Express and implied terms

What are express terms?
depends primarily on words used by parties (whether written down or not).
1 of 27
More info on express terms
• A contract may be agreed upon orally or in writing, or both. • In a written contract, the contents will be apparent from the document: in case of a dispute, the judge will have to decide on interpretation of a term within the contractual document.
2 of 27
What problems do they pose?
• Oral contracts pose evidentiary problems: in case of a dispute, the judge has to decide what the parties have agreed upon.
3 of 27
What are implied terms?
terms not expressly agreed upon
4 of 27
What are implied terms?
Not all terms of the contract may be expressly set out by the parties. Court can find that other terms have to be implied into the contract. Such terms may be implied from one of three sources: statute, custom, courts (ie common law).
5 of 27
Terms implied by statute
Parliament has, in many instances, seen it fit to imply terms into contracts. These can be mandatory or default rules (ie would apply only if parties do not explicitly exclude them).
6 of 27
What is an example?
Sale of Goods Act 1979 ** 12-15 imply several terms into all contracts for sale of goods, in order to protect buyers and let them escape a contract if need be
7 of 27
which sections show this?
s. 13(1) – goods to correspond with description. s. 14(2) – goods must be of satisfactory quality. s. 14(3) – goods must be reasonably fit for purpose.
8 of 27
What is a second example of terms implied by a statute?
s. 13 Supply of Goods and Services Act 1982 – services will be carried out with reasonable care and skill. If goods/services do not live up, there is a claim here for breach.
9 of 27
When do these acts apply?
Both of these examples only apply when it concerns two businesses dealing with each other (Since CRA of 2015)
10 of 27
What is the Consumer rights act 2015?
s. 11 – goods to correspond with description. s. 9 – goods must be of satisfactory quality. s. 10 – goods must be reasonably fit for purpose. s. 49 – service must be supplied with reasonable care and skill. These provisions cant b excluded from contr
11 of 27
Terms implied by Custom
Term can be implied into a contract if it is custom or usage in field or market within which parties are operating. Only possible if custom does not contradict term of contract. If custom is 'notorious (everyone knows of it), certain & reasonable' it
12 of 27
it will bind even if parties are unaware of it
g
13 of 27
example?
Peter Darlingston Partners Ltd v Gosho Co Ltd [1964] 1 Lloyd’s Rep 149 – contract for sale of ‘pure’ canary seed. Seed only 98% pure. Can buyer reject the goods? They were bound by contract
14 of 27
Terms implied by courts
They can apply a term as a matter of fact, or a term as a matter of law. It is most common to be a matter of fact rather than a matter of law
15 of 27
Implied by fact
Term implied in fact is implied into the individual contract to give effect to what the court perceives to be unexpressed intention of the parties.
16 of 27
What are the two tests for application?
1- Officious bystander test (something that is there that hasn't been realise) 2- Business efficacy test
17 of 27
Officious bystander test
Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206: 'something so obvious that it goes without saying'
18 of 27
Business Efficacy test
The implication is necessary to give the transaction such business efficacy as the parties must have intended.
19 of 27
What case is an example?
The Moorcock (1889) 14 PD 64 - claimant rented moorings from defendant. Ship damaged while unloading cargo. Is defendant liable for the damage caused to the boat when the co
20 of 27
contract was to dock the boat and take cargo.
Courts were happy that it had to be necessary to the contract that it was safe to land.
21 of 27
What is the focus of the Business efficacy test?
The focus isn't on obviousness, but necessity. The term won't be included simply because it would be reasonable
22 of 27
why?
The court (allegedly) is not making a contract for the parties, but merely giving effect to the unexpressed will of the parties.
23 of 27
Officious Bystander vs Business Efficacy
The relationship between the officious bystander and business efficacy tests has not been entirely clear.Lord Hoffmann:what does the contract mean to a reasonable person having all the relevant background information?
24 of 27
Thus, arguably, implication of a term = interpreting the contract.
g
25 of 27
What do the SC say on the two different tests?
the tests are still different, by efficious bystander, we're talking about commercial and practical coherence and business efficacy is of necessity. Lord Hoffmann was wrong to say they were different things. First contract should be interpreted
26 of 27
Terms implied by law
These terms are implied into all contracts of a certain type, not just into the particular contract in question. This implication is based on the nature of the contract, rather than the supposed intention of the parties.
27 of 27

Other cards in this set

Card 2

Front

More info on express terms

Back

• A contract may be agreed upon orally or in writing, or both. • In a written contract, the contents will be apparent from the document: in case of a dispute, the judge will have to decide on interpretation of a term within the contractual document.

Card 3

Front

What problems do they pose?

Back

Preview of the front of card 3

Card 4

Front

What are implied terms?

Back

Preview of the front of card 4

Card 5

Front

What are implied terms?

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Law resources:

See all Law resources »See all Contract resources »