SQE1 Contract Law: Content and Classification of Terms

Flashcards covering the classification of contract terms (express and implied), incorporation methods, and statutory implied terms for business-to-business and business-to-consumer contracts under UK law.

Express terms

Terms that the parties have specifically and explicitly agreed upon, such as the price and the item being purchased.

Incorporation by Signature

The general principle that a person is bound by the terms of a contract they sign, unless the term is illegible, misrepresented, or unusual/onerous and not fairly drawn to their attention.

Incorporation by Reasonable Notice

The requirement that for terms in unsigned documents (like tickets or notices) to be part of a contract, the party must provide notice of them at or before the time the contract is made.

Incorporation by Previous Consistent Course of Dealing

A method where terms are incorporated due to a history of regular and identical dealings between parties over a long period.

Condition

An important contractual term; if breached, the innocent party has the choice to terminate the contract as well as claim damages.

Warranty

A minor contractual term; if breached, the only available remedy is damages, and the contract cannot be terminated.

Innominate (or intermediate) terms

Terms that are not classified as conditions or warranties at the outset; the available remedy depends on the ultimate effect and seriousness of the breach.

$$Hong\,Kong\,Fir\,Shipping\,Co\,Ltd\,v\,Kawasaki\,Kisen\,Kaisha\,Ltd\,[1962]$$

The legal case that established the concept of innominate terms and the 'wait and see' approach based on whether the breach deprived the innocent party of substantially the whole benefit of the contract.

Terms implied by custom

Contract terms implied to reflect well-known and legally binding practices of a specific trade, provided they do not contradict an express term.

Terms implied in fact

Terms not expressly agreed upon but implied by the court because they are necessary to make the contract unworkable or are so obvious they 'go without saying'.

Terms implied in law

Terms implied because the law views them as a necessary incident of a specific type of relationship, such as an employer's duty to provide a safe working environment.

Sale of Goods Act 1979 ($SGA\,1979$)

The primary statute implying terms like right to sell, correspondence with description, satisfactory quality, and fitness for purpose into business-to-business contracts for the sale of goods.

Section $14(2)\,SGA\,1979$

The implied term in business-to-business contracts that goods supplied must be of satisfactory quality, meeting the standard a reasonable person would expect.

Strict liability

A standard of liability where the seller is responsible for goods failing to meet statutory implied terms (like quality) regardless of whether the seller was personally at fault.

Supply of Goods and Services Act 1982 ($SGSA\,1982$)

The statute implying terms into business-to-business contracts for services and 'work and materials,' such as the requirement for reasonable care and skill.

Section $13\,SGSA\,1982$

An innominate term implying that a service or work in a business-to-business contract will be carried out with reasonable care and skill.

Consumer Rights Act 2015 ($CRA\,2015$)

The statute governing business-to-consumer contracts, implying terms for goods and services and establishing specific consumer remedies.

Section $49\,CRA\,2015$

The implied term in consumer contracts that work or services must be performed with reasonable care and skill.

Short-term right to reject ($CRA\,2015$)

A consumer remedy allowing the rejection of goods for a full refund, generally limited to $30$ days after purchase, delivery, and installation.

Sections $51$ and $52\,CRA\,2015$

Implied terms in consumer service contracts that, if not expressly agreed, work will be done for a reasonable price and within a reasonable time.