MCS 3040 Chapter 7: Law Chapter 7

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Saturday, November 12, 2016
Chapter 7: The terms of Contract
MCS 3040
Content of a Contract:
contractural terms can be express or implied
Express Term: a provision of a contract that states a promise explicitly
important so that each party knows obligations
Judicial Interpretation of Express Terms:
vague or ambiguous language
assign as reasonable meaning as possible to vague or ambiguous terms
drafter bears the risk of unclear language
if language is so ambiguous it can’t be understood, contract will fail for uncertainty and non
of the promises it contains are enforceable
Rules of Construction: guiding principles for interpreting or “constructing” terms of a contract
ask how a reasonable person would regard the term in question
Implied Term: a provision that is not expressly included in a contract but that is necessary to
give effect to the parties’ intention
judge will do so if not all all terms that parties intended to include in the contract were included
plaintiff carries burden of proof, must show on demonstrate on balance of probabilities that the
terms were intended on being included
Business Efficacy:
permits judges to imply terms necessary to make contract workable
Customs in the Trade of the Transaction:
relying on trade customs to imply a term is rarely successful
Previous Dealings between parties:
if parties have contracted in the past, it may be possible to imply that their current contract
contains same terms
Statutory requirements:
important source of terms implied by statute
found in sale-of-good legislation
provides mandatory parts of contract for sale of goods
Entire Contract Clause: a term in a contract in which the parties agree that their contract is
complete as written
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