Contract Law: Terms and Representations

Introduction to Contract Terms

• Contract terms detail what parties have agreed to
• Express terms are specifically agreed upon by parties
• Implied terms are implied by law (courts or Parliament)

Hutton v Warren

• A farmer claimed compensation for work done on fields when the tenancy was terminated before harvest
• The court implied a term for compensation due to common practice in farming tenancies

Classifying Terms

• Terms are classified by importance: conditions, warranties, or innominate terms
• Mere representations don't carry liability but induce contract entry

Terms vs Representation

• A breach of contract claim arises if a term isn't observed
• Misrepresentation occurs if a false representation induces contract entry

Determining a Term

• Courts consider statement importance, maker's expertise, time lapse, and written contract

Key Definitions

• Puff: A boastful advertising statement
• Representation: A statement inducing contract entry, yet not part of it
• Term: A promise/undertaking incorporated into the contract

Legal Consequences

• Legal consequences for false pre-contractual statements depend on classification

Pre-Contractual Statements

• Puffs: False, but no liability, as they aren't taken seriously
• Representations: False, liability as misrepresentation; proof of fault needed to pursue
• Terms: False, liability as breach of contract; an automatic right to sue occurs

Incorporating Terms

• A statement becomes a term if incorporated into the contract
• Written contracts usually treat statements as terms
• Pre-contract statements are often representations unless included in writing

Oral Statements

• Whether or not a statement is incorporated depends on several factors

Importance of the Statement

• The greater the importance attached to the statement, the more likely it is to be considered a term

Bannerman v White

• If hops were treated with sulphur, purchaser was not interested at any price
• Incorrectly stated hops not treated with sulphur, buyer repudiated contract upon discovery. The seller failed
• The court held the statement was so important to the purchaser that it became a term of the contract

Couchman v Hill

• The auction catalogue stated a heifer was not pregnant
• Confirmed by auctioneer/farmer, but it died during birth. The statement was very important to the purchaser
• The purchaser could sue for breach of contract

Schawel v Reade

• The claimant bought a horse for stud purposes
• The defendant assured the horse was sound and guaranteed to mention if unsound, dissuading vet check
• The horse had an eye disease, making it unfit as stud. The statement was a contractual term
• The defendant had assured him he could rely on his word and the claimant communicated the purpose for which the horse was to be used, putting the defendant in breach

Reliance on Specialist Knowledge & Skill

Bentley Productions v Harold Smith (Motors) Ltd

• The claimants wanted a well vetted Bentley
• The Ds stated a particular car had done 20,000 miles since being fitted with a new engine and gearbox, but it had actually done 100,000 miles
• The mileage statement became a term because the claimant relied on dealer's knowledge
• Oscar Chess Ltd v Williams saw the opposite result, as the purchaser was a car dealer able to check veracity

Timing of the Statement

• Courts view statements as representations if there's a long gap between making it and contract formation

Routledge v McKay

• Motorcycle registration was erroneously documented creating inaccuracy
• There was no mention of the registration number
• The age of the motorcycle was stated incorrectly, but accurate on the documentation a week before written sales
• The buyer's claim failed. Too much time passed to infer the contract was based on the age statement

Written contract

Advice/ability to verify the statement

• Statements made with advice to seek verification suggest it is a representation
• However, statements presented as fact that can't be checked increase likelihood of it as as term

Clarity of the statement

• Vagueness reduces the likelihood of it being categorized as a contractual term and requiring precision

Disclaimers

• A subject to availability, not clause of sale disclaimer on an advert would make clear the claim is separate from the sale itself

Express Terms

• These are terms agreed for contract incorporation, verbally or written, where interpretation problems can occur
• Incorporations decide the current terms, while interpretations concern what these amount to
• Express terms include pricing and supply details, performance methods and obligations, potentially limiting exclusions of liability

Express terms and documentation

• Signature implies agreement regardless of reading, affecting judgement subject to consumer laws

L'Estrange v Graucob

• The machine came with a term that had conditions which included no implied or expressed conditions
• When she realised the machine was unsatisfactory, she protested that the details of the document had not been read by her
• It was said that this did not matter, and the term was binding without misrepresentation

Grogan v Robin Meredith Plant Hire

• The Triact company orally agreed to hire an employee for a set fee
• Time sheet contained indemnity clauses, which meant Triact could be liable to pay for damage caused by a worker
• Court held that the time sheet was not the kind of document that would hold contractual terms

Neocleous v Rees

• A recent court judgement noted the importance of including electronic signatures in email correspondence
• An authentification requires indication of the signature

Curtis v Chemical Cleaning

• The wedding dress with excluded liability for any damage, however caused and it was badly stained
• The assistant misrepresented her, thus negating the term

Chapelton v Barry UDC

• Deck chair could be hired, and respectfully requested for purchase, then a ticket obtained and put in pocket
• The ticket contained a term, excluding the council from injury, and he was injured
• There was not an incorporation, and regarded more as a receipt, and constituted collecting a chair and a ticket
• Implies the offer was accepted, which formed new terms

Thornton v Shoe Lane Parking

• The ticket states the contract of parking was subject to terms and conditions on the inside of the car park. One of the terms excluded liability for personal injuries arising through negligence
• The machine itself constituted the offer
• The acceptance was by putting the money into the machine which made the clause not incorporated

Interfoto v Stiletto Visual

• Transparencies were kept for longer period which meant a holding fee was requested for each transparency
• The term was very onerous meaning the measure to bring it to the measure of others

Blu Sky v Be Caring Ltd (2021)

• Clause in terms and conditions was not included in the main contract, yet Be Caring signed this
• Sky brought claim to find this cancellation fee, however judge agreed with the caring saying had not reasonably been brought
• The contract terms could not then therefore be relied on

Terms- Tickets

Parker v SE Railway

• Paid to deposit in railway cloak room, which gave him the ticket and told him that they were not viable for the item if it was over 10 pounds
• He had lost it, yet there were no obligations to recognise these terms

Thompson y LMS Railway

• The platforms display various terms but are displayed on the platform, so he doesn't see it
• Not incorporated as the duty of being aware
• Railway didn't make her notice of the clause and was therefore unsuccessful in the claim

Implied Terms

• All constracts have express terms but, many are implied, which arises in two main ways
• By court, for obvious reasons, or to give rights

Types of terms

• From common law: through customer or prior dealings by parties
• Through business efficacy and officious bystander

Business Efficacy and Officious Bystander

• The proposed terms will be included to indicate to give to give efficacy and, in other words, make business sense

Lady Hale

• There are other clauses that may need to be implied, such as implied tenant or landlord, and employee and employer
• These terms are not expressed, but that are necessary that can be dismissed

Prior Dealings

• Prior dealing a can be implied into a contract, where there are to same parties for same term, or what their contracts use
• The firm should incorporate in prior dealings, if use is regular, consistant and ongoing, and accepted

Hollier v Rambler Motor

• Only a small amoutn of customer dealings and where was no reference is where this was caused
• Court had been made over the phone

MacBrayn

• Not been asked, however, defendant seeks clause from previous dealings
• No consistancy, therefore clause was not incorporated

British Crane Hire

• Risk was not made and when it became a term of contract, both knew their was trade

Hillas v Arcos

• The term was very general, but had come from other term

Test + bystander

• Obvious to give efficiany and, where a respond is given to someone in the course of the company

Shell v Southern Foundries

• Term will not be that agreed about

Marks & Spencer v BNP Paribas

• Confirmed approach

Barton v Morris 2023

• If not over value did the party have a legitimate way
• The supreme court was able to indicate an express term

Terms Implied by Statute

• Terms implied through the statute are applied in these
• The Consumer Rights Act (2015) provides the legislation that is available to be read and enforced

Consumer Rights Act 2015

• The provisions within are implied that make the distinction between Consumer versus Trader
• This Act does not cover sold on the private area
• There are distinctions with good goods, service, and content supply
• The statute are outlined remedies that are available
• The act outlines some actions against damages, remedies outlined whilst court will balance for both
• An example is outlined

Section 9 Satisfactory Quality

• A purchase of second hand has to meet qualities based on their type
• Also means can say a specific reason why the customer thinks it is good for an item
• Traders must have had reason for a consumer to not wish to use the product as there is an issue of quality that is not met

Bartlett v Sidney Marcus

• There was a claimant who wanted to purchase second hand Jaguar, yet the claimaint wanted the car for lower that would be satisfactory

Section 10 and Section 11

• Goods must be what they were used for and their intended purpose

• If not a good, the customer may have to act is one action is breached

• If not fit for purpose the consumer can state there is no breach for which the item is used

• Goods must match the description and if sample shown, the sample can be seen

ReMoore and Landauer

• There can be sale of peach descriptions
• The total amount stated for purchaser to be rejected

Beale v Taylor

• There may be the sale of car descriptions and breach implied term

Section 20

• It doesn't satisfy refunds, and can return within 30 days
• Outside of the 30 day window retailer is opportunity only
• The retailer may then terminate of purchase and get a refund

Terms: category

• Conditions
• Warrantees
• Innominate terms
• Relates to what action to take

Condition Example

• Breaching condition then entitles the claimant to indicate and/or claim damages

Warrants

• Claimant is able to claim a warrant for breach
• Yet does not have the right to repudiate

Innominate terms

• Consequences of remedy, however, court then decided the remedy

Condition

• Said then to mean contract cannot continue

Spiers v Poussard

• Claim by to terminate as performance, as a successful had been replaced

A warranty

• Doesnt, or if so only some conditions
• Breach means is not contract as a whole

Betrini v Gye and Ronaasen

• Singer did successful , to claim if the contract failed some to be material

Problems?

• Classification the best is whether the parties need to be asked

Arcos, innominate and shipping

• There then is small innovation in there terms or are a guarantee

Is it a Condition

• The HONG KONG FIR SHIPPING CO LTD V KAWASAKI was to the standard
• Though it can be, also, that not enough

Exclusion and limitation causes

• Exclusion clauses means less liability

Limitation example

• A party where has a limit

Exclusion Clauses

• A manager can not do what you are doing

Commonlaw

• Incorporation, construction, legislation
• Is a piece document
• By signature, dealing
• And all conditions apply
• Unless misrepresentation