Contract S2a: Contract terms.

What is an express term?

A term that is put into the contract by one or both parties and which is expressly undertaken and agreed to by the parties.

The term may be written or oral.

What is an implied term?

A term which is not agreed to but which is implied into a contract in certain circumstances.

Terms may be implied by:

-common law (custom or trade usage); -the courts; -statute.

What is the parol evidence rule?

Once a written agreement has been signed by all of the parties, it cannot be changed by an oral agreement, except when fraud or a serious mistake is involved.

List the 3 ways by which a written term may be incorporated into a contract.

1) By signature.

2) By reasonable notice - must be BEFORE contract completed.

3) By a consistent and regular course of dealings - can be AFTER contract completed.

Explain incorporation by signature and the 3 exceptions where a signature is not enough for incorporation.

If a contractual document is signed then the clauses in that document will be incorporated in the contract, regardless of whether the claimant read the contract or not. Only the claimant needs to have signed the document.

Exception 1) signature is illegible.

Exception 2) misrepresentation.

Exception 3) the clause is unusual, onerous, and not reasonably drawn attention to.

Explain incorporation by reasonable notice.

A clause may be contained in an unsigned document or notice. The unsigned document or notice must be contractual in nature.

The party relying on the clause must have taken reasonable steps to bring the clause to the other party’s notice before, or at the time of the contract.

In determining if reasonable notice was given, a court will account for: -the position of the clause on the document; -it’s prominence; -and that unusual or onerous terms require greater notice.

Explain incorporation by a consistent and regular course of dealings.

A clause may be incorporated by a consistent (meaning communicated in the same format each time) and regular course of dealing. In this case it may be incorporated after the contract has been formed.

The dealings between the parties must have all been exactly on the same terms and conditions. There must be a sufficient number of these regular dealings (3 or 4 times a month for 3 years).

Sale of Goods 1979 - terms implied for the…

sale and supply of goods and/or services between businesses (BUSINESS TO BUSINESS).

Description (s.13(1) Sale of Goods 1979):

Where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond to the description.

Satisfactory quality (s.14(2) Sale of Goods 1979):

Implied term that goods supplied under contract are of satisfactory quality.

Standard of quality (s.14(2)(A) Sale of Goods 1979):

Goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking into account any description of the goods, the price, and all other circumstances.

Fit for purpose (s.14(3) Sale of Goods 1979):

Goods are reasonably fit for the purpose the buyer expressly or impliedly makes known to the seller

This is the case whether or not that purpose is one which such goods are commonly supplied, except if it would be unreasonable to rely on the skill or judgement of the seller.

Sale of Goods and Services Act 1982 - terms implied into contracts for…

a service/work or contracts that involve a supply of works or materials between businesses (BUSINESS TO BUSINESS).

Reasonable care and skill (s.13 Sale of Goods and Services Act 1982):

Where the supplier of a service is acting in the course of a business, the supplier will carry out the service with reasonable care and skill.

Reasonable time (s.14 Sale of Goods and Services Act 1982):

In the absence of an express term, the service will be carried out within a reasonable time.

Reasonable price (s.15 Sale of Goods and Services Act 1982):

Where the price for the service has not been fixed, there is an implied term that a reasonable price will be charged.

Consumer Rights Act 2015 - terms implied into…

business to consumer contracts for the sale of goods and/or supply of goods and services (BUSINESS TO CONSUMER).

Satisfactory quality (s.9 Consumer Rights Act 2015):

Implied term that goods supplied under contract are of satisfactory quality.

Fit for purpose (s.10 Consumer Rights Act 2015):

Goods are reasonably fit for the purpose the buyer expressly or impliedly makes known to the seller

This is the case whether or not that purpose is one which such goods are commonly supplied, except if it would be unreasonable to rely on the skill or judgement of the seller.

Description (s.11 Consumer Rights Act 2015):

Where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond to the description.

Reasonable care and skill (s.49 Consumer Rights Acts 2015):

Where the supplier of a service is acting in the course of a business, the supplier will carry out the service with reasonable care and skill.

Reasonable price (s.51 Consumer Rights Act 2015):

Where the price for the service has not been fixed, there is an implied term that a reasonable price will be charged.

Reasonable time s.52 Consumer Rights Act 2015):

In the absence of an express term, the service will be carried out within a reasonable time.

On breach of the Consumer Rights Act 2015 in relation to the supply of goods, a consumer has the right to (which possible 3 remedies, and in what order?):

1) The short term right to reject and get a full refund (Non-perishable goods: 30 days. Perishable goods: no longer than the goods would be expected to last).

If expired then:

2) The right to repair or replacement (if appropriate).

Or if not appropriate:

3) The right to a price reduction or the final right to reject and get a partial refund to reflect the consumer’s use of the goods.

On breach of the CRA 2015 in relation to the supply of services/work, the consumer has the right to:

Firstly, the right to order repeat performance.

Price reduction if repeat performance is not reasonable.

On breach of s.52 Consumer Rights Act 2015 implied term that work will be done in a reasonable time, the consumer has the right to:

The right to an appropriate price reduction for the delay.

Will any implied statutory terms apply to contracts where a consumer sells (e.g. an individual selling 2nd) to another consumer?

No.