Term
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Definition
- Puff: a boastful statement made in advertising
- Representation: a statement made to induce a party into the contract, but one that doesn't form part of the contract. Actionable in misrepresentation if breached.
- Term: a statement that is part of the contract. If breached, an action will lie in breach of contract. |
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Term
| Distinguishing from representations |
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Definition
Courts will look at:
- Importance of the statement
- Timing of the statement
- Whether the contract has been reduced to writing
- Whether the maker of the statement had special knowledge or skill |
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Term
| Distinguishing (Importance of the statement) |
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Definition
Bannerman v White
The greater the importance attached to the statement by one party, the more likely it is to be held a term |
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Term
| Distinguishing (Timing of the statement) |
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Definition
Routledge v McKay
A statement made closer to agreement is more likely to be a term. |
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Term
| Distinguishing (contract reduced to writing) |
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Definition
J Evans and Son (Portsmouth) Ltd v Andrea Mezario Ltd
If a contract is reduced to writing, then any statements contained within are generally held to be reps. (Unless the parties intended on a part- oral, part- written contract.) |
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Term
| Distinguishing (Special knowledge) |
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Definition
Dick Bentley Productions Ltd v Harold Smith Motors Ltd
Where a party making a statement is making it on the basis of a special knowledge or skill and this is relied on, then the statement is likely to be a term.
Oscar Chess Ltd v Williams:
If a statement is made in innocent ignorance, it is more likely to be a rep. |
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Term
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Definition
Terms may be expressly incorporated into a contract by:
- Signature
- Notice
- Previous Dealing |
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Term
| Express Terms: Incorporation (Signature) |
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Definition
L'Estrange v Graucob
If a written contract is signed, then the party signing it is held to have read and agreed to everything it contains. |
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Term
| Express Terms: Incorporation (Notice) |
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Definition
Olley v Marlborough Court Hotel
For a term to be incorporated by notice, the notice must be given at or before the formation.
Parker v South Eastern Railway Company
The party attempting to incorporate the term by notice must take reasonable steps to draw it to the attention of the other |
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Term
| Implied terms: Ways in which terms may be implied |
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Definition
Terms may be implied into a contract by three ways:
- By the courts
- By statute
- By custom |
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Term
| Implied terms: By the courts (Previous Course of Dealing) |
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Definition
Hills v Arcos:
The court may imply terms from previous contracts of a similar nature between the parties in order to fill any gaps. |
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Term
| Implied terms: by the courts (Custom or trade usage) |
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Definition
British Crane Hire Corp v Ipswich Plant Hire
Where both parties are aware that contracts in their trade are subject to commonly used terms, the court may imply those terms. |
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Term
| Implied terms: by the courts (Business efficacy) |
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Definition
A term may be implied by the court if it is so obvious that it goes without saying and necessary for business efficacy.
- The Officious bystander test (Shirlaw v Southern Foundries)
e.g. The Moorcock |
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Term
| Implied terms: by statute |
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Definition
Terms most commonly implied by two acts:
- SGA 1976
- Supply of Goods and Services Act 1982 |
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Term
| Implied terms: by statute (Title) |
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Definition
s12 SGA
Implied condition on the part of the seller that he has a right to sell the goods.
Rowlands v Divall |
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Term
| Implied terms: by statute (description) |
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Definition
s13 SGA
When sold by description, goods must correspond to that description. Only applies if the description is relied upon.
Harlingdon v C Hull Fine Art Co. |
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Term
| Implied terms: by statute (satisfactory quality) |
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Definition
s14(2) SGA
Implied term that goods sold will be of satisfactory quality.
- This does not apply if any defects are drawn to the buyer's attention. |
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Term
| Implied terms: by statute (fitness for purpose) |
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Definition
s14(3) SGA
Goods sold must be fit for the purpose made known to the seller (expressly or impliedly)
This does not apply where the salesperson could not be reasonably expected to know what purpose the buyer had in mind. (Jewson v Kelly) |
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Term
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Definition
There are three categories of terms:
- Conditions
- Warranties
- Inominate Terms |
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Term
| Classification of terms: conditions |
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Definition
| A condition is a term that goes right to the heart of the contract. If breached, it allows the injured party to sue for repudiation and damages. |
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Term
| Classification of terms: warranties |
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Definition
Bettini v Gye
A warranty is an ancillary term of the contract that, if breached, allows the injured party to sue for damages only. |
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Term
| Classification of terms: inominate terms |
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Definition
Hong Kong Fir Shipping Co Ltd v Kawasaki:
An intermediate term for which the effects of a breach must be seen to determine if it is treated as a condition or a warranty. |
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