Law 5110 Study Guide - Quiz Guide: Consumer Rights Act 2015, Undue Influence, Radical Change
Contract law – Terms of the Contract
1. Purpose of contract law
• Fall back/ safety net- Contract law helps resolves disputes between parties, Rights one
can fall back on, prop for parties to fall back on, safety net.
• Can be used in long term arrangements- provides, plan and reliance vital elements,
accommodation contracts, provides certainty
• Daily contracts/ Spot contracts- legality to spot transactions, mark boundaries between
buying and stealing.
Freedom of contract- Freedom to choose what contract you want enter. Theory flawed. All of us
need to enter a contract, supermarket food example, accommodation. You have no choice. Terms
will be prescribed, fixed terms.
Structure of contract law:
1. Making and breaking contract- offer, acceptance, certainty, intention
i) Make them do what have promised
ii) Damages and compensation
2. Leaving a contract- individual topics
i) Mistake when entering a contract, narrow type mistake needs to be proven
ii) Frustration, you cannot perform the contract, radical change.
iii) Misrepresentation- one party does not tell the truth.
iv) Duress- threatened into a contract, you have the choice, external
v) Undue influence- someone has manipulated you , internal influence
vi) Unconscionable conduct-
vii) Illegality- courts do not want to enforce criminal activity, unenforceable.
2. Implied Terms
Implied v Express terms
Express term is a term which has been clearly articulated by a party.
Implied terms is when parties do need to explicitly articulated by a party/ parties.
i) Sale of Goods Act 1979 (business)
Goods of reasonable quality
Reasonably fit for purpose
ii) Supply of Goods and Services Act 1982 (business)
Service done with reasonable care and skill
iii) Consumer Rights Act 2015 (trader to consumer)
Goods of reasonable quality
Reasonably fit for purpose
Service done with reasonable care and skill
Statute will tell you what to include in a contract, no freedom of contract.
Implied terms at common law
• Necessary for business efficacy: The Moorcock (1889)
• So obvious it goes without saying:
i) Shirlaw v Southern Foundries (1939)
ii) Reasonableness of term not enough, it needs to be necessary and
very obvious term:
- M&S v BNP Paribas (2016)
• Custom of the trade, which is notorious, certain, and consistent with this
contract:
i) Cunliffe-Owen v Teather (1967)
• Implied as standard in contracts of this type (IMPLIED IN LAW):
i) Liverpool Council v Irwin (1977) (landlord / communal areas)
ii) Malik v BCCI (1998) (employer / duty of confidence)
3. Express terms
Is it a term, representation, or ‘puff’?
→ No legal consequence = puff
→ If you make a Representation that is false, it renders a contract voidable.
→ Damages that flow from misrepresentation, they is test in tort which gives values to the
damages.
• Upgrading from a ‘puff’:
Carlill v Carbolic Smoke Ball (1893)
→ (advert provided ‘guarantee’),
→ Very specific, smoke this ball and it will cure you, if contacted with any of these
diseases then we will compensate you
More likely to be term if important:
• More likely to upgrade to a term if it is vital to the contract.
Bannerman v White (1861) (sulphur on hops)-
→ The claimant, Bannerman, formed a contract with the defendant, White,
regarding the purchase of hops, intending to use them to produce beer. The
claimant specifically enquired as to whether the hops had received a sulphur
treatment as it is only possible to make usable beer from hops that have not
received this treatment. Furthermore, the claimant expressly stated that he
would be unwilling to buy the hops if they had been treated. The defendant
assured the claimant that the hops were untreated, however in fact the hops
had received sulphur treatment and were subsequently useless to the
claimant; thus Bannerman brought an action against White for damages,
Document Summary
Freedom of contract- freedom to choose what contract you want enter. All of us need to enter a contract, supermarket food example, accommodation. Structure of contract law: making and breaking contract- offer, acceptance, certainty, intention. Damages and compensation: leaving a contract- individual topics. Mistake when entering a contract, narrow type mistake needs to be proven. Frustration, you cannot perform the contract, radical change. Misrepresentation- one party does not tell the truth. Duress- threatened into a contract, you have the choice, external. Undue influence- someone has manipulated you , internal influence. Illegality- courts do not want to enforce criminal activity, unenforceable: implied terms. Express term is a term which has been clearly articulated by a party. Implied terms is when parties do need to explicitly articulated by a party/ parties. Supply of goods and services act 1982 (business) Statute will tell you what to include in a contract, no freedom of contract.
