Business Law Contract Terms Overview

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Questions and Answers

What describes the entire contents of a legally enforceable agreement?

Route of performance

Negotiated statements

Terms of a contract (correct)

Obligations of the parties

Which of the following is NOT a way that terms can become part of a contract?

By unilateral decision (correct)

By operation of law

By negotiation

By agreement

Which type of term is typically agreed upon during negotiations?

Indeterminate term

Implied term

Express term (correct)

Nested term

What is one of the limits to the freedom of contract?

Illegal undertakings are unenforceable Signup and view all the answers

Which of the following statements about contractual terms is true?

Express terms can be included through reasonable notice. Signup and view all the answers

Terms of a contract are important because they provide:

A standard for measuring performance Signup and view all the answers

What type of terms become part of a contract because they are established by common law or legislation?

Implied terms Signup and view all the answers

What is referred to as an undertaking or promise in a contract?

A term Signup and view all the answers

What is meant by 'expressly agreed' terms in a contract?

Terms that are specifically stated, either in writing or orally. Signup and view all the answers

How can a person be bound by a document they signed without reading it?

The signature indicates consent to the terms, regardless of prior knowledge. Signup and view all the answers

In the case of L'Estrange v F Graucob, what did L sign that impacted her claim?

A document that excluded any implied warranties. Signup and view all the answers

What rationale did the court use to decide L was bound by the signed document?

The document was presented as a sales agreement, which a reasonable person would understand. Signup and view all the answers

What type of document is likely to contain expressly agreed terms?

A signed sales agreement. Signup and view all the answers

What does the clause in the L'Estrange v F Graucob case indicate about other conditions?

It excludes any express or implied terms not stated in the document. Signup and view all the answers

What is a key factor that makes a signature binding in a contract?

The reasonableness of the signer's understanding of the document. Signup and view all the answers

Which legal principle is illustrated by L'Estrange v F Graucob?

The enforceability of signed documents containing exclusions. Signup and view all the answers

Study Notes

Terms of a Contract Overview

A term is defined as a specific, agreed promise or undertaking within a contract.
The terms of a contract outline the comprehensive content of a legally enforceable agreement, detailing rights and obligations of involved parties.
Contract terms serve as a benchmark for assessing performance.

Identifying Contractual Terms

Contractual terms can be categorized into express and implied terms.
Express terms are established through:
- Signed documents that have mutual consent.
- Reasonable notice provided to parties before contract formation.
- Statements made during negotiations that form part of the agreement.
Implied terms may include:
- Universal terms applicable to all similar contracts.
- Generic terms commonly understood in the industry.
- 'Ad hoc' terms specific to individual contracts.

Freedom of Contract

Contract law generally endorses the principle of freedom of contract, permitting parties to negotiate and establish their own terms.
The consideration rule exemplifies this principle, highlighting the requirement for something of value to be exchanged.
Contractual agreements may have limitations; for instance, agreements involving illegal activities are not enforceable under the law.

Terms of a Contract: Express Terms and Signed Documents

Terms are 'expressly agreed' when stated clearly, either in writing or verbally.
Various methods can explicitly incorporate terms into a contract:
- Inclusion in a signed document.
- Reference on tickets, notices, or unsigned documents.
- Promises made during negotiations.

Binding Nature of Signed Documents

Signing a document generally indicates consent to the terms within.
A person who signs a contract is considered bound by its terms, assuming no fraud or misrepresentation occurred.
Lack of reading or understanding the document does not exempt a signer from being bound by its terms.

Case Study: L’Estrange v F Graucob

Fact: L purchased a cigarette machine from F and signed a 'Sales Agreement' that excluded implied warranties.
Upon delivery, the machine malfunctioned, leading L to seek damages based on an implied warranty.
F contended that the signed agreement prevented L from claiming this warranty.

Legal Findings from L’Estrange v F Graucob

Issue: Was L legally bound by the clause negating implied warranties?
Decision: L was bound by the terms of the document she signed.
Reasoning:
- L had signed a form explicitly headed 'Sales Agreement.'
- A reasonable person would have perceived the document as containing contractual obligations.
- No fraud or misrepresentation was established by F during the signing process.

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Description

This quiz covers the key concepts related to the terms of a contract, focusing on the principles of contract law as outlined in the business studies syllabus. It serves as an overview for important topics that will be assessed in Test Two and the Final Exam. Prepare to deepen your understanding of contractual terms and their significance in legal agreements.