CHAPTER 7.docx

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Department
Marketing and Consumer Studies
Course
MCS 3040
Professor
Joseph Radocchia
Semester
Winter

Description
CHAPTER 7 – The Terms of Contract The Content of a Contract - promises made by one party to another through offer and acceptance Express Terms - provision of a contract that states a promise explicitly • important essential terms (price, quantity etc.) expressed to each party (parties must be careful not to make assumptions about any aspect of the transaction) Judicial Interpretation of Express Terms Vague or Ambiguous Language - Even if a term is expressed it may be hard to interpret because the language is vague or ambiguous. It can be very difficult to predict how a court will interpret any given contract because “Rules of Construction” are often conflicting – Guiding principles for interpreting or “constructing” the terms of a contract Implied Terms – a provision that is not expressly included in a contract but that is necessary to give effect to the parties’ intention • judge does this when he’s satisfied that not all terms the parties intended to include were included Court will imply terms based on: 1. Business Efficacy – a judge is entitled to imply terms necessary to make the contract workable. The law requires parties to a contract exercise their rights under that agreement honestly, fairly & in good faith 2. Customs in the Trade of the Transaction - Relying on trade customs to imply term is rarely successful, since must be prove custom is so notorious that the contract in question must be presumed to contain such an implied term 3. Previous Dealings with the Parties - It may be possible to imply that their current contract contains the same terms • Risk Management: parties should clarify the basis of the contract each time 4. Statutory Requirements - implies certain terms are a mandatory part of every contract for sale of goods unless specifically excluded by parties Entire Contract Clause – term in a contract in which the parties agree that their contract is complete as written, then court ordinarily will not imply terms C
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