TERMS AND EXCLUSION CLAUSES 1. 2. 3. 4. 5.

Representations and terms Express terms Conditions and warranties Implied terms Exclusion clauses

1.Representation and terms

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NEGOTIATION
STATEMENTS

TERMS

REPRESENTATIONS

CONTRACT

Representation
- A statement of fact made by one party; - Inducing the other to enter into the contract; - Does not become a term of the contract; - If a representation turns out to be untrue (misrepresentation) -> remedies but no contractual liabilities;

2. Express terms
Expressly agreed by the parties to a contract to be a term. See Scammell v Ouston 1941 (p109);

3. Conditions and warranties

- Condition: a term which is vital to the contract, going to the root of the contract; - Breach of a condition: the aggrieved party may treat the contract as discharged (end/repudiate) + claim damages. See Poussard v Spiers 1876 (p111); - Warranty: a less important term -> does not go to the root of the contract, but is subsidiary to the main purpose of the agreement; - Breach of a warranty: claim damages only. See Bettini v Gye 1876 (p112).

Note
- The intention of the parties at the time the contract was made as to whether a broken term was to be a condition or a warranty; - Innominate terms?

4. Implied terms
- Not expressly mentioned by the parties; - Deemed to form part of a contract; - Be implied by (1) custom; (2) the courts; (3) statutes;

Terms implied by custom (customary terms)

- Included in contracts in a particular trade or locality. See Hutton v Warren 1836 (p114); - Be overrided by express term. See Les Affreteurs v Walford 1919.

Terms implied by statute

The Sale of Goods Act 1979
S12: the person selling the goods has to have the legal right to sell them; S14: the goods must be of satisfactory quality meet the standard that a reasonable person would regard as satisfactory. Also, if the buyer says theyre buying the goods for a particular purpose, theres an implied term that the goods are fit for that purpose;

S15: selling the goods by sample has to be of the same quality as the sample.

Terms implied by the courts

- The parties intended to apply terms to the contract. See The Moorcock 1889 (p115); - To be a necessary incident of certain type of contract. See Livepool City Council v Irwin 1977.

5. Exclusion clauses
- A clause in a contract which release or limit one of the parties from liability if something goes wrong with the contract. - Requirements of an exclusion clause
Properly incorporated into a contract before it has any legal effect; Interpreted strictly

- Exclusion clauses in standard form contracts: case law and statutory rules regulate the effect of exclusion clauses.

Standard form contract

The Unfair Contract Terms Act 1977 Freedom to contract Protect the public from unfair exclusion clauses Scope
Agreements by commercial concerns or businesses Not apply to contracts of insurance or relating to the transfer of an interest in land Clauses that attempt to limit liability for negligence Clauses that attempt to limit liability for breach of contract

5.1 Incorporation of exclusion clauses 1) Contractual documents 2) Signed contracts 3) Unsigned contracts and notices 4) Onerous terms

Contractual documents
- An exclusion clause contained in an unsigned document: an integral part of the contract + be expected to contain terms; -> printed documents or signs posted stating exclusion terms -> can be included in the contract if they are brought to your attention before the contract is made. - Chapelton v Barry UDC 1940 (p120); - Thompson v LMS Railway 1930 (p120).

2) Signed contracts
- If there is a signed contract containing the clause -> have the effect of including it; - No attention called; No information given; - Sign but not read the document? - Misleading explanation? -> no effect; - LEstrange v Graucob 1934; Any express or implied, condition, statement of warranty, statutory or otherwise is expressly excluded - Curtis v Chemical Cleaning Co 1951 (p121).

Unsigned contracts and notices

- Be aware of the contracts term before or at the time of entering into the agreement. See Olley v Marlborough Court 1949 (p121 122); - Complicated situation with regard to what point in time the contract is formed. See Thornton v Shoe Lane Parking Ltd 1971 (p122); - Exception: consistent dealings in the past -> similar terms. See J Spurling Ltd v Bradshaw 1956; - Previous dealings -> be sufficiently aware of term at the time of making the latest contract. See Hollier v Rambler Motors 1972.

Onerous terms
- Should be highlighted, otherwise they are considered not incorporated into the contract; - Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd 1988 (p123).

5.2 Interpretation of exclusion clauses

- Contra proferentem rule -> against the party at fault who relies on the exclusion; - Liability can only be excluded or restricted by clear words; - The main purpose rule.