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Terms in this set (17)
What are Express Terms?
Terms the parties have articulated prior to concluding the contract. E.g. they are written in the contract
What is a puff and opinion?
Advertising talk. They exaggerate the qualities of the subject and are not intended to be taken literally.
Expressions of personal belief and are not promissory. This is problematic if it is a professional opinion
What is Mere Representation?
A statement of face which does not amount to a term/condition of the contract, but is one that the maker does not guarantee its truth
How do courts determined whether a statement amounts to a term?
Through the objective test. Courts will assess whether a reasonable person placed in the parties' position would have considered the statement made to be promissory in nature. They must ascertain whether there is objectively an intention to assume contractual liability for the accuracy of the statement
What case states the factors the courts will use to assess if it is a term? What are the 4 factors
Ellul & Ellul v Oakes 1972
1. Words and Language Used
2. Relative Knowledge and Expertise of the person making the statement
3. The importance and timing of the statement
4. Agreements which are reduced to writing
Explain the factor of Words & Language Used? Name & Explain the relevant case.
Statements that begin with "i guarantee...", "I promise..." or similar are inherently promissory. Statements that begin with "I would think that" or similar are arguably not promissory.
JJ Savage & Sons v Blakney 1970
The appellant's statement was found not promissory as the word estimate, which he used, was merely an expression of opinion
Explain the factor of Special Expertise? Name & Explain the relevant case(s).
A statement made by one party with expert knowledge in an area, to another party with no such expertise, is more likely to be promissory. If the roles were reversed, it would be a mere representation.
Oscar Chess v Williams 1957
The statement regarding the car's model year was not a term of the contract, merely a representation as the defendant stated they had no personal knowledge of the car's age.
Dick Bentley Case
The appellant's statement was deemed a warranty (promissory) as he was a car dealer, who was in a position to know about the mileage of the car.
Explain the factor of Timing of the Statement? Name & Explain the relevant case(s).
A statement that is proximate in time to the point of contract formation is more likely to be promissory than one made well beforehand, as well as the significance of the timing relative to the size and nature of the transaction
Van der Esschert v Chappel
A statement regarding white ants that was made immediately prior to signing the contract of a house sale was found promissory in nature as there was no time to check the house.
Explain the factor of Written Statement? Name & Explain the relevant case(s).
Negotiations that are written and signed are likely to be assumed to be a mutually agreed obligation
Equuscorp v Glengallan
The respondent alleged that the terms discussed in an oral conversation were binding, despite the parties executing a loan agreement. The discussed terms were inconsistent with the written statement- the court ruled the written statement prevailed.
What is the Parol Evidence Rule? (PER)
Where the contract is entirely in writing, it is presumed that the writing contains all the terms of it, and evidence of any previous agreements which would add to or vary the contract is not permitted.
It has two limbs:
1. The prevention of extrinsic evidence that varies, adds to or contradicts the terms written
2. Limits evidence that might be given to explain the meaning of a term.
What is the First Limb of the PER?
The ability for this rule to apply only when the contract is written. Mastertons Homes v Palm sets out the principles to determine if a contract is wholly in writing.
What is the Second Limb of the PER?
Limits evidence being given by parties to explain the meaning of the terms of a written contract.
Evidence of surrounding circumstances to the written contract is admissible to assist in interpretation of the contract is language is either ambiguous or susceptible of more than one meaning- See the Codelfa Case
What are the 3 Exceptions to the PER?
1. To prove the contract is only partially written
2. To prove that the representation gave rise to a collateral contract
3. Prove an estoppel
What are the ways terms can be incorporated?
1. By Signature
2. By Notice
3. By Course of Dealings
Explain Incorporation by Signature. State the leading case(s).
When a document containing terms is signed in absence of fraud or misrepresentation, the party signing it is bound regardless of whether the contract was read or not. By signing, they are agreeing to the terms contained in it.
L'Estrange v Graucob
The order form was signed by the plaintiff without misrepresentation. The exclusion clause was effective
Toll v Alphapharm
The signature on the contract was binding and they were bound by the terms
Explain Incorporation by Notice. What are the 3 parts? State the leading case(s).
In the absence of a signature, the incorporation of written terms into an otherwise oral contract depends on whether the notice was given prior to the formation and whether reasonable steps were taken.
1. Timing of Notice: must be given prior to or at time of entry.
2. Knowledge of Terms: delivered or displayed terms can only be incorporated if the recipient party has knowledge or reasonable notice of the terms
3. Reasonable Notice: Offeror must provide reasonable notice of the terms to the Offeree. What amounts to reasonable notice is circumstantial
Thornton v Shoe Lane Parking
The garage had the fine print inside and he could have only seen them after he had purchased the ticket. Therefore as he did not know beforehand, he it did not satisfy the above requirements. Shouldve been displayed next to the ticket machine
Also see Oceanic Sealine and Baltic Shipping
Explain Incorporation by Course of Dealings. State the leading case(s).
The ordinary requirements are not required when the parties have had a history of dealings between them and seeking to incorporate contractual terms which were employed in earlier contracts between them. The justification for that is that the party to be bound has, by continuing to deal with the party seeking to impose contractual terms, demonstrates a willingness to be bound by the terms.
Balmain New Ferry v Robertson
The Appellant had previous dealings with the Respondent which made clear his knowledge and acceptance of the terms being incorporated to pay an extra fee for the wharf.
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