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INTRODUCTION
The terms (the contents) of a contract describe the duties and obligations that each party assumes under their agreement. Usually the parties to a contract state the terms expressly, and may choose to do so orally, or in writing, or in a combination of these methods. However, terms can sometimes be implied (required) by law.
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Representations or Terms
A representation is a statement which may have encouraged or induces one party to make the contract but is not itself part of that contract, while a term (refers to the contents of a contract) is a promise or undertaking that is part of the contract. Disputes generally centre around statements which have proved to be untrue: if that statement is a representation, it can give rise to an action for misrepresentation, whereas if it is a term, it can give rise to an action for breach of contract.
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Importance of Statement
A statement is likely to be seen as a term if the injured party has made the other party aware that had it not been for that statement, they would not have entered into the contract.
Case example: Bannerman v White (1861)
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1. The time test 2. The writing test 3. The skill and knowledge test.
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2. The Writing Test If the terms are in writing, then any oral statement is more likely to be a mere representation.
Case example: Heilbut, Symons & Co. v Buckleton (1913)
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Complete Terms
A legally binding agreement must be complete in its term otherwise there is no contract since the parties are still at the stage of negotiating the necessary terms.
Scammell v Ouston 1941
The facts: An agreement for the purchase of a van provided that the unpaid balance of the price should be paid over two years on hire purchase terms. Decision: there was no agreement since it was uncertain what terms of payment were intended. Hire purchase terms vary as to intervals between payments, interest charges to be added, an so on.
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Express Terms
An express term is a clear stipulation in the contract (they are terms of the contract and may choose to do so orally, or in writing, or in a combination of these methods.) which the parties intend should be binding upon them. Traditionally, the common law had divided terms into two categories.
1. Conditions 2. Warranties
See slide 26 for Implied Terms.
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: 1. Conditions
Express Terms
A condition is a major term which is vital to the main purpose of the contract. A breach of condition will entitle the injured party to repudiate the contract and claim damages. The injured party may also choose to go on with the contract, despite the breach, and recover damages instead.
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Express Terms:
1. Conditions (Contd)
Poussard v Spiers (1876)
The facts: Poussard was engaged to appear in an operetta (musical theatrical production) from the start of its London run for three months. The plaintiff fell ill and the producers were forced to engage a substitute. A week later Poussard recovered and offered to take her place, but the defendants refused to take her back. Decision: The court held that the defendant's refusal was justified and that they were not liable in damages. What chiefly influenced the court was that Poussard's illness was a serious one of uncertain duration and the defendants could not put off the opening night until she recovered. The obligation to perform from the first night was a condition of the contract. Failure to carry out this term entitled the producers to repudiate Poussard's contract.
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Express Terms:
2. Warranties
A warranty is a less important term: it does not go to the root of the contract. A breach of warranty will only give the injured party the right to claim damages; he cannot repudiate the contract.
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Express Terms:
2. Warranties (Contd)
Bettini v Gye (1876)
The facts: Bettini, an opera singer, was engaged by Gye to appear in a season of concerts. He undertook to be in London at least six days before the first concert for the purpose of rehearsals. He arrived three days late because of a temporary illness. He gave no advance notice and Gye refused to accept his services. Decision: It was held that the plaintiff had been engaged to perform for a 15-week season and the failure to attend rehearsals could only affect a small part of this period. The promise to appear for rehearsals was a less important term of the contract. The defendant could claim compensation for a breach of warranty but he could not repudiate Bettini's contract.
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Implied Terms
Implied terms are those terms which, although not expressly stated by the parties by words or conduct, are by law deemed to be part of the contract. Implied terms is one that is actually stipulated by one of the parties, requiring the other party to do certain things.
Terms may be implied into contracts by: 1. Terms implied by Custom 2. Terms implied by the Courts 3. Terms implied by the Statute
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But any express term overrides a term which might be implied by custom.
Case example: Les Affreteurs v Walford 1919
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10,000.
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