Contract - terms

Question 1

Three means by which express terms can be incorporated

Answer 1

1. Signature
2. Reasonable notice
3. Consistent course of dealing

Question 2

Express terms

Will will signature NOT result in incorporation of terms?

Answer 2

a) term is illegible
b) term has been misrepresented, and innocent party reasonably relied on inaccurate description
c) term unsual/ onerous, and not fairly and reasonably drawn to party’s attention

Question 3

Express terms

When will terms be incorporated by reasonable notice? (4)

Answer 3

• must be given at or before time of contract
• nature of the document: is it one on which a reasonable person would expect there to be contractual terms? e.g. a term on the back of a ticket that someone was given after paying for the hire of a deck chair was not held to be a term of contract
• big red hand rule
• if term on back of document - are there words drawing it to party’s attention?

Question 4

Express terms

What is previous consistent course of dealing?

(incorporation of terms)

Answer 4

Regular dealings in the past, all on exactly the same terms and conditions

Question 5

Express terms - classification

Why might classification of terms be necessary?

Answer 5

Depending on the type of remedy sought - any breach will attract damages; not all will attract termination.

Question 6

Express terms - classification

How might words in a contract be used to classify terms (2)

Answer 6

Either
a) by expressly identifying a term as a condition or a warranty; or
b) by specifying the consequence of the breach

Question 7

Express terms - classification

How will the court classify a term if no express wording? When might they need to do so even if there is express wording?

Answer 7

1. Will look at circumstances and determine whether parties intended breach of a particular term to give rise to termination
2. Might also be the case when the person who drafted the contract didn’t necessarily understand the legal meaning of the specific words used

Question 8

Express terms - classification

Judicial recognition? Example?

Answer 8

Some terms judicially recognised as one or the other. E.g. ‘expected ready to load’ clauses in charter parties are conditions

Question 9

Express terms - classification

What’s a warranty?

Answer 9

Minor term - breach will only ever attract damages

Question 10

Express terms - classification

What’s a condition? What is the effect of a breach? Effect of a minor breach?

Answer 10

1. Important term
2. Innocent party has the option to terminate future performance in addition to claiming damages - can choose whether to terminate or affirm
3. Effect of a minor breach is the same: the point is that the term is important

Question 11

Express terms - classification

What’s an innominate term?

Answer 11

‘wait and see’ - remedy will depend on the ultimate effect of the breach. Only if effectively deprived party of substantially the whole benefit can they choose to terminate

Question 12

Implied terms

Four types of implied term

Answer 12

1. Implied by custom
2. Implied in fact
3. Implied in law
4. Implied by statute

Question 13

Implied terms

When will a term be implied by custom? When will it not?

Answer 13

If reflective of well-known customs of a particular trade.
Won’t be implied by custom if it contradicts an express contractual term.

Question 14

Implied terms

When will a term be
a) implied in fact?
b) implied in law?

Answer 14

a) something so obvious that it goes without saying - implied if contract would be unworkable without relevant term
b) e.g. implied term of trust and confidence

Question 15

Implied terms

Three statutes which imply terms into contracts? Application?

Answer 15

1. Sale of Goods Act 1979 (business to business)
2. Sale of Goods and Services Act 1982 (business to business - contracts for service, and for supply of both work and materials)
3. Consumer Rights Act 2015

Question 16

Implied terms

Three key terms in SGA 1979? Classification? Liability?

Answer 16

1. seller has right to sell goods
2. goods match description
3. of satisfcatory quality, including satisfactory for the particular purpose
   All conditions. Strict liability. Innocent party can reject goods and get a refund.

Question 17

Implied terms

Bars to rejecting goods under SGA 1979?

Answer 17

• if buyer has accepted goods e.g. intimated acceptance or kept goods beyond a reaonable time
• in relation to description/ quality, if breach is so slight that rejection would be unreasonable

Question 18

Implied terms

Three conditions in the SGSA 1982?

Answer 18

• Matching description
• Right to tranfer
• Satisfactory quality (including for purpose)

Question 19

Three innominate terms in the SGSA 1982? When will 1. and 2. be implied?

Answer 19

1. Reasonable care and skill
2. Reasonable time
3. Reasonable sum charged

Only in the absence of an express agreement

Question 20

Implied terms

Terms in the Consumer Rights Act

Answer 20

1. Satisfactory quality
2. Fit for express or implied purpose
3. Correspond with description
4. Seller’s right to sell
5. Reasonable care and skill, reasonable price, reasonable time

Question 21

Implied terms

What are consumers’ rights re. enforcing terms about goods? Section number?

Answer 21

s 19
a) short-term right to reject and get full refund;
b) right to repair or replacement; and
c) right to price reduction, or final right to reject and get a partial refund

Question 22

Implied terms

Can a consumer claim common law damages in addition to seeking a s 19 remedy?

Answer 22

If s 19 remedies don’t fully compensate, then yes, possibly.

Question 23

Implied terms

Time limits under the CRA 2015.
a) short-term right to reject?
b) perishable goods?

Answer 23

a) time limit for short-term right to reject non-perishables is 30 days after they have been bought/ delivered/ installed, unless agreed otherwise

b) perishables: no longer than the goods could reasonably be expected to last

If goods do not conform to the contract at any time within six months of the date of delivery, they will be taken as not having conformed to the contract on that day

Question 24

Implied terms

Consumers’ rights to enforce terms about services/ work

Answer 24

a) if breach of express term relating to performance of the service, or implied term of reasonable care and skill, consumer can require repeat performance, or a price reduction
b) if breach of implied term of reasonable time, right to a price reduction