Terms

Terms

1. What is a term?

   • not mere puff
     • (advertising boasts)
   • not representations
     • but may still be possible to sue for misrep.

2. express terms

   • statements of fact with intention
     • intention tested as reasonable man
   • factors to consider when deciding term v representation
     • importance placed upon it by other party
       • Bannerman v White
         • sulphur hops
     • timing
       • Routledge v McKay
         • statement about age of motorbike made 2 days before sale was rep.
     • reduction into writing
       • Inntrepreneur Pub Co v East Crown
         • beer tie was not term as was only aspect of negotiations not written into contract
     • specialist knowledge
       • w/ specialist knowledge can verify misrep better than layman
         • Oscar Chess v Williams
           • buyer was specialist so reps from seller were not terms
           • Dick Bentley v Harold Smith
             • seller was specialist so reps = terms
     • assumption of responsibility
       • Verification of a claim can make it rep or term
         • Schawel v Reade
           • S stopped B checking horse for soundness
         • Hopkins v Tanqueray
           • auction: claiming horse sound before auction was rep.
     • parol evidence rule
       • extrinsic evidence may not be adduced to vary an express written contract
         • Jacobs v Batavia
         • rule can be avoided via
           • contracts not wholly written
             • J Evans & Sons v Andrea Merzario
               • shipping machinery not in hold
           • collateral contracts
             • City of Westminster v Mudd
               • changed lease to non-residential
           • 'onerous' terms
             • Interfoto v Stilletto
             • onerous = involving heavy obligations
     • Denning: big red hand rule
       • key terms should be expressly pointed out
     • entire agreement clause
   • both parties have expressly agreed to

3. implied terms

   • in fact
     • regular and consistent course of dealing
       • British Crane Hire v Ipswich Plant
         • trade custom to insure cranes so term was implied
       • McCutcheon v MacBrayne
         • normal course of dealing must be regular and consistent
           • forgot to sign car ferrying risk note - not implied as often failed to get it signed
       • Hollier v Ramblers Motors
         • 3 or 4 times in 5 years was not regular enough
   • officious bystander test
     • The Moorcock
       • business efficacy
       • 'so obvious' that port should've been deep enough for ship
     • 'oh of course it is'
       • Shirlaw v Southern Foundries
   • in law
     • Liverpool City Council v Irwin
     • Statute
       • operate irrespective of intention of parties
         • unless valid exemption clause
   • necessary
     • only implied where necessary
       • Marks & Spencer PLC v BNP Paribas
         • term not implied merely because seems fair or parties would've agreed if suggested
     • cannot be used to fill gaps in incomplete contract
       • Wells v Devani
     • must not contradict any express terms
       • Irish Bank v Camden Market Holdings
   • SGA 1979
     • s12
       • traders holds title to goods and is able to sell them
     • s13
       • goods will correspond with description
         • Beale v Taylor
           • s13 still appliy where goods been inspected by c prior to purchase
     • s14(2)
       • goods are of satisfactory quality incl. gen. fit for purpose
         • Priest v Last
           • seller was in breach re fitness to purpose
     • s14(3)
       • goods are reasonably fit for purpose
         • B expressly or impliedly makes known to S
           • S must be in course of business for this to apply
         • Balmoral Group v Borealis
           • goods were generally satisfcatory (s14(2) but not fit for purpose intended
     • s15
       • goods will match any sample provided, be free of defects not apparent on reasonable examination of sample
   • CRA 2015
     • s17(1)
     • s11
     • s13(2)
     • s14(2)
       • goods will match any model seen by consumer unless trader states otherwise
     • s9
     • s10
     • s15
       • if contract covers installation, goods will not confom to contract if installed incorrectly
     • s16
       • if incl. phys & dig goods, phys goods will not conform if dig. goods do not
     • s49(1)
       • supplier carry out service with reasonable care & skill
     • s52
       • in absence of express term, service carried out within reasonable time
     • s51
       • pay a reasonable price (where consideration not determined by contract)
     • s50
       • where trader has given info about service to consumer, info is taken to be included as term of contract to excent that consumer has taken info into account
   • SGSA 1982
     • s13
       • always treat as inominate term
     • s14
     • s15

4. type of term

   • condition
     • goes to the root of the contract
       • Poussard v Spiers
     • breach
       • right of election
         • affirm?
         • terminate?
       • claim damages
     • s12 - 15 SGA 1979
     • ss17 & 49-52 CRA 2015
   • warranty
     • less important
     • breach
       • claim damages only
     • does not go to root of contract
       • Bettini v Gye
   • innominate
     • neither conditions nor warranties
     • court considers consequences of breach to decide seriousness and which remedy
     • 'does the breach deprive the innocent party of substantially the whole benefit of the contract?'
       • Hong Kong Fir v Kawasaki
       • Yes?
         • treat as condition
       • No?
         • treat as warranty

5. Breach

   • for consumers only
     • CRA 2015
       • s20: 'a short term right to reject' goods
         • s22: return for full refund in 30 days
       • s23: a longer term right to have goods repaired or replaced
       • ss 20 & 24: a right to price reduction or reject goods if repair / replacement fails after the first attempt
       • for services
         • s55 can require trader to repeat performance
         • s56: if impossible or not done in reasonable time, right to price reduction

6. exemption clauses

   • is exemption clause valid?
     • incorporation
       • term must become part of contract by:
         • signature
           • binding regardless whether c has read contract
             • exceptions
               • a misrepresentation
                 • Curtis v Chemical Cleaning
               • document has no contractual effect
                 • Grogan v Robin Meredith Plant Hire
               • non est factum (the deed is not mine ie fraud)
                 • Saunders v Anglia Building Society
             • L'Estrange v Graucob
         • reasonable notice
           • onerous clauses
             • require greater notice as per big red hand rule
               • Interfoto v Stiletto
           • proferens must take reasonable steps to bring term to other party's notice
             • Parker v South Eastern Railways
               • terms on back of ticket was sufficient
           • incorporation by reference to another document is possible
             • Thompson v London, Midland & Scottish Railway
           • notice must be given before or at time of contracting
             • Olley v Marlborough Court Hotel
               • contract formed at desk so exemptions displayed in hotel rooms too late to incorporate
             • Thornton v Shoe Lane Parking
               • ticket machine gave terms afterwards so could not be protested - not incorporated
           • any written document / notice containing the clause must be one which has contractual effect
             • Chapelton v Barry UDC
         • consistent and regular course of dealing
           • McCutcheon v MacBrayne
             • did not always sign liability waiver so not consistent course of dealing
           • Hollier v Rambler Motors
             • 3 or 4 times in 5 years not enough to be regular course of dealing
           • Petrotrade Inc v Texaco
             • 5 times in 13 months was enough
           • Harry Kendall & Sons v William Lilico & Sons
             • 3 or 4 times a month for 3 years was enough
     • construction
       • rules of interpretation
         • words should be given natural meaning to matter how unreasonable or expensive the result
           • Arnold v Britton
           • if this results in genuine ambiguity then should be interpreted to reflect business common sense
             • Ace Paper v Fry
             • court will consider contract as a whole incl quality of drafting
               • Wood v Capita
         • can liability for negligence (or breach of contractual duty to exercise reasonable care & skill) be excluded?
           • eg s 13 SGSA 1982
         • contra proferentum
           • any ambiguity in clause will be construed against proferens
             • Houghton v Trafalgar Insurance Co.
             • Persimmon Homes v Ove Arup & Partners
               • contra proferentum has limited role when both parties have equal barganining power
         • Canada Steamship
           • does clause specifically refer to negligence or synonym of negligence?
             • no?
               • are the words used wide enough to cover negligence?
                 • Monarch Airline v London Luton Airport
                   • 'any act or omission, neglect or default'
             • yes?
               • is the clause too wide?
                 • eg could it based upon some ground other than neg?
                   • Yes?
                     • negligence cannot be relied on
                       • White v Warwick
                 • no?
                   • where clause only excludes negligence, it will exclude negligence
       • limitation clauses
         • limit rather exclude liability, are read less restrictively and more likely to succeed to limit liability
           • Alisa Craig v Malvern Shipping
       • L Bridge: 'on its natural and ordinary meaning does the clause cover the breach, whether fundamental or otherwise?'
         • George Mitchell v Finney Lock Seeds
     • unfair terms
       • B2B
         • UCTA 1977
           • s2(1)
             • cannot exclude liability in neg. resulting in death or PI
           • 2(2)
             • can only exclude liability for other loss / damage from neg. if passes reasonabless test (s11 & sch2)
           • s3
             • standard written terms
               • can only exclude/restrict liability for gen. term if passes reasonableness test
           • s11(1)
             • reasonableness test
               • sch2
           • only applies B2B
             • s1(3) defines business liability
           • only applies to excemption clauses
             • defined in s13
           • s6(1)(a) - s12 SGA1979 can never be excluded / restricted
       • B2C
         • limitations that are never effective
           • liability for death or PI from negligence
             • exceptions in s66 CRA 2015 (eg insurance and land contracts)
           • clauses that exclude terms implied by statute
             • services s57(1) - (3)
             • goods ss31(1) & 47(1)
         • limitations that might be effective
           • the fairness test
             • a term is unfair is contrary to good faith and causes a significant imbalance in parties' rights to detriment of the consumer
               • s62
           • CRA 2015 explanatory notes
           • transparent
           • prominent
         • CRA 2015
           • trader s2(2) s2(7)
           • consumer s2(3)
       • term must not be prohibited by any legislation on unfair contractual terms
   • a valid exemption clause must be incorporated, constructed to exclude liability for specific breach, and not be unfair