Lecture Notes on Contract Law: Terms of Contract

Introduction

• Objective: To conduct a comprehensive revision of contract law to ensure all necessary knowledge is covered.
• Focus on understanding and clarifying aspects of contract law.
• Approach: Summarize the law and engage in discussions through Q&A.

Key Topics on Terms of Contract

Definition and Importance of Contract Terms

• Terms of Contract: Refers to what the parties have agreed upon, including obligations and rights.
• Importance: Central to understanding contractual obligations and potential legal consequences.

Statements and Contractual Terms

• Not all statements made during negotiations form part of contract terms.
• Terms: Statements that form part of the contract and create obligations.
• Representation: Statements not forming part of the contract, which may lead to claims of misrepresentation.

Determining Contract Terms

• Important factors include:
  • Importance of Statement: More important statements are likely terms.
  • Timing: Statements made closer to contract formation are more likely terms.
  • Expertise: Statements by a knowledgeable party are likely terms.
  • Subsequent Writing: If a statement is excluded in the written contract, it’s likely not a term.

Express vs. Implied Terms

• Express Terms: Agreed upon and articulated by the parties.
• Implied Terms: Not explicitly stated but inferred by statute, custom, or court to give effect to the parties' intentions.
  • Implied by Statute: Legislative requirements, such as in sale of goods or employment contracts.
  • Implied by Custom: Established practices in certain trades or communities.
  • Implied by Courts: Terms necessary to give business efficacy to the contract.

Importance of Terms

• Conditions: Fundamental terms, breach allows for repudiation and damages.
• Warranties: Minor terms, breach allows for damages only.
• Innominate Terms: Hybrid terms, effects determined post-breach.

Exclusion and Limitation Clauses

• Clauses that limit or exclude liability.
  • Exclusion Clause: Avoids liability completely.
  • Limitation Clause: Limits liability to a certain amount.
• Legal scrutiny ensures these clauses genuinely form part of the agreement and are reasonably clear.

Incorporating Exclusion Clauses

• Signed Documents: Generally binding unless misrepresented.
• Unsigned Documents: Requires adequate notice before or at the time of contract formation.

Interpretation

• Contra Proferentem Rule: Ambiguous terms are interpreted against the party that imposed them.

Practical Application

• Case Discussions: Engage with problem-based questions to apply concepts.
• Focus on understanding practical implications and resolution of contractual disputes.

Conclusion

• Revise all aspects of contracts that can be examined to ensure comprehensive understanding.
• Engage with exam-type questions to solidify understanding.

Q&A and Discussion

• Use class time to clarify doubts and engage in deeper discussions about problem-solving in contract law scenarios.