Chapter 28- Express & Implied terms

Question 1

What refers to the “terms” of a contract

Answer 1

• terms are the obligations of the parties.

Question 2

What are express terms

Answer 2

• These are terms agreed upon by the parties at the time of creating the contract. It can either be made orally or written

Question 3

Factors to be considered when incorporating terms in the contract

Answer 3

• Timing
• Special Knowledge
• Signature
• Importance of the term
• reduction of terms in writing
• The parol evidence rule

Question 4

TIMING:

Answer 4

If a statement is taking a significantly longer period of time then the courts will be reluctant to add the statement to the contract

Question 5

SPECIAL KNOWLEDGE :

Answer 5

• Courts can accept statements made by parties with special expertise or knowledge that is relevant to the contract .

Question 6

IMPORTANCE OF THE TERM:

Answer 6

This means that the term has to be of some importance and can amount to a condition

Question 7

REDUCTION OF TERMS IN WRITING

Answer 7

If an agreement has been partly reduced to writing then the courts will have to consider whether the contract only includes the written terms or should be concluded as partly written or partly oral

Question 8

INCORPORATION BY SIGNATURE

Answer 8

The general rule is that if a person has signed a contract, then they are bound by the terms of that contract whether or not they have read it.

Question 9

When does the ‘parol evidence rule’ apply

Answer 9

When a party to a written agreement want to say that the written document does not fully reflect the entire agreement and that some of the agreement was done orally

Question 10

Evaluate the use of the parol evidence rule

Answer 10

• This reduces misunderstandings and the risk of one party later claiming unrecorded terms.
• the rule reduces the likelihood of one party fabricating or exaggerating terms not included in the written contract.
• Written agreements provide a clear, definitive record of the parties’ terms.

Question 11

What are the exceptions for the rule

Answer 11

• there is evidence of trade/custom usage (implied terms)
• Oral evidence can cite as evidence to show that the contract would not be operative until specified
• a party can quote evidence to show that the contract was not binding e.g incapacity
• the written document is being used to show that there was a prior oral agreement but does so inaccurately
• there is a collateral agreement

Question 12

Evaluate express terms

Answer 12

• They provide clear guidelines on the obligations of each party
• Expressly agreed terms reduce ambiguity and miscommunication
• In standard form contracts, one party usually dictates the terms of the contract making it unfair to the weaker party
• poorly drafted terms can lead to disputes
• There is overreliance on written documents even when there is verbal understandings between the parties