Content of Contract y Terms and the details that the contracting parties have agreed will be legally binding

between them.

Terms y Terms can be written into a contract, can be oral, express or even implied by custom, business, previous dealings or statute. In another words, any promise that was intended to be legally enforceable. Terms= Agreement; Representation= Communication before or at the time of agreement Terms are classified as conditions and warranties on the basis of their essentiality (Associated Newspapers Ltd v Bancks) - Conditions (critical term): if breached, the innocent party may choose to continue with the contract and claim damages or terminate the contract (Poussard v Spiers and Pond). - Warranties (minor term): a breach can be compensated for by damages and this is the only remedies (Bettini v Gye). - Intermediate (innominate) term: terms that are capable of both substantial and minor breach. A major breach of the term will entitle the innocent party to terminate the contract and/ or seek for damage; a minor breach will only permit an action for damages (Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd). *a condition precedent will prevent the agreement coming into existence and having legal effect until the fulfillment of a condition. (Whittle v Parnell Mogas Pty Ltd) (Sandra Investment Pty Ltd v Booth) *a condition subsequent refers to an event that, if or when it occurs, will terminate the contract. Representation y Statement s made by the contracting parties about the subject matter of the contract, but are not terms of the contract and therefore not legally enforceable. *Depending on the circumstances of a particular problem, the party who thought the misrepresentation was a term may have legal action in other areas of contract law such as fraudulent misrepresentation and s.52 TPA

y y

Statements Made During Negotiations May be: y y A representation A Misrepresentation

no term (Ecay v Godfey) Exceptions (the parol evidence rule applies unless it can be shown that the document was not intended as the complete record of their bargain: Hoyt s Pty Ltd v Spencer) Partly written/ oral contract (Van den Esschert v Chappell) Contracts necessarily subject to some trade custom (Hutton v Warren) Where a mistake has occurred in reducing the contract to writing (Pym v Campbell). a collateral contract will exist and enforce the promise but as the substance of a quite separate collateral contract rather than part of the main contract.y y y Puff Collateral contract A Term *contractual intention as test to determine whether a statement during negotiation is or has become a term of conrtract. it is presumed that the writing contains all the terms of it.yes) (Oscar Chess Ltd v Willaims. and evidence will not be admitted of any previous or cotemporaneous oral agreement which would have the effect of adding to or varying it in any way (Merchantile Bank of Sydney v Taylor) Subrule. or Where parol evidence is required to resolve any ambiguity/uncertainty (Akot Pty Ltd v Rathmines Investments Pty Ltd) Collateral Contract y A promise which is related to the main Terms and Written (Signed) Contracts Parol Evidence Rule only the signed terms become the terms of the contract. (Dick Bently Productions Ltd v Harold Smith Ltd. (De Lassalle v Guildford) y Two requirements: y y y y y .the statement will be treated as a term if the representee makes it known that a particular fact is of great importance and if the representor then asserts that the fact is true (Bannermna v White) *if the person making statement indicates that he or she doesn t warrant the accuracy of statement/ says that the representee should have the statement check independently. If the requirement meets. It focus on: y y y The importance of the statements in issue to the parties The time period between the statements and the contract being formed (Routledge v McKay) The specialist knowledge of either of the parties about the subject matter of the contract. y Where a contract is reduced into writing or where the contract appears in writing to be entire.

(The Moorcock. *A collateral warranty can be established only if the statement so relied on was promissory and not merely representational. BP Refinery Pty Ltd v Hastings Shire Council) Custom or Business usage (Con-stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance Ltd) Implied from a previous dealing Implied Statutory terms by law (Trade Practices Act 1974 (Cth)) . (J J Savage & Sons Pty Ltd v Blakney) *3 party collateral contract and must be supported by consideration (Shanklin Pier Ltd v Detel Prodcuts Ltd) Implied Term y y y y Implied by the court through officious bystander test. -The representee must have entered into the main contract on the basis of the statement and in reliance on it.-The representor must have intended the promise to be legally binding.