Terms
Types of Terms
Conditions
A term which is fundamental to the contract - failing to perform this term would make the whole contract meaningless. (Poussard v Spiers) Breaking a condition allows repudiation and/or damages.
Warranties
A minor or secondary term to the contract. The contract is not meaningless if it is breached. (Bettini v Gye) Breach of a warranty allows a party to sue for damages only.
Innominate Terms
A term which cannot be identified as either a condition or warranty until it is breached. (Hong Kong shipping v Kawasaki) The court will look at the effect of the breach to determine what it is - has it substantially deprived the party of the benefit of the whole contract.
Express Terms
Pre-contractual statements that become a part of the contract as a term. In order for a statement to be a contract term, it must be incorporated into the contract and the courts will consider:
Importance attached
Where parties communicate how important an aspect is then it will be considered as incorporated into the contract as an express term. (Bannerman v White)
Special Skill or Knowledge
Where one party has special skill or knowledge statements they make will be considered incorporated as express terms. (Oscar chess v Williams)
Timing of the Statement
Courts will look at when the statement was made to consider if it was incorporated or not - the greater the time between the statement the less likely it is for it to be incorporated. (Routledge v Mckay)
Agreements in Writing
Courts will look at what it is actually written/included in the contract. if something is not written it isn't likely to be incorporated. (Routledge v Mckay)
Implied Terms
Implied by Fact - terms that are not laid down in the contract but it is assumed both parties would have intended to include it. (Equitable life assurance v Hyman) Courts consider if it is:
Reasonable and equitable
Capable of Clear expression
Compatible with any express terms in the contract.
So obvious it goes with out say. "Officious bystander test".
Necessary to give business efficacy to the contract. "Business efficacy test'. (The Moorcock)
If a 3rd party was there at the point of making the contract and suggested the term, both parties would respond with "of course". (Shirlaw v Southern foundries)
If the contract makes business sense without the term it will not be included. (BP refinery v Shire of Hastings)
Implied by Statute - terms that the law says have to be included, regardless of the wishes of the parties. (Liverpool City council v Irwin spring v Guardian assurance)
Business to Consumer contracts (Consumer rights 2015)
Supply of goods:
S.11-as described
S.20-right to reject goods(full refunds within 30 days)
S.10-fit for purpose
S.23-retailer has a right to repair/replace goods
S.9- satisfactory quality
S.28-delivery (retailer responsible for goods until in possession of consumer)
Faults discovered within 6 months are presumed to have been there since purchase unless retailers can prove otherwise.
Supply of services:
S.51-reasonable price
S.52-within a reasonable time
S.50-reliance on information said or written=binding term
S.55-redo or perform again at no extra cost
S.49-perform with reasonable care and skill
S.56-price reduction, up to 100% and refund within 14 days.
Unfair terms in consumer contracts - S.62 CRA 2015
Not binding on the consumer
Must be prominent and transparent
Unfair terms are those which cause significant imbalance in rights/obligations to detriment of consumer.
Exclusion Clauses
Terms which limit or exclude contract liability. They must cover the alleged breach and must be incorporated by:
Signature - If a document is signed at the time of making the contract its contents becomes a term of the contract. (L'estrange v Graucob)
Reasonable Notice - if separate written terms are presented, they only become incorporated if it can be said the recipient had reasonable notice of them. (Parker v South eastern railway)
Previous Course of Dealings - If previous contracts contained exclusion clauses then these may apply to subsequent transactions. (Spurling v Bradshaw)
Business - consumer contracts is covered under s.62 CRA 2015.
Business - Business contracts is limited under Unfair contract terms act 1977 and imposes limitations.
UCTA 1977
S.3 - non-performance in standard contracts are assessed by reasonable test.
S.11 - is the term "reasonable and fair in all the circumstances which where known when making the contract".
S.2 - liability for death/PI from negligence cannot be included.
Schedule 2 - the S.11 test considers:
S.12 - dealing as a consumer in the course of business
Inducements to the contract
Knowledge of the industry
Barganing power of each party
Is it reasonably practicable to comply
Were the goods made for a specific order