LLB170 Final: Contract Law B exam notes for a Distinction
1
Law of Contract B
Assuming that the contract has formed..
Identifying the Express Terms
What have the parties promised one another as part of their contract? (In order to know their obligations to perform
so they do not breach the contract)
- Can be found in a written agreement (usually easy to identify terms)
- Ca e foud i a ehage of oespodee attle of the fos oe diffiult to idetif hih ae tes of the otact)
- Can be found in a verbal contract (must be words specifically spoken, not general impression of what was agreed) Watson
➢ Have the express ters ee iorporated ito the parties’ otrat?
One party argues that the terms set out in written form are part of the contract because the other party has
accepted those terms.
❖ By signature
• General rule: A party will be bound by all terms set out in a contractual document if he has
signed it, regardless of whether he has read it or not LEstage or the terms are unusual or
onerous Toll v Alphapharm
• Unless there has been:
o Fraud or misrepresentation LEstage, Cutis
o Duress, mistake, other vitiating circumstance or claim for statutory relief (factors
that undo the consent of the contract, MDC, etc.) LEstage, Toll
o The document signed would not be reasonably be understood to be contractual in
character (merely a receipt, voucher, etc. not a contractual document) Curtis
Toll: Where there is no vitiating element, and no claim for equitable or statutory relief, a person who signs a
document which is known by that person to contain contractual terms, and to affect legal relations, is bound by
those terms, and it is immaterial that the person has not read the document.
❖ By notice (terms displayed or delivered that do not involve a signature) [ Baltic ]
What is the effect of displaying terms on a sign/notice or delivering them on a standard form / ticket
/ invoice/order form or similar?
• When has the contract been formed? Identify where offer and acceptance is
• P accepts terms if the party seeking to impose the terms can show P:
o Knew of the terms? Thornton
OR
o Was aware that there were terms on the document at the time the contract was
formed Thornton
OR
o [Usually] D has done what was reasonable in the circumstances to give notice of the
term to P Thornton
▪ Timing requirement: Notice before contract is formed – a party must have a
reasonable opportunity to reject the terms Olley, Thornton, Oceanic
find more resources at oneclass.com
find more resources at oneclass.com
2
Oceanic: For delivered or displayed terms to be incorporated into a contract, the terms must be made available to
the party to be bound before the contract is made. Only terms that have been made available in a timely manner
can be incorporated into the contract.
▪ Reasonable notice requirement: Notice must be reasonable having regard to
the nature of terms and type of contract
- If terms are onerous, see a ed had – more notice for it to be
considered reasonable
- Only when the ticket is the offer we consider reasonable notice
- Is the document contractual?
- Can the document be reasonably understood as a receipt/voucher?
- Can the party have done anything to draw more attention to it?
Suggest what more could have been done
Oceanic: Where there is an exemption clause intended by the carrier to contain the terms of the carriage, yet the
other party is not aware that an exemption clause is intended in the contract, the carrier cannot rely on that clause
unless he has done all that was reasonably necessary to bring the exemption clause to the passenger's notice.
Baltic: Where the terms sought to be incorporated into a contract are unusual or unexpected in the context of the
transaction, the party seeking to incorporate those terms must make extra efforts in giving notice of those terms.
❖ By Course of dealings
• Although otie of a te a oe too late to e iopoated ito the paties otat o
the first occasion, it may be incorporated by being regularly displayed or delivered over a
'course of dealing' > acceptance of terms
• By continuing to deal with the party seeking to impose the term, the other party may be
taken to have evinced an acceptance of, and willingness to be bound by the term Hardwick
------
1) Did the party know, or ought to have reasonably known from their previous course of
dealings that the other party only contracted on the basis of a particular term? Balmain
o Course of dealings must be regular Henry and uniform McCutcheon
o In order to base infer terms based on a course of dealings, the documents would
have to have been contractual documents, rather than a mere receipt Rinaldi
➢ Can the express terms be found in statements from pre-contractual negotiations/statements?
❖ Is the statement:
• A term of the contract?
o Breach of contract > put you in the position as if the contract was performed (eg. Look at
market value and pay damages)
• A representation inducing the contract?
o If representation is false > you can recover money by reversing the effect of the contract
on restitutionary claim
o If representation is knowingly false (deceitful), you can use tort law (an innocent
representation is not a tortious wrong) > compensate you for your prejudice – put you in
the state had the statement not been made
▪ What would you have done differently?
- Paid lower? > get some money back
- Not bought it? > rescind contract and get money back
- Continue with purchase? > you would only pay market value for it
find more resources at oneclass.com
find more resources at oneclass.com
3
• Mere puff? (eg. Exaggerated sales hype) > no remedy
❖ Is the pre-contractual statement a term of the contract?
1) Is evidence of this statement admissible?
1. If contract is oral/partly oral + written > yes > Moe to is it poisso?
2. If it is wholly written, consider the Parol Evidence rule
o Rule: prevents courts from admitting all extrinsic evidence to vary, contradict,
add or subtract from terms of the document and from explaining the meaning of
terms > to preserve certainty of writing
o Evidence excluded:
1) Written and oral prior negotiations
2) Parties actual subjective intentions
3) The subsequent conduct of the parties
o Rule applies when court is satisfied that the document was intended to be the whole
contract
1) Traditional: where document objectively appears on its face to be the whole
contract the Parol evidence rule can be applied Thorne
2) Lenient: The Parol evidence rule has no operation until it is first determined
that the contract is wholly in writing (extrinsic evidence is available to
determine this issue PAROL EVIDENCE RULE DOES NOT APPLY HERE) SRA v
Heath Outdoors
o Ways around this rule:
1) Try to prove the contract is not intended to be wholly in writing (partly
oral/written) Sra v Heath Outdoors
▪ It was made clear that the contract could not be changed SRA
SRA: If the Plaintiff claims that the agreement was partly oral, the court will examine extrinsic evidence to determine
whether the contract was wholly or partially in writing. If the court determines, after looking through the extrinsic
evidence, that the contract was wholly written, then the Parol evidence rule comes in and the extrinsic evidence will
not be allowed for the identification of terms.
2) Collateral contract: the pre-contractual statement formed a basis of a
separate contract
▪ One party makes a promise connected to, but independent of, the main
contract – in exchange for which the other party enters into the main
contract (consideration) Esso, Shepperd
- Example: I promise to do this, if you sign this contract to buy a
boat from me
- Must be promissory and must be intended to induce the main
contract Shepperd
- Must be consistent with main contract (add, subtract, vary,
contradict) Hots
- Entry into main contract must be in response to, or in exchange
for collateral promise AWM
- If it is atuall soethig ou ouldt fid in a main contract,
court will be more willing to find a collateral contract Shepperd
3) Does the statement provide a basis for an estoppel: assumption,
inducement, reliance, detriment
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
What have the parties promised one another as part of their contract? (in order to know their obligations to perform so they do not breach the contract) Can be found in a written agreement (usually easy to identify terms) Ca(cid:374) (cid:271)e fou(cid:374)d i(cid:374) a(cid:374) e(cid:454)(cid:272)ha(cid:374)ge of (cid:272)o(cid:396)(cid:396)espo(cid:374)de(cid:374)(cid:272)e (cid:862)(cid:271)attle of the fo(cid:396)(cid:373)s(cid:863) (cid:894)(cid:373)o(cid:396)e diffi(cid:272)ult to ide(cid:374)tif(cid:455) (cid:449)hi(cid:272)h a(cid:396)e te(cid:396)(cid:373)s of the (cid:272)o(cid:374)t(cid:396)act) Can be found in a verbal contract (must be words specifically spoken, not general impression of what was agreed) watson. One party argues that the terms set out in written form are part of the contract because the other party has accepted those terms. L(cid:859)est(cid:396)a(cid:374)ge, toll: the document signed would not be reasonably be understood to be contractual in character (merely a receipt, voucher, etc. not a contractual document) curtis. By notice (terms displayed or delivered that do not involve a signature) [ baltic ]
