Please enable JavaScript.
Coggle requires JavaScript to display documents.
Keeping Contracts, Interpreting Terms, Flexibile Terms, Fundemental…
Keeping Contracts
Assembling The Contract
Where contracts are oral/partly oral, the question is whether a statement made by one of the parties was a term. Statements are classified into puff, representation + term.
-
Representations = statements of fact made to induce other party to contract but themselves do not form part of the contract.
-
-
If parties produced written documents recording their understanding, court will presume they intended document to record entirety of understanding. Court won't attack weight to any other supposed terms on which they might otherwise have seemed to have agreed = parol evidence rule.
In deciding whether a statement is a representation or a term, court looks to importance of statement, relative knowledge, expertise of parties + whether one of the parties took responsibility for statements veracity.
-
parties can incorporate terms by referring to them in either oral discussions/written documents. Notice of incorporation must be given before contracts formed. The more onerous term, the greater the degree of notice is required.
notice is only required where term is contained in a signed document or a document to which party expressly agrees.
-
-
-
-
Interpreting Terms
-
contextual interpretation is grounded in meaning a contractual instrument would convey to the reasonable addressee. This requires reading all instrument against background of 'matrix of fact'.
Courts have power to rectify contracts if due to a mistake in verbal expression, the written instrument deviates from the parties' actual agreement. The evidentiary bar for rectification is very high.
Engaging in contextual reading requires certain triggers/thresh hold conditions to be met. Most important = ambiguity, misworning, changed circumstances.
Where parties have agreed in verbal terms but have failed to reach substantive agreement due to misunderstanding each other + where ambiguity cannot be resolved through as literal/contextual reading - the contract is void. Principle = 'mutual mistake.'
Contextual interpretation gives considerable discretion to the courts. Recent case law has shown a more cautious approach with courts emphasising the need to respect the parties' agreed wording.
Flexibile Terms
-
-
-
Certain types of terms which may on their face seem vague, are valid as they have a recognised meaning in commercial usage. This includes phrases like 'best endeavours' and 'reasonable'
An agreeement will not be enforceable if the terms are vague. Terms will not be treated as being too vague if a contextual reading can make it clear what the parties' rights and obligations are. Vagueness of an individual term won't make the entire contract void, unless the contracts unable to function without it.
Fundemental Changes
English law recognises 2 ways of dealing with unplanned contingencies : frustration + common mistake.
Common mistake is confined to 3 types of mistakes which are shared by the parties - mistakes as to the existence of the subject matter, mistakes as to the possibility of performance + mistakes as to a quality of subject matter. Common mistake renders a contract void. A court has no remedial discretion. A party who has paid a deposit/provided a benefit may have an action in restitutution but a party who has incurred expenses has no remedy.
Both doctrines are narrow + will only be applied ion exceptional circumstances Won't apply unless impact on the contract is fundamental - rendering it a thing 'radically different' (frustration) or 'essentially different' (common mistake). They will also not apply if the risk was expressly or implicitly allocated by the contract.
frustration is largely confined to 3 circumstances - impossibility, supervening illegaility, frustration purposes. Frustration discharges a contract with effect from the date of the frustrating event. the parties then no longer have any contractual obligations to each other BUT court has discretion to order any payment for benefits that have already been provided + to make some allowances for expenses that have been incurred.
Frustration applies to situations where circumstances have changed after contract was formed whereas common mistake applies where the parties have mistakenly assumed something to be true which was discovered to be false.