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The Law of Contract (Contents and Interpretation) - Coggle Diagram
The Law of Contract (Contents and Interpretation)
Two Questions
Incorporation:
What are the legally enforceable promises in the contract? What are the terms in the contract?
Interpretation:
What do those promises require us to do? How do we interpret the terms?
The terms of the contract
Highlights rights and obligations of the parties. We work this out by looking into
what's contained in the offer and the acceptance.
Express terms:
terms that the parties specifically agreed to (written contract/oral contracts/could be website t&c's)
Implied terms:
terms not specifically agreed to, but which are still part of the contract because the law provides this result
Express Terms
How do we determine if a precontractual statement was a term (part of contract)?
The
importance of the statement
in the context of the contract
The
time lapse
between the time the statement was made and the time at which the contract was formed
The
relative knowledge and expertise
of the parties
Oscar Chess v Williams: not contractual term
Dick Bentley v Harold Smith: find contractual term
Ross v Allis Chalmers: statement is representation, not contractual term
Parol evidence rule=
where parties intended their written contract to contain all the agreed terms, evidence of other terms will not be allowed (oral terms not allowed as written contract is controlling)
Exception
Collateral contracts:
are an exception to the parol evidence rule, where a promise might not be a term of the main written contract, but might form part of a collateral contract:
a second (purely oral) contract with only one term
The statement must be
a promise
and must have been
intended to have contractual effect
The statement must
not be inconsistent
with the main contract
The promise must have been
given consideration
for the collateral contract (usually be entering into main contract)
Express contractual terms:
Important when reviewing remedies available when breach has been made
Conditions:
very important. "without this term, I wouldn't have entered into the contract"
Warranties:
less important, still legally binding
Innominate terms:
neither, until the effect of their breach is known
Express terms
can be incorporated via signature or reasonable notice;
explored through exclusion clauses
Signature
Regardless of whether the party has read and understood the document, they are bound by terms contained within the contract
Toll v Alphapharm: exclusion clause was apart of contract
Le mans Grand Prix v IIlliadis: exclusion clause not binding
Exclusion clause=
clause that purports to limit or exclude one party's liability for loss incurred by the other
Reasonable Notice; must show that clause was brought to the notice of the other party
before or at the time
contract was made
Causer v Browne; no reasonable notice
Olley v Malborough Court, Alameddine: no reasonable notice at required time
Thornton v Show Lane: reasonable notice
Interpretation; exclusion clauses
Contra Proferentem rule=
when the parties do not have equal bargaining power (interpret clause against the party who drafted and now relies on it)
Insight Vacations v Young; exclusion clause doesn'y apply to particular situation
Exclusion clause protecting against
negligence
, but must have clear words to protect
Alameddine v Glenworth Valley Horse Riding; no clear words about injury clauses
Exclusion clause not interpreted by courts if outside of scope of contract, depending on words used
Council of the City of Sydney v West; outside of scope of contract
Meyer v Kalanick; inside scope as worded broadly
Terms in online contracting;
click treated as signature
Click-wrap agreements (presented with agreement button): clicking 'accept' is equivalent to signing a written contract
Toll v Alphapharm
Browse-wrap agreements (terms on a different page): question will be whether reasonable notice was given of the terms
Olley v Marlborough Court
Specht v Netspace Communications; not incorporated click - settled through arbitration
Meyer v Lakanick; not incorporated t&c's - settled through arbitration
Implied Terms;
not specifically agreed to, but still apart of contract because law provides this as a result
How?
The court (common law)
Custom or trade usage (common law)
Parliament (statute)
Reasons why?
May be impossible to include everything into contract
No real pre-contractual negotiations e.g. buying coffee
Some events may not be predicted or anticipated by parties e.g. flood destroys farmers crops
The law recognises that some groups of people are particularly vulnerable and need protection via additional terms e.g. consumer law
Terms implied by the court to give 'business efficacy' to a contract (terms that are considered as "going without saying")
BP Refinery v Hastings Shire Council