Week 8 - Modified Slides - Sem 2-2016

Week 8 - Modified Slides - Sem 2-2016 - Recap...

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Recap
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Statements (made during negotiation) Terms of a Contract Representations Collateral contract Misrepresentation Enforceable “zone” Unenforceable “zone” Puffery
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Term v Puffery 3 Statements (made during negotiation) Term Puffery Verifiable ENFORCEABLE Not verifiable UNENFORCEABLE
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TERMS EXPRESS TERMS IMPLIED TERMS Implied terms by courts Implied terms by statute Inside a signed & written contract Outside - but incorporated by reasonable notice
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Incorporation by Reasonable Notice CONTRACT A………………… …………………… …………………… …………………… …………………… …………………… …………….. B………………… …………………… …………………… …………………… …………………… ………………….. OUTSIDE STATEMENTS INCORPORATION Two conditions: 1. Reasonable notice of the statement is given to the other party 2. Reasonable notice given before the contract was formed. Sign Document Verbal statement
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Week 8 - Contents of a Contract (continued)
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Intended Learning Outcomes 1) Review parol evidence rule . 2) Understand how to enforce a non-contractual representation as a collateral contract or a misrepresentation 3) Understand disclaimers 4) Understand contract remedies 5) Understand when a contract ends
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8 Part I: Parol Evidence Rule
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Parol evidence rule What is it ? Parol evidence = O ral statement Parol Evidence Rule (PER) = Rule about the validity of an oral statement. Note: Different to its name, PER also applies to written documents and signs.
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Parol Evidence Rule If there is a written contract - PER applies. Accordingly, parties are not able to use oral or other outside evidence… to “ subtract from, add to , vary or contradict the language of the written instrument ”. ( SkyWest Aviation Pty. Ltd. v Commonwealth of Australia ). Simply put, a written contract cannot be changed by outside statements !
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You are bound by what you sign !!!
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Parol Evidence Rule Why ? If the contract is written and signed – presumed to contain everything Adding terms at a later stage – adding uncertainty. According to PER, If there is an inconsistency between outside statements and written terms, The written terms will prevail. Does this rule seem compatible with incorporation by reasonable notice ?
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Three Exceptions Gate 1: The statement is very IMPORTANT ; Gate 2: The statement can be used to CLARIFY a term; Gate 3: The statement can be used to FIX AN ERROR. Outside statements Incorporated by reasonable notice Gate 1 Gate 2 Gate 3 Signed & Written Contract PER
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Three Exceptions Exception 1: If the outside evidence is very important to the agreement, the court may conclude that it is a term of the contract.
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