Contract Terms
Contract terms refer to the specific details and conditions outlined in a legally binding agreement between parties. These terms typically include the rights and obligations of each party, payment terms, delivery schedules, and any other relevant provisions. Clear and precise contract terms are essential for ensuring mutual understanding and compliance between the parties involved.
7 Key excerpts on "Contract Terms"
eBook - ePub- Gilbert Kodilinye, Maria Kodilinye(Authors)
- 2013(Publication Date)
- Routledge(Publisher)
...Chapter 6 Terms DOI: 10.4324/9780203488645-6 Contractual Terms The terms of a contract are its contents, and they define the rights and obligations arising from the contract. Contractual terms may be express or implied. Express terms are those specifically laid down by the contract, and they consist of express oral or written statements made by the parties. Implied terms are those which are not specified in the contract but which are implied either (i) by statute, or (ii) by custom, or (iii) by the court. Express Terms A contract may be (i) purely written, (ii) purely oral, or (iii) partly written and partly oral. Generally, no formality is required for a term, whether oral or in writing (or partly orally or partly in writing), to form part of a contract. If the terms of a contract are in dispute, a court will determine what terms were decided on by the parties. The object of the court in this exercise is to do justice to the parties, and the court should not be ‘deterred by difficulties of interpretation, as difficulty is not synonymous with ambiguity’. 1 This is a question of fact, and, in respect of oral contracts, precise evidence may be required in order to clarify exactly what the terms of the agreement were, as the dispute may turn on very fine details. 2 1 Hardman v Meister BS 1993 SC 64. 2 For example, in Smith v Hughes (1871) LR 6 QB 597, the dispute centred on whether goods were described as ‘good oats’ or ‘good old oats’;. Proof of Terms Oral contracts Terms and representations Statements made by parties can be categorised as (1) promises or (2) mere representations. Except in the case of the simplest transactions, there will generally be a period of negotiation before the final terms of the contract are agreed. Promises (sometimes called ‘warranties’) made during negotiations and not withdrawn will form part of an oral contract and are therefore binding...
eBook - ePub- Chris Turner(Author)
- 2014(Publication Date)
- Routledge(Publisher)
...Persimmon appealed to the House of Lords. Lord Hoffman, giving the leading judgment, agreed with this dissenting judgment. While he felt that it would require a strong case to persuade the court that something had gone wrong with the language used by the parties in the agreement so that it did not in fact represent their true intentions that this was such a case. The House held that the correction of such mistakes by construction of the contract was not separate branch of law but an essential part of the task of construction and also that where there was a clear mistake in the written expression of the agreement that the court should not read the agreement in isolation but should consider it in the context of the commercial background. Figure 6.2 Diagram illustrating the relative effects of terms SUMMARY Terms are the obligations under a contract. Terms must be incorporated into the contract. In written contracts the terms are in written form but if the contract is oral, judges may consider different factors to determine whether the terms are incorporated, eg whether the term was sufficiently drawn to the other party’s attention before the contract was formed. Although a party is generally bound by anything that he has signed, whether he has read it or not. Terms can also be implied into a contract in three ways: by fact – because of the presumed intention of the parties; by law – because the courts feel that such terms should always be present; and by statute – usually for consumer protection. There are different types of term – and which category a term falls into and which remedy is available are determined by how important it is to the contract. A condition is a term which ‘goes to the root of the contract’ – breach of a condition would render the contract meaningless, so that the party who is the victim of the breach can repudiate his obligations under the contract as well as or instead of suing for damages – but a warranty is a minor term with only damages available for breach. Judges...
eBook - ePub- Keith Owens(Author)
- 2013(Publication Date)
- Routledge-Cavendish(Publisher)
...CHAPTER 7 THE TERMS OF THE CONTRACT A normal business contract, whether written, verbal or made by conduct, consists of a promise or set of promises. These promises are called ‘terms’ and may be express or implied. An express term is what the parties said or wrote or included by their conduct. An implied term is a term which the parties did not expressly agree but which is necessary in order to make the contract work in a business sense. Implied terms mainly come from statute (for example, Sale of Goods Act 1979 implies a number of terms into contracts for the sale of goods) or from the common law (for example, the terms implied into a contract of employment). Occasionally, however, the court may be prepared to imply a term into a particular contract because the court thinks that the parties intended that such a term should be included. It is misleading to think that implied terms are the only way in which the law may intervene to lay down rules which may govern a contract. For example, the Sale of Goods Act 1979 lays down rules as to the time when ownership of goods passes from buyer to seller; the Employment Rights Act 1996 lays down minimum periods of notice which an employer or employee must give in order to terminate a contract of employment. Some of these rules apply only if the parties have not reached a contrary agreement. For example, the rules which govern the transfer of ownership from a seller to a buyer of goods come into this category. Other rules apply irrespective of agreement between the parties. For example, the rule which gives the employee a right to a minimum period of notice to terminate her contract of employment cannot be overridden by agreement between the parties. In respect of matters about which the parties are free to agree their own terms, there are a number of ways of doing this...
eBook - ePubThe Project Manager's Guide to Purchasing
Contracting for Goods and Services
- Garth Ward(Author)
- 2016(Publication Date)
- Routledge(Publisher)
...This means that most adult citizens in the UK have the capacity to contract! Whether they have the authority to do so, from their employers, is another matter (see intention). Legal and possible Any contract has to be legal in its intent. One cannot sue a hit man for a failed contract or a bank robber for a poor return on a raid. In addition to legality, the contract must be possible, that is, regarded as such by any reasonable person. As such, it is not possible for a person to enter into a legally binding contract to invent a perpetual motion machine or a 100 per cent efficient petrol engine. Form All contracts must have a form. Property, for example, must be transferred in a document ‘under seal’ – although an actual seal is no longer required these days. Usually contracts will be written. However this is not to say that they must always be written down. Most contracts between individuals are undertaken on a verbal basis (or in silence), as in buying petrol or a bottle of wine, for example. ‘A verbal contract isn’t worth the paper it isn’t written on!’ due to the difficulty of proof. It is interesting that, in recent years, the courts have upheld some verbal contracts. However, in business the terms associated with the transaction are usually so involved that a written format is used so as to ensure that there is less chance of misunderstanding later. TERMS AND CONDITIONS This statement is in itself misleading as it confuses the hierarchy of obligations contained within the contract. There are two types of terms within a contract: Express terms These are terms that are specifically mentioned or agreed verbally as a part of the contract. There are three types of Express Terms – Conditions, Warranties and Innominate Terms. Conditions are terms that go to ‘the root of the contract’. A condition is an obligation that is so essential that its non-performance may be considered by the other party as failure to perform the contract at all...
eBook - ePub- Max Young(Author)
- 2009(Publication Date)
- Routledge(Publisher)
...Chapter 9 Terms of the contract CONTENTS 9.1 Introduction 75 9.2 Terms and representations 76 9.3 Express terms 80 9.4 ‘Modern’ approach to classifying terms 82 9.5 Implied terms 83 9.6 Summary 88 9.1 Introduction We have now reached the point where we know that a contract has been validly formed. In this section we will examine the contents of the contract (normally the terms that the parties have agreed to when they formed their contract). We’ll be looking at the terms contained in the contract. Traditionally these terms have been divided into conditions (the more important terms) and warranties (the less important terms). However, we’ll see that sometimes the terms are not pre-classified into conditions and warranties, but are left in a ‘limbo’ and classified as innominate terms. It is only when one of the parties to the contract breaks an innominate term that its importance will be considered, this is, should it in the circumstances be now classified as a condition or a warranty? This section will also examine terms that are implied into a contract. In some cases the terms of a contract will not only consist of the actual terms agreed between the parties to the contract, but sometimes the ‘law’ will add (imply) extra terms into the contract. However, to start with, we need to consider what the parties said to each other prior to making the contract. The issue here is whether statements that were made prior to making the contract were intended to be part of the contract...
eBook - ePub- Chris Monaghan(Author)
- 2015(Publication Date)
- Routledge(Publisher)
...This occurs where an Act of Parliament, such as the Sale of Goods Act 1979, implies terms into a contract that stipulate that the goods sold must be of satisfactory quality (s.14(2)). The courts can imply a term in circumstances such as where such a term is required to give business efficacy to the contract. Terms can also be implied through custom and practice. In Chapter 4 we will look at how implied terms can be excluded from a contract. On-the-spot question ? Snow Ltd has purchased a brand new lorry from Auto Lorry Ltd. The parties have verbally agreed that: • the lorry is three years old; • the lorry has only done 25,000 miles; • the terms implied by the Sale of Goods Act 1979 do not apply to this contract. How would you describe these terms? Classification of terms It is really important that you appreciate how terms are classified, as the classification of terms will be significant if a term is breached. Conditions A condition is a term that goes to the root of the contract. It is an important term of the contract and if breached it will allow the innocent party to repudiate the contract and/or claim damages. The parties can decide in a contract whether a particular term will be a condition by defining the term as such or by describing it as being of the essence. If the parties have not classified the term then the courts can determine whether the term will be treated as a condition or a warranty. Warranties A warranty is a less important term of the contract and if breached will entitle the innocent party to claim damages. Innominate terms Key definition: Innominate terms This is a term that is not classified as either a condition or warranty and if the term is breached, only then will the courts determine whether the breach has deprived the innocent party of substantially the entire benefit of the contract...
eBook - ePub- Nick Ganaway(Author)
- 2007(Publication Date)
- Routledge(Publisher)
...Chapter 10 Contract Terms and conditions Be prepared. – Scout motto A t the time of execution of a construction agreement, the owner and contractor are typically friendly but that atmosphere can go downhill in the course of a dispute, and unless satisfactory resolution is reached it may evaporate completely. This highlights the need for a comprehensive contract. This chapter discusses only selected contractual issues that in my experience demand special attention when it comes to signing a construction agreement and is not intended to provide a comprehensive list. Unless you are skilled in interpreting legal documents you’ll need to hire an attorney who specializes in construction law to review any new-to-you construction contract and go over it with you before you sign it. The contents of this book are not intended to provide legal advice. Terms that are important to you may be absent from a contract proposed by the owner, or it can be loaded with provisions that may have serious consequences for you—whether intended or not. Before executing any construction agreement, understand your rights, duties, and the risk it places on you. Obviously, laws applicable to the construction process vary from state to state and from country to country. The laws of the United States and/or its political subdivisions shape the contract provisions referred to here. However, many of them are based on practicality and may be useful to contractors across state and national boundaries. 10.1 Types of Agreement There is no universally standard owner/contractor agreement form used in the United States. The most widely used family of construction agreements are those published by the American Institute of Architects (AIA). The Associated General Contractors of America (AGC) also publishes forms that are commonly used...
