MGM 3351 show 4(1) - Contract Terms Terms refers to the...

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Contract Terms Terms – refers to the stipulations in the contract Express terms v implied terms Specifically agreed by the contracting parties which the parties spell out for themselves Written or oral Terms read into the contract by the court / legislator terms which the law will imply into a contract, even though the parties may not have expressly stated them.
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To imply terms court shall have reference to: 1- customs or trade usage ; Trade usage must be satisfy the requirement of: - reasonableness , - certainty (enforceability and definiteness, clearly established), - notorious ( well known in the market in which it is alleged to exist , it is not necessary that the practice, custom or usage be known to the whole world or by all the persons in the trade,
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or even by the person against whom the custom or usage is being asserted 2- necessary to give business efficacy Reigate v Union Manufacturing Co. Ltd “…Terms can only be implied if it is necessary in the business sense to give efficacy to the contract” 3- based on statutes Statutes provide that some terms must be impliedly read into the contract
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When the term is not implied by statute, term will not be implied to contradict express terms - Terms to be implied– reasonably consider the whole facts surrounding the contract deduced intention of the parties - it becomes clear that the parties must have intended that that the suggested terms should be part of their contract. Yong Ung Kai Contract for sale of timbers was to be subjected to the obtaining of the necessary licence because “it must have been in the mind of the parties”.
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- Officious by stander test Shirlaw v Southern Foundries The idea is to use officious bystander test : if he were to suggest to the contracting parties some express provisions to be included in the agreement, the parties will response positively with, “Oh, of course!” Term may be implied at common law / statute a) Common law – terms are implied to fill in the gaps or omissions where it is clear that a contract has been made.
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e.g. in a contract for telecommunication service where no price is fixed, a reasonable price is implied. If no time for performance is fixed, it is implied that it will be performed w/in a reasonable time. Take into account the parties’ expectation e.g. A hire a car. It is implied in the contract that he will exercise reasonable care in the use of the car
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b) Terms implied by statutes e.g. Sales of Goods Act 1957 S14. In a contract of sale, unless the c/stances of the sale of the contract are such as to show a different intention there is- (a) an implied condition on the part of the seller that, in the case of a sale , he has a right to sell the goods, and that, in the case of an agreement to sell , he will have a right to sell the goods at the time when the property is to pass
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Differences between term and representation Terms – statements incorporated into the contract Contractually binding
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MGM 3351 show 4(1) - Contract Terms Terms refers to the...

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