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Topic 3 Terms & Exemption Clauses

Topic 3 Terms & Exemption Clauses - TOPIC 3 TERMS...

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TOPIC 3: TERMS AND EXEMPTION CLAUSES Readings: Arjunan & Majid, Business Law in Hong Kong , chaps. 13-14. TERMS Express Implied Oral Written - Express terms - terms specifically agreed to by the parties; Can be in writing or oral or partly in writing and partly oral. Example: “The hotel agrees to provide the guest with accommodation from 16 October to 25 October at the rate of $650.00 per night”. - Implied terms - terms ‘read into’ the contract by the courts. Example: “A hotel room provided to a guest must be fit for habitation”. Contrac t = express terms plus implied terms Terms may be implied into a contract in the following ways: 1. Previous conduct of parties Hollier v Rambler Motors [197] 1 All ER 399 Facts: H’s car was damaged by fire when garaged with R for repairs. On three or four occasions in the previous five years H had his car repaired at R’s garage and on each occasion had signed a form which stated that R was “not responsible for damage caused by fire to customer’s cars on the premises”. Held: R was held liable to H on the ground, inter alia, that this evidence was not enough to establish a course of dealing between the parties from which a term would be implied into the contract. 2. Custom or trade usage Where contract is silent on a point, custom or trade usage may help. Example Three months before a conference, a professor reserves a room for 5 nights and agrees to pay for the same at rate quoted by hotel. Reservation is accepted and payment in full is made. Thirty five days before the scheduled arrival date, professor cancels the booking and wants a full refund. The parties did not discuss the terms for cancellation and made no provision for refund of deposit. Trade usage or custom: If a room reservation is cancelled 30 days before the scheduled arrival date, the guest is entitled to a full refund. Note: The contract can provide i.e. parties can agree that the whole or a certain percentage of the payment already made may be forfeited in the case of a no show. 42
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A custom or trade usage cannot over-ride an express term in a contract A contract between a photographer and a film star required the photographer to take photographs at an event at which the film star was appearing. The written contract between the parties contained a clause (i.e. an express provision) that read: “All the photographs taken together with the negatives will be returned to the film star”. After the event, the photographer provided the film star only with photographs of the event and refused to surrender any of the negatives. He claimed that it was a standard trade practice for a photographer to keep the negatives. Clearly, the trade practice, even if it exists, cannot over-ride the express term of the contract. 3.
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Topic 3 Terms & Exemption Clauses - TOPIC 3 TERMS...

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