5.2 express terms (signed document) (slide) S02Y24.pptx

Principles of TOPIC 5: TERMS OF A CONTRACT Business Law EXPRESS TERMS: SIGNED DOCUMENTS Semester 2 2024 How do terms become part of a contract? Expressly agreed terms  Terms are ‘expressly agreed’ when they have been d...

Principles of TOPIC 5: TERMS OF A CONTRACT Business Law EXPRESS TERMS: SIGNED DOCUMENTS Semester 2 2024 How do terms become part of a contract? Expressly agreed terms  Terms are ‘expressly agreed’ when they have been declared or expressly stated, either in writing or orally.  Terms may be expressly agreed to in various ways:  included in a signed document; or  referred to on a ticket, notice or other unsigned document  promises made during negotiations Expressly agreed terms: Signed documents  Contracting parties often signal their consent to contractual terms by signing a document.  A person who:  signs a document  that a reasonable person would understand to contain contractual terms is,  in the absence of fraud or misrepresentation, bound by the terms set out in that document, even if he or she has not read the document and has no knowledge or understanding of its contents. Incorporation by signature: L’Estrange v F Graucob FPBCL p 367-7 Facts  L purchased a cigarette machine from F.  L signed a form headed ‘Sales Agreement’.  The form included the terms of sale, including the following clause: The agreement contains all the terms and conditions under which I agree to purchase the machine specified above and any express or implied condition, statement or warranty, statutory or otherwise not stated herein is hereby excluded  When the machine was delivered it did not work properly.  L brought an action for damages of an implied warranty that the machine was reasonably fit for the purpose.  F argued that, pursuant to the clause outlined above, F could not rely on the implied warranty in question. Incorporation by signature: L’Estrange v F Graucob (ctd) Issue  Was L bound by the term that excluded implied warranties? Decision  L was bound by the terms of the document she signed, including the term that excluded implied warranties. Reason  L signed the document.  A reasonable person would have understood the document contained contractual terms (the form was headed ‘Sales Agreement’).  F made no statement that amounted to fraud or a misrepresentation.