OCR A-Level Law: Contract Terms

what are the three things express terms can be categorised as

- condition

- warranty

- innominate terms

condition

a failure to perform the obligation destroys the purpose of the contract

Poussard v Spiers

what happens when a condition is breached

the contract ends via repudiation

warranty

minor term, does not end the contract as a breach is not detrimental

Bettini v Gye

what happens when a warranty is breached

there is no right for repudiation - the claimant is eligible for damages

innominate terms

neither a condition or a warranty - can be viewed as both

Hong Kong Fir Shipping v Kawasaki

what happens when an innominate term is breached?

depending on the severity and the impact of the breach the contract may be able to be repudiated

what makes a statement become considered as term?

...

couchman v hill

if a statement is so important that a party would not have entered into a contract without it, its likely to be a term

oscar chess v williams OR dick bentley v harold smith motors

if a statement is made by a person with specialist knowledge/skill it is likely to be a term

routledge v mackay

the longer the period of time that elapses between the statement and the contract the less likely it is to be deemed a term ALSO if its written in the contract or not

ecay v godfrey

if the seller makes a statement but informs the buyer that they should verify it this is unlikely to be a term of the contract - more likely to be a representation

schawel v reade

if the defendant is relying on the statement its likely to be a term

express terms

agreed by the party when the contract is made - appears explicitly in the contract and they're bound by it

Goss v Lord Nugent

L'Estrange v Graucob

if you sign a contract, you are bound to it even if you don't read it

what helps decide whether oral terms are included in written contracts

- nature of document

- whether it was brought to the party's attention

- whether it was included at the time when the contract was made

- whether there had been any prior course of dealings

nature of document

parker v south eastern railway - likely to keep a receipt

chapelton v barry - back of a ticket, unlikely to have noticed them and not intended to form part of contract

brought to attention of party

thompson v lms railway - whether reasonable steps are taken to draw the term to the attention of a party

included at the time the contract was made

olley v malborough court hotel - if its not available at the time the contract is made its not a term

onerous and unreasonable terms

interfoto v stiletto - must prove it has been fairly and reasonably drawn to the other parties attention

previous course of dealings

hollier v rambler motors - if they have had previous agreements

implied terms

terms which do not appear in the contract but exist because of statute, the courts or custom

what are the types of implied terms

- business efficacy

- implied by custom

- implied by prior dealings

- implied terms under the reasonable person

business efficacy

the courts will imply a term into a contract if the term is necessary to make sure that the contract works on a business like basis - this requires the bystanders test

bystanders test

1. is the term necessary to make the contract effective? (The Moorcock)

2. if the parties had thought about it, would they have agreed that the suggested term was obviously going to be in the contract (schawel v reade)

terms implied by custom

a term may be implied if it reflects what are regarded as the well-known and legally binding customs of a particular trade however, a term will not be implied by custom if it would contradict an express term of the contract

Hutton v Warren

terms implied by prior dealings

terms implied by the fact they have been accepted in previous dealings (Hillias v Arcos) however this will not apply if they would have not agreed to them had they thought about them (Shell UK v Lostack Garage)

implied terms under the reasonable person

would a reasonable person have understood the intention of both parties in the context of the contract

Egan v Static Control

how is reasonableness to be judged

objectively - the courts are not concerned with an hypothetical answer of parties - must be from a position of notional reasonable people in the position of the parties at the time of contracting

M&S v BNP

statute used for implied terms for business-to-consumer

consumer rights act (2015)

what sections cover goods?

s9, s10, s11

what sections are remedies for goods?

s20, s23, s24

s9

goods must meet the standard that a reasonable person would consider satisfactory

s10

good should be reasonably fit for purpose

s11

goods should match their description

what sections cover services?

s49, s52

what are the remedies for services?

repeat performance, right to price reduction

s49

treated as including a term that the trader must perform the service with reasonable care and skill

s52

must be performed within a reasonable time where the contract doesn't express a specific time

statutes used for implied terms for business-to-business

- Sales of Goods Act (1979)

- Sales of Services Act (1982)