Terms

• Distinction between different types of terms

  • the distinction between conditions and warranties is fairly straightforward, but confusion has been created by the development of innominate terms
• Use of the officious bystander test

  • test appears to be an adequate way of showing that the courts are giving effect to the presumed intention of the parties
  • But it is a strict test and possibly an unrealistic one as a party will be all too willing to say that the term was intended to be part of the contract whereas the other party will argue the complete opposite
• Non-incorporation of previous terms

  • in Hollier v Ramble Motors it could be argue that the court was trying to avoid an exclusion clause in a standard contract
  • Hollier had been to this garage on more than one occasion before usually signing an invoice with the exclusion clause on it
  • if he had taken the care to the garage on the occasion he would have no doubt signed the document
• Departure from the principle of freedom of contract

  • the courts are reluctant to imply terms into a contract because they do not want to depart from common law principle of freedom of contract
  • the courts reluctance is due to the fact that judge made law has been criticised as it is parliaments role to make and change law
  • but this has led to more not less confusion
• Lack of certainty in implied terms

  • the traditional use of conditions and warranties promotes certainty
  • but if a warranty is breached then C is entitled to damages only, this can led to unfair results as it dos not consider the consequences of the breach
  • innominate terms are less certain, as it can be difficult to decide if the effect of a breach is serious enough to justify ending the contract, but they may be seen as more flexible
• Two different approaches to the purpose of exclusion clauses

  • confusion is created through the fact that there is no consistent approach to dealing with exclusion clauses
  • one approach if to use the whole contract including the exclusion clauses as evidence of the obligations under it
  • The other approach is to look at the contract without the exclusion clauses and the exclusion clauses would then be used as a defence if necessary
  • the latter is often used, but some say it depends of the wording of the exclusion clause