contract but were liable for wrongful repudiation.
• Express terms 


  Terms clearly written in the contract in which the contract must be read and signed
• Implied Terms 


  Terms not clearly written in the contract or not specifically discussed by the parties during formation but are presumed by a contract either by common law or statute law.
• The law implied terms into a contract in one of two ways:

  1. implied by facts during a dispute to see what the unexpressed intentions of the parties were
  2. statute
• Terms implied by common law

  Terms can be implied by common law in two ways :

  • Business efficacy and officious bystander test
  • By custom or prior dealings between the parties
• Business efficacy 


  Terms hasn't been discussed but it can be applied by common law if ti essential for the contract to make business sense. Term will only be implied where the contract wouldn't make business sense without it being implied.
• Business Efficacy

  Marks and Spencer v BNB Paribus Security Trust - M signed contract to lease 4 floors. Contract stated annual rent to be paid quarterly in advance. Break clause allowed them to leave lease with 6 months notice. They gave notice but still paid quarterly rent, final quarter went beyond date of break clause and they sought a return of rent beyond that date. While it wasn't mentioned, M sought to rely upon it as implied term. This term wasn't implied.

  TELLS US: term only implied where it satisfies test of business necessity, term shouldn't be implied cos it appears fair
• The officious Bystander test 


  Whether or not a term is implied in a contract is decided using this test. Can be seen in Shirlaw v Southern Foundries Ltd.

  A term can be implied into a contract where a bystander to the agreement would've identified the term as being part of the contract as it seems to be a necessary and obvious requirement.
• The officious bystander test

  Shell UK Ltd v Lostock Garage Ltd - In the contract, shell supplied petrol and oil to Lostock who agreed to only buy from shell. Later shell supplied to other garages at a lower price. Forced Lostock to sell at a loss. Rostock argues a term was in contract saying shell would never discriminate against it. This failed as shell would never have agreed to such a term

  CASE TELLS : Terms can not be implied if parties wouldn't have agreed had they have thought about it
• Egan V Static Control Components Ltd 


  S supplied E with components. Before 1999 Egan had signed guarantees making him personally liable for company debts. Soon with debt rising he was asked to repay in 6 weekly instalments and sign new guarantee. When company went into liquidation, he tried to argue guarantee only applied to goods supplied after it was signed. Court decided a reasonable person would assume it applied to existing and future debts

  CASE TELLS US : genuinely implied terms are what a reasonable person would have understood to the intention of both parties in context of contract
• Terms implied by common law

  English law is mostly founded by on the law founded on the law of custom of which some customs have survived and applied to contract law .

  Hutton v Warren -Local customs meant that at the end of leasing a farm the farmer was entitled to an allowance for the seed and labour on the land. Court decided the lease terms should be viewed in line with the custom.

  CASE TELLS US : term can be implied in a contract if there is a common held custom in place
• Terms implied by prior dealings

  Previous conduct of parties may indicate that terms are to be implied.

  Hillas v Arcos - H bought some timber from A, they purchased 22,000 units of it, agreement contained they could buy up to 100,000 units with a 5% discount. They refused to sell.

  CASE TELLS US: Courts should try to interpret the words of the agreement insect a way as to preserve the subject matter of the agreement rather than destroying it.
• Consumer

  An individual acting for purposes that are wholly or mainly outside that individuals trade or business
• Trader

  A person acting for purposes relating to that person's trade or business
• To whom does the Consumer Rights Act 2015 apply to?

  • contract and notices between trader and consumer
  • includes individuals who enter into contracts for both business and personal reasons
  • Trader has to prove that an individual is not a consumer in the circumstances to avoid liability traders remain liable when dealing through a 3rd party
• Consumer Rights Act 2015 applies to contracts of:

  • Sale
  • Hire
  • Hire - purchase
  • Transfer of Goods
• S9 of CRA

  The right of satisfactory quality

  takes into account :

  • any description of the goods
  • the price or other consideration for the goods
  • all other relevant circumstances
• S9 (3)

  Quality of goods includes their state and condition and takes into account

  • fitness for purpose and durability
  • appearance and finish
  • freedom from minor defects
  • safety of the goods

  Won't apply to

  • defects drawn to consumers attention before contract
  • Goos have been sold after inspection and defect would've been apparent in sample
• Section 10

  The right of fitness for particular purpose

  • applies to contract to supply good if consumer makes known to trader they want it for particular purpose.
  • If buyer is relying on the skill and judgement of the seller in buying the goods and has expressed a particular purpose for which goods are required then the implied condition is in contract
  • Baldry v Marshall - buyer asked seller to supply with fast, flexible that would be suitable for ordinary touring purpose, he said car he received wasn't fit for purpose.
• Section 11

  The right relating to description

  • can be implied description
  • Where supply of goods is in reference to a model seen or examined by the consumer, goods supplied must match those including the way it's packaged.
• Section 11 - The right relating to description

  result can be harsh

  Re Moore & Co Ltd - contract for tinned peaches packaged in cartons of 30, however many came in packages of 24.

  TELLS US: Entitled to reject goods as they weren't as described although they couldn't claim

  Landauer & Co's Arbitration - Purchaser bought car advertised as 1961, rear half was correct but front half from earlier model. Buyer entitled to damages for breach, although description not wholly false

  TELLS US : Every aspect of description must match goods supplied
• Section 20

  The short term right to reject

  • must be exercised within 30 days
  • exercise of this right must be made clear to trader
  • consumer entitled to full refund
  • trader must bear any reasonable costs of returning goods.
  • refund must be given within 14 days
  • refund must be given with same means of payment unless consumer agrees expressly otherwise
• Section 23

  The right to repair or replacement

  • trader must repair or replace within reasonable amount of time and without significant inconvenience
  • consumer can't require harder to do this if it would be impossible or disproportionate
  • Fault must be present at the time of original delivery
• Section 24

  Right to price reduction or final right to reject

  • trader has one attempt at repair or replacement for consumer to have this right
  • any refund subject to a deduction for use
• S49

  reasonable care and skill

  • contract to supply a service is to be treated as including a term that the trader must perform this service with reasonable care and skill
  • Thake v Maurice - T couple decided they wanted vasectomy, however Mrs T became pregnant and sued for breach of contract
  • Wilson v Best Travel - while on holiday, C fell through glass door and suffered injuries, glass conformed to Greek but not British safety standards.
• S52

  performance within a reasonable time

  • states that the service has to be performed within a reasonable time where contract doesn't expressly fix the time for the service to be performed
  • Reasonable time depends on circumstances