Terms of the contract two preliminary issues: Two preliminary issues

INCORPORATION OF TERMS

In order to be effective

In order to be effective

a term must have been

incorporated

into the contract

between the parties

How do we do it?

Incorporation by signature

L’Estrange v. Graucob Ltd [1934] created L’Estrange Rule

A person is bound by his signature.

The claimant purchased a cigarette vending machine for use in her cafe. She signed an order form which stated in small print 'Any express or implied, condition, statement of warranty, statutory or otherwise is expressly excluded'.

The vending machine did not work and the claimant sought to reject it under the Sale of Goods Act for not being of good quality.

Held: In signing the order form she was bound by all the terms contained in the form irrespective of whether she had read the form or not. Consequently her claim was unsuccessful.

Possible Defences to Signature Rule

• Non est factum – ‘defective education, illness or innate incapacity’
• Signed as a result of a misrepresentation. See: Curtis v. Chemical Cleaning and Dyeing Co Ltd [1951]
• Unfair Contract Terms Act 1977

Curtis v. Chemical Cleaning and Dyeing Co Ltd [1951]

Curtis bringing claim:

‘When I was asked to sign the document I asked why. The assistant said I was to accept any responsibility for damage to beads and sequins. I did not read it all before I signed it.’

But the dress had a colour spot.

Incorporation by notice

• Notice must be given at or before the time of contracting
• Terms must be contained or referred to in a document that is intended to have a contractual effect

IMPLIED TERMS

IMPLIED TERMS

SOME IMPORTANT TERMS

IN CONTRACTS TODAY

ARE THE RESULTS OF IMPLICATIONS

RATHER THAN

EXPRESS AGREEMENT

1. TERMS IMPLIED BY STATUTE

Ex. Sale of Goods Act 1979

Sections 12-15 – impose important obligations upon sellers of goods

2. TERMS IMPLIED FROM USAGE OR CUSTOM

• Standard form contracts;
• INCORTEMS (CIF, FOB..)
• lex mercatoria
• UCP (international level)

3. TERMS IMPLIED BY THE COURT

• Terms implied in fact
• Terms implied in law

Ex. ‘trust and confidence in contracts of employment’

HOMEWORK

• Try to understand what kind of obligations do the Sections 12-15 of Sale of Goods Act 1979 imposes on sellers.
• READ THE TEXT BOOKS AND CASES MENTIONED IN SLIDES
• Try to get the logic and legal reasoning of the judgements