Terms

• What are the two types of terms in contract law?

  Express and implied terms
• What factors determine if a statement is a term?

  • Importance of the statement
  • Special knowledge of subject-matter
  • Time between statement and contract formation
  • Written contract status
  • Statement maker's position
  • Request to verify truth
• What case established the importance of the statement in determining a term?

  Bannerman v White
• What does the parol evidence rule state?

  Oral statements cannot vary written contracts
• Which case is associated with the parol evidence rule?

  Henderson v Arthur
• How can the parol evidence rule be circumvented?

  • Part oral, partly written contracts
  • Collateral contracts
  • Entire agreement clauses
  • No oral modification clauses
• What is the officious bystander test?

  It implies terms that are obvious
• What case illustrates the officious bystander test?

  Shirlaw v Southern Foundries
• What does the business efficacy test assess?

  Necessity for the contract to function
• Which case is associated with the business efficacy test?

  The Moorcock
• What does the construction approach focus on?

  Reasonable understanding from background facts
• Which case exemplifies the construction approach?

  Attorney General of Belize v Belize Telecom Ltd
• What was the outcome in Marks & Spencer v BNP Paribas regarding implied terms?

  Express term needed for rent reimbursement
• What did Lord Neuberger emphasize in Marks & Spencer v BNP Paribas?

  Reasserted officious bystander and business efficacy tests
• What is the implication of terms in law?

  Terms implied as a matter of policy
• Which case upheld an implied term in a tenancy contract?

  Liverpool City Council v Irwin
• What are the primary statutes that imply terms into contracts?

  • Sale of Goods Act 1979
  • Supply of Goods and Services Act 1982
  • Consumer Rights Act 2015
• What is the implied term in a sale by description under SGA 1979?

  Goods must match their description
• What does Section 14(2) of SGA 1979 state?

  Implied term of satisfactory quality in sales
• What is the implied term regarding fitness for a particular purpose?

  Must be known to the seller
• What does Section 13 SGSA 1982 require from suppliers?

  To carry out services with reasonable care
• How can terms be implied from trade or custom?

  • Based on previous dealings
  • Usual in the parties' trade
• What is an example of a breach of an implied term in a service contract?

  Negligent service causing damage
• What is an example of a breach of an implied term regarding goods?

  Defective goods not fit for purpose
• What is the primary aim of interpreting contractual terms?

  To determine the parties' intention objectively
• What does the interpretation of a contract involve according to Lord Clarke?

  Ascertaining what a reasonable person would understand
• What is the old approach to contractual interpretation?

  Literalist or textualism approach
• What does the old approach emphasize in contract interpretation?

  Staying within the 'four corners' of the contract
• Who stated that courts should construe documents according to ordinary grammatical meaning?

  Cozens-Hardy MR
• What is the modern approach to contractual interpretation?

  Contextual or purposive interpretation reflecting commercial common sense
• How does the modern approach differ from the old approach in contract interpretation?

  It considers the context and purpose of the contract
• What does Lord Wilberforce say about contracts?

  No contracts are made in a vacuum
• What is the significance of the "matrix of fact" in contract interpretation?

  It refers to the background affecting understanding
• What does Lord Hoffmann state about the admissible background in interpretation?

  It includes anything affecting language understanding
• What does Lord Hoffmann exclude from the admissible background?

  Previous negotiations and subjective intent
• How does the meaning of a document differ from the meaning of its words?

  The document's meaning considers context and understanding
• What does the "natural and ordinary meaning" rule reflect?

  Common sense that mistakes are rare in formal documents
• What does Lord Clarke state about constructions in contracts?

  The court prefers constructions consistent with business common sense
• What is the significance of Lord Neuberger's seven factors in contractual interpretation?

  They emphasize the importance of language in contracts
• What does Lord Neuberger say about bad outcomes in contract interpretation?

  Bad outcomes do not justify departing from natural language