Business Law Semester 2: Terms of a Contract

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Questions and Answers

What are the two requirements needed for terms in an unsigned document to form part of a contract?

Signature requirement and actual knowledge

Written agreement and verbal acknowledgment

Knowledge/notice requirement and timing requirement (correct)

Clarity of terms and duration of notice

Which of the following best describes the knowledge/notice requirement?

The terms must be published in a public domain.

The contract must be signed by both parties.

The terms must be included in the body of the contract.

The party must have actual knowledge of the terms or be given reasonable notice. (correct)

When must the knowledge/notice requirement be satisfied in relation to a contract?

After the contract has been formed.

Only during dispute resolution.

At any point during contract execution.

Before the contract is formed. (correct)

In the case of Sydney Corporation v West, what was the main reason for the court's decision?

W was given a ticket with terms before entering the car park. Signup and view all the answers

What did the ticket in Sydney Corporation v West contain that affected W's liability claim?

A statement denying responsibility for vehicle damages. Signup and view all the answers

What does the term 'objective approach' imply in the context of contract terms?

The meaning of terms is judged based on reasonable person standards. Signup and view all the answers

What could W have done to reject the terms associated with the ticket?

Leave the car park without parking. Signup and view all the answers

What does the timing requirement refer to in relation to contract terms?

The necessity for terms to be known before contract acceptance. Signup and view all the answers

In the case of Causer v Browne, why was the exclusion clause not considered a term of the contract?

C did not read the docket and had no knowledge of the term. Signup and view all the answers

What constituted a failure in Olley v Marlborough Court Ltd concerning the exclusion notice?

The notice was placed on the wall after the contract was formed. Signup and view all the answers

In the facts of Causer v Browne, what was the main reason that led to the exclusion clause being unenforceable?

A reasonable person would not expect a docket to contain contractual terms. Signup and view all the answers

What does the knowledge/notice requirement entail in the context of contractual terms?

At least one party must have actual knowledge of the terms before the contract is formed. Signup and view all the answers

What was the outcome for Mr and Mrs O in the Olley v Marlborough Court Ltd case?

They successfully sued the hotel for the loss of their coats. Signup and view all the answers

In legal terms, what does 'incorporation by notice' refer to?

The inclusion of terms that a party may not see or read. Signup and view all the answers

What was the critical timing issue in the Olley v Marlborough Court Ltd decision?

The contract had already been formed when the notice was observed. Signup and view all the answers

How does reasonable notice relate to the concept of incorporation by notice?

It suggests that terms should be displayed in a way that a reasonable person can see. Signup and view all the answers

Study Notes

Express Terms: Reasonable Notice

Express terms can be incorporated into contracts through notice, even if not signed.
Examples of unsigned documents include notices, signs, and tickets.
Two requirements for incorporation: knowledge/notice and timing.

Knowledge/Notice Requirement

The party must have actual knowledge of the term or receive reasonable notice prior to contract formation.
Reasonable notice means the enforcing party adequately informed the other party of the terms.

Timing Requirement

Knowledge/notice must be established before the contract is formed.

Case Study: Sydney Corporation v West

A ticket given to a customer included a statement limiting the council's liability for vehicle loss/damage.
W’s vehicle was stolen while parked; he sought damages from SC.
Decision: The ticket's statement was a contractual term.
- Timing: Issuance of the ticket was the offer; parking the car constituted acceptance.
- Knowledge: W received reasonable notice when handed the ticket.

Case Study: Causer v Browne

C brought a dress for dry cleaning and received a 'docket' with an exclusion clause.
C did not read the docket, leading to a stained dress.
Decision: The exclusion clause was not part of the contract.
- Knowledge: C lacked awareness of the terms since they did not read the docket.

Case Study: Olley v Marlborough Court Ltd

Upon checking in, the O's signed the room-hire contract and found a liability notice in their hotel room.
A thief stole items from their unlocked room after the housekeeper left it open.
Decision: The liability notice was not a term of the contract.
- Knowledge: O’s read the notice after checking in, satisfying reasonable notice.
- Timing: The contract formed at check-in did not allow for notice of terms post-formation; both requirements must be met for incorporation.

General Principles

Terms included in contracts must fulfill both knowledge/notice and timing requirements.
Objective standard is applied when determining reasonable notice and knowledge in contractual agreements.

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Description

This quiz covers Topic 5 on the terms of a contract, focusing on the incorporation of express terms and the requirement of reasonable notice. It examines how terms can be included in unsigned documents and the necessity of knowledge and timing in contract formation.