Topic 3 Terms of a contract

• Explain what is meant by Terms of a contract, Expressed terms and Implied terms. 


  Terms of a contract: These are enforceable elements of a contract 

  Express Terms: explicit discussion/ negotiation by agreement between the parties

  Implied Terms: incorporated via implication. 
• Explain what is meant by Representation and Misrepresentation

  Representation: Statements made by a party before a contract but may not make it into the contract 

  Misrepresentation: Statements which are false leading up to the incorporation of a contract. 
• What are the different Route for the formation of contract terms

  The different routes for the introduction of terms can be through the Common Law, Statute, Custom, Course of Dealing and Fact. 
• What is the Parole evidence rule AND what was the basis of it?

  There is no need for forms in english law to determine the intentions of the parties but there is a need to prove a contract.

  Parole evidence rule- if parties wrote down contract, written contract is proof of contract.(Jacobs v Batavia 1924)
• What are mere puff statements 


  This is when a statement is not enforceable because a statement that was presented to entice a signee was a bold and unrealistic statement. 

  Lambert v Lewis (1982) 
• What was the LP and the facts of Banner v White 


  Banner agreed to purchase hops to make beer, Asked white if there was sulphur used in treatment and said no. It was used, White agreed representation but was dismissed because it was a term since Banner explictly told him of the condition and consequences if sulphur was used.
• What were the facts and LP established in Arcos Ltd v EA Ronassen and Sons 


  Right for certainty for condition and right to walk away if conditions are not met.

  Arcos brought wood which had 0.5cm thickness but some was over so Arcos rejected them because they did not meet the requirements but they could still be used. However, arcos had the right to damages and reject the wood if they did not meet the criterea.
• What was the Facts and Terms in Oscar Chess Ltd v Williams 


  Mrs Williams brought a 2nd hand car as a 1948 model and her son sold the car to Oscar chess and gave a discount. It was actually a 1939 model which was worth less so sued for breach of term, misrepresntation and repudiation of contract. It was rejected because age was not a warranty and there was an imbalance of knowledge
• What are conditions in a contract, what are the consequences of a breach and provide an example.

  Conditions are most important and central to a contract, it is an essential term which would create a contract.

  A breach would allow the other party to walk away because it is fundamental damage.

  Example: Glaholms v Hays- ship had to sail before 4th of Feb but sailed after due to winds. This was a breach of condition and had the right to terminate the contract.
• What are warranties and what happens if they are breached , provide a case example.

  Warranties are any secondary terms that are not central to a contract such as nature of goods, delivery dates etc.. (Q if the parties meant it to be central to the contract)

  If broken, parties can only claim for damages

  Schuler v Wickman- Wickman was supposed to visit manufacturers once a week and failed to do so. Schuler argued a breach of condition as it was expressly stated. It was a warranty and was allowed damages and not to walk away.
• What are Innominate terms, provide an example.

  These are neither conditions or warranties. The consequences are dependent on the seriousness of the breach. If it seriously deprives of benefit then it is a term. If it is minor it is a warranty.

  Hong kong Fir

  Bunge Coporation v Tradax Export SA
• What are the different methods of entering an implied term? (5)

  • Terms can be implied through statute (uses contract as a vehicle to repute terms)
  • Implied by common law- law says obligations are not filled under certain agreements
  • Implied by custom- where there is an ongoing relationship between parties and contracted a lot in the past under certain basis (in case paperwork goes wrong
  • Terms implied by course of dealings- prior conducted between parties
  • Terms implied by fact- the contract shows the issue would be addressed.
• What is implication by common law, provide 1 example

  Situations where the law states that there are obligations which are not filled under certain agreements.

  Liverpool City Council v Irwin- Tenants did not pay rent to protest poor conditions. LCC argued they had no duties because there was nothing on the counterparts. Irwin argued it was an implied term otherwise it would be unreasonable. The courts agreed that it was the responsibility of the Landlord but stated they did enough but vandalism caused the conditions not LCC. They tenants cannot withhold rent.
• Implication by Law (Employment contracts), provide one example

  Lister v romford ice and cold storage. Lorry driver reversed and injured his father (3rd party) he sued for negligence of employees. HoL held there was an implied term that the employee had a reasonable duty.
• What is implication of the course of dealings and provide 2 examples.

  Hollier v Rambler Motors- Hollier had his car repaired 3-4 times over 5 years garage and signed an exemption clause for damages. This time it was not signed. The car was damaged so sued for damage. Rambler agrued course of dealing. Hollier won because there was no consistency of course of dealing

  MCCutcheon v McBrayne- C's car sank due to negligence, usually the company gave exemption clauses which C signed but not this time. C wanted to sue for damages and was successful because he cannot be bound by previous dealings
• Provide 2 cases which are implied terms by customs?

  Perry and Another v Barnett- Contract was signed in Bristol to buy stocks in London stock exchanges (which had specific rules) however, was unknown in bristol so Perry and Another argued implied terms by customary means but was rejected because it was unknown to Bristol

  Britsih Crane Hire v Ipswich Plant Hire- Hire of crane via telephone and had 'standard' terms from previous dealings. Both had experience in the trade but the paper contract did not arrive so did stadard terms apply? Courts looked at customs so the phone call was enough
• What are implied terms in fact and name the two different tests used

  Facts need to be addressed by courts by implying a term of the contract (business/bystander test).

  Business efficacy test used if there is an commercial issue

  Officious bystander test, a term that can only be implied if it is so obvious it doesn't need to be incorporated.
• Name 2 cases which represent the concept of Terms implied by fact?

  The Moorcock- Ship owners enter a contract to use jetty for a ship, it was grounded at low water. The ship was damaged so the owners sued. The owner said the dock owners had to check the bed. It was successful because to use a jetty so there was an implied warranty to check if it would ground safely.

  Shirlaw v Southern Foundaries- work at SF On 10 years contract. It was taken over and sacked despite the contract so wanted damages. under implied term and stating that amending article would be detrimental. He was successful
• Which case demonstrates the difficulty in the concept of Terms implied in fact?

  Marks & Spensers PLC v BNP Paribas Security service- Under commerical lease, tenant can only terminate lease if paid 1 years rent. Tenant terminated and paid. Claimant (M&S) claimed it was entitled to repayment because it was implied. It was not implied, it is not necessary for business efficacy because it is not required to make a lease work. (Business efficacy was irrelevant)
• What did the case of Dick Bentley Productions LTD v Harold Smith Motors LTD outline and what was the principle?

  Dick purchased a 2nd hand Bentley from Harold. Harold's employee understated mileage so Dick Harold on the ground that it was a term. Dick succeeded. Representation would be incorporated as a term even when representator is ignorant to the accuracy.

  Introduced test for incorporation: if a warranty is intended depends on the conduct of the parties and is inferred from the perspectives of an intelligent bystander.
• Name and explain 2 cases which support the concept of Innominate terms

  Bunge coporations v Tradax export SA- Tradax gave late notice of soya bean meal to Bunge so sues for damages for wrongful repudiation. Tradax argued innominate term Bunge suceeds because time was not innominate.

  Hong kong Fir- delivered a sea-worthy ship but required maintenance. Owner had a incompetent engineer, there were breakdowns and delays so sought repudiated the contract. This was not fundamental to the condition and the delays. there was no fustration. Therefore, it was classed as not sufficiently serious.
• What was the basis and facts of the case of Harlingdon& Leinster exnterprises LTD v Christopher hull Fine arts.

  Conditions

  Harlington purchased 2 'genuine' paintings but was fake. So sued for an inaccurate description under s13 of the SGA 1979. This did not suceed because Hull used experts so did not reply on description. S13 only applies to goods sold ny description.
• What was the basis of Miller v Hancock?

  Implied term

  Necessary implication to keep an agreement between D and tenant to keep stairs in acceptable conditions
• What was the principle under the case of Henry Kendall & Sons (A Firm) v William Lillico & Sons Ltd ?

  Implied term

  Henry owned chickens and brought food from william which was moudly and killed chickens. William purchased from 3rd parties through oral contracts which state dthat william takes responsibility for latent defects which was incoproated. William claimed he never read it despite it being on a note. William sues and 3rd party relies on exclusion clauses. 3rd party breached the terms and was incoporated but was not clear enough.
• What was the principle stated in Reigate v Union Manufacturing (Ramsbottom) Ltd

  Cockburn CJ- If a party makes an agreement that depends on certain existing conditions, they implicitly agree not to do anything that will disrupt the conditions as the agreement only works if those conditions remain unchanged
• In the case of Reigate v Union Manufacturing (Ramsbottom) Ltd , what does it establish?

  Terms implied by fact- intentions of both parties even if they dont explicitly state them

  Terms implied by law- Achieve fairness and subsantial justice by statute or juridical decision.