Contract Terms

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  • Created by: Lucy
  • Created on: 18-07-15 09:01
Step 1
Distinguish contract terms from representations - Knowledge, timing, importance
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Step 2
Is this term part of the contract - express e.g. in contract, implied - custom, statute, courts, necessit
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Step 3
is it a warranty or condition - Warranty, Inominate term, condition
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Step 4
Is there a vaild exclusion clause - Damaged only if warranty, Injured party can discharge contract and claim damages if inominate or condition
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Term
Any statement forming part of the contract
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If term is broken
Injured party can bring action for breach of contract
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Representation
Statement made by one party designed to induce the other party to enter into the contract - doesn't form part of contract but if proven to be untrue can bring action to misrepresentation
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Determining statement is representation or term, court will look at
Timing - when statement made and importance
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Bannerman V White (importance)
W but hops from B - asked if sulphur been used, adding that if it had he would not bother ask the price. B replied no. Held: Presence of Sulphur was of such importance that B's statement constituted a term of the contract
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Condition
Major term of contract which goes to heart of contract, very essence of contract.
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Breach of condition
allows injured party to repudiate (reject) contract or continue with it and claim damages from the breach.
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Poussard V Spiers and pond
P, opera singer, missed rehearsals and first few performances. Held: Breach of contract, entitled S to reject contract and hire replacement
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Warranty
less vital, although still important, term of contract
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breach of warranty
injured party entitled to damaged but they can't reject contract completely.
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Bettini V Gye
G missed some rehearsals for opera. Held: Breach of warranty only. B not entitled to repudiate contract.
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Innominate terms
terms classified as warranties or conditions in a contract can be classified as innominate if the consequences of breach of term were more or less serious than originally envisaged when contract was made.
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If its unclear if it is term or condition
courts will decide
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Express term
terms expressly stated in the contract
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Implied Term
a term deemed to form part of a contract, even though not expressly mentioned.
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terms can be implied by
Statute - e.g. Sale of Goods Act 1979 imposes conditions relating to the sellers right to sell, the condition and fitness for purposes of goods sold.
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Custom - Hutton V Warren
H, tenant farmer, entitled to a fair allowance for seeds and labour at the end of his tenancy because it was customary for land owners to pay such allowance.
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The courts - avoids gross unfairness - not to make it fairer - The Moorcock
Ship badly damaged after settling on a ridge of rock beneath mud at low tide. Court implied term of safe mooring, as both parties knew the ship had to be moored at low ride for loading to be completed.
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Exclusion Clause
Court term that attempts to exclude or limit liability for breach of contract or negligence.
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3 levels of protection
Common law - applies to all, unfair contract terms Act 19777 (UCTA) - applies mainly where party is in business and other is a consumer. Unfair terms in consumer contracts regulations 1999 (UTCCR) applies when one party is human consumer, not busines
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In common law, 3 ways of incorporating exclusion clause
Signed doc, timing, clarity, knowledge of clause - ticket good, receipt bad, previous dealings. contra proferentem - interpretation
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Thompson V Lms railway (knowledge of clause)
T, blind, asked niece to buy ticket. Ticket stated 'issued subject to the conditions in the companys timetable' Held: Valid constructive communication because railway ticket was a contractual document
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Olley V marlborough court hotel - Clear notice before or at time contract is made
Exclusion notice on back of hotel room door was held to be invalid because contract had been made when guest checked into hotel.
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Hollier V Rambler Motors - Previous course of dealings
H had car serviced 5 times in 5 years by R. Each time H signed form stating 'company not responsible for damage caused by fire to customers car on premises' 6th time didn't ask to sign and car destroyed in fire. Held: previous dealings
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Contra proferentem rule
Against person trying to rely on it
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Curtis V Chemical cleaning - Varied by oral statement
C took dress to cleaners, signed contract. Asked what contract bound her to, employee said disclaimed liability to damage done to beads and sequins on dress. Dress came back stained. Held: Misrepresentation. Exclusion was for all damages
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Repugnancy rule
undos the whole point of contract - allows court to strict out repugnant exclusion clauses
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Doctrine of fundamental breach
exclusion clause may be allowed even if it allows a fundamental breach of contract, provided the clause is 'reasonable'
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Photo productions ltd V securicor transport ltd
S guard premises of P. S employee started fire - destroyed premises. S had good recruitment + training procedures couldn't have reasonably foreseen actions of employee. even loosing teeth in fire. Held: Clause reasonable when considering procedures
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Unfair Contract terms Act 1977
Applies primarily where one party is in business and other is a consumer. Includes individuals and non-expert business buyers.
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Who would not be covered by UCTA 1977
Transactions between two private individuals
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Main provisions of UCTA 1977
Exclusion clause in consumer contracts with standard terms + conditions are void unless reasonable
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Main provisions of UCTA 1977
Exclusion clauses in consumer contracts that attempt to exclude liability for breach of conditions relating to description, sample, quality, and fitness for purpose under Sale of Goods Act are void
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Main provisions of UCTA 1977
Clauses attempting to restrict liability for other losses arising for negligence will be void unless shown to be reasonable in any business contract whether the other party is a consumer or not.
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Main provisions of UCTA 1977
Clauses attempting to restrict liability for death or injury arising from negligence are void.
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Main provisions of UCTA 1977
Can't exclude implied condition that seller has legal title in any contract.
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UCTA
States that any term in contract must be fair and reasonable having regard to all circumstances
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What we mean by reasonable - Court consider the following
Strength of parties bargaining po, inducements - reduced price, knowledge of existence + extent of exclusion c, compliance with conditions that restrict customers rights was practicable, goods built to customer needs
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What we mean by reasonable - Court consider the following
Availability of alternative suppliers + insurance, trade custom, previous dealings between the parties
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Smith V Eric S Bush
S commissioned E to survey house. S bought the house + subsequently had to make repairs he didn't budget for. Held: E's standard exclusion clause disclaiming liability for accuracy + validity of report was deemed unreasonable given straightforwardnes
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Unfair Terms in consumer contracts regulations 1999
Applies to 'standard form' (e.g. terms not individually negotiated) contracts between business + natural consumer, not companies, acting outside course of business. e.g. sky TV.
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Unfair Terms
Causes significant imbalance between parties rights + obligations, contrary to requirement for good faith
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Determining good faith courts consider
Bargaining power, inducements, whether goods were for special order, fairness of supplier in dealing with customer.
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Unfair term can be void by
courts
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Other cards in this set

Card 2

Front

Is this term part of the contract - express e.g. in contract, implied - custom, statute, courts, necessit

Back

Step 2

Card 3

Front

is it a warranty or condition - Warranty, Inominate term, condition

Back

Preview of the back of card 3

Card 4

Front

Is there a vaild exclusion clause - Damaged only if warranty, Injured party can discharge contract and claim damages if inominate or condition

Back

Preview of the back of card 4

Card 5

Front

Any statement forming part of the contract

Back

Preview of the back of card 5
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