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Chapter 7

MCS 3040 Chapter Notes - Chapter 7: Parol Evidence Rule, Condition Subsequent, Click Wrap


Department
Marketing and Consumer Studies
Course Code
MCS 3040
Professor
Joseph Radocchia
Chapter
7

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Chapter 7: The Terms of a Contract
The Content of a Contract
Express Terms: terms of the contract that state or make explicit one party’s promise to another
Implied Terms: terms that are not expressly included in a contract but that are necessary to
give effect to the parties’ intention. A judge may imply terms in a contract to make the contract
workable.
How Do Courts Interpret Contracts?
Vague or Ambiguous Language?
Courts are required to enforce the contract as it is written and to rely primarily on the
plain, ordinary meaning of the words that the parties have chosen
The court assigns as reasonable a meaning as possible to vague or ambiguous terms
If the contract has been drafted by one of the parties, any ambiguity in language will be
construed against that party in favour of the other
Implied Terms
Terms that are not expressly included in a contract but that are necessary to give effect to the
parties’ intention. A judge may imply terms in a contract to make the contract workable.
Examples of Implied Terms
Terms imposed for business efficacy to make the contract workable
Customs in the trade of the transaction
If the parties have contracted in the past, it may be possible to imply that the current
contract contains the same terms
Statutory requirements for example, the Sale of Goods Act makes certain provisions
mandatory in contracts, uncles specifically excluded by the contract
Contractual quantum meruit
Parole Evidence Rule
A rule that limits the outside evidence a party can introduce concerning the contents of a
contract that has been put in writing.
The rule forbids outside evidence as to the terms of a contract when the language of the
written contract is clear and the document is intended to be the sole source of
contractual content
Contractual Quantum Meruit
Awarding one party a reasonable sum for the goods and services provided
Under a contract where the contract was not completed
Or
Where a price was not agreed upon but there was an implied promise to pay
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