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Questions and Answers
What is the first requirement to establish a breach of contract?
The term that has potentially been breached must be incorporated in the contract.
What can Party X argue regarding a signature in a contract?
That the signature is conclusive of acceptance.
A signature will always be binding regardless of circumstances.
False
How is electronic acceptance treated in contracts?
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Reasonable notice must be given before a contract is made.
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What must the recipient reasonably expect regarding a document containing terms?
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What elements are required for prior course of dealing?
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Which case illustrates that car sellers may not provide warranty due to their expertise level?
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If the contract is wholly or partly in writing, then the ______ could apply.
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What does an 'Entire Agreement' clause in a contract signify?
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The Parol Evidence Rule bars evidence of any additional terms completely.
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Study Notes
Incorporation of Contractual Terms
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Express Written Terms
- Signature: A signature on a contract generally indicates acceptance of all written terms (L’Estrange v Graucob; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd), unless there is misrepresentation of the written terms (Curtis v Chemical Cleaning & Dyeing Co Ltd).
- Electronic Acceptance: Electronic acceptance is considered equivalent to a signature (eBay International AG v Creative S.A.R.L.) and the same principles apply.
- Displayed or Delivered Documents: Documents like tickets, receipts, signs, websites, brochures, or links are considered incorporated if the recipient reasonably expects them to contain contractual terms (Causer v Browne). Further, reasonable notice must be given before the contract is made (Oceanic Sun Line Special Shipping Co Inc v Fay).
- Onerous or Unusual Terms: Require clear and specific notice to be incorporated (Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd).
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Prior Course of Dealing: Involves repeated, regular, and uniform dealings where a document displays those terms.
- This document must be considered contractual, and Party X (the party relying on the prior course of dealing) needs to bring it to Party Y’s attention. (La Rosa v Nitel Aust Pty Ltd).
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Express Oral Terms
- Warranty vs. Representation: Oral statements can be either a warranty (legally binding promise), or a mere representation (statement of fact or opinion that is not a promise).
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Determining Warranty: Oral statements can be considered warranties if:
- The party making the statement is more knowledgeable on the subject matter (Dick Bentley Productions Ltd. v Harold Smith (Motors) Ltd.).
- The statement is made on an important matter or just before contract conclusion (Van den Esschert v Chappell).
- The language used is promissory or informal (Lunar Park Ltd v Edwards).
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Incorporating Oral Terms into a Written Contract
- Parol Evidence Rule (PER): A presumption arises that a written agreement is complete and extrinsic evidence is inadmissible to vary, add to, or contradict the document (State Rail Authority of New South Wales v Heath Outdoor Pty Ltd; Nicolazzo v Harb). This presumption can be rebutted by strong evidence.
- Entire Agreement Clause: A clause stating that the written agreement is the sole agreement. This strengthens the PER presumption but does not bar evidence of an additional term (Hart v McMurtry).
- Collateral Contract: A separate contract created to circumvent the PER, where a promise is given in exchange for entering into the main contract (Heilbut, Symons & Co v Buckleton).
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Description
Test your knowledge on the incorporation of contractual terms with this quiz. Explore concepts such as express written terms, electronic acceptance, and the necessity of reasonable notice for contractual incorporation. Understand the implications of onerous or unusual terms in contract law through key case references.
