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Contents of a contract (Implied terms (Terms implied by custom (Custom…
Contents of a contract
Terms of contract
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State what each party is obliged to do under the contract, each party must comply with terms or may be sued for breach
Expressed terms
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E.g. consideration, agreed price
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Implied terms
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Usually in case of conflict between express term and implied term, express term overrides implied term
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Terms implied by the Constitution
(This arises when a contract seeks to encroach upon any individual rights protected by the Constitution
Glover v BLN (1973))
Conditions, Warranties and Innominate terms
It is not always easy to determine if a terms is a condition or warranty, so the courts have introduced an ‘innominate’ terms as an alternative
Expressed and implied terms will be categorised as conditions and warranties depending on the importance of the term
Conditions
If a party breaches a condition of the contract, the injured party has a right to ‘terminate without notice’ and sue for breach of contract
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The most important terms – fundamental, e.g. selling price of a house or number of bedrooms, where a breach would have major consequences
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Warranties
Additional terms that do not form the basis of the contract and are not usually the terms that persuade the party to enter the contract
A breach of warranty does not entitle to repudiate the contract because it does not usually have the serious consequences
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