SElLecture 6 - 2010 - TERMS OF CONTRACT LECTURE 6 Terms of...

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TERMS OF CONTRACT LECTURE 6
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Terms of Contracts
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EXPRESS TERMS Express terms are terms in the contract which are expressly agreed to by the parties orally or in writing. What could be some express terms in the following contracts: - tenancy agreement, - employment contract? Note: generally parties are free to agree to any terms. Even if an express term is unfair, generally it is still binding. - Why is this so? - So what is the implication of this on a business?
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Exceptions to the Rule that Express Terms do not have to be Fair
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(b) EXAMPLE OF A CLAUSE WHICH MAY BE AGAINST PUBLIC POLICY One example of a clause which may be against public policy is the restraint of trade clause. A restraint of trade clause is a clause which restricts what a person can do, for instance, in terms of his employment or business, and is typically anti-competitive in nature.
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Restraint of Trade Clauses Why are ROT clauses potentially against public policy? However, they may not always be invalid:
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Reasonableness of ROT
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(a) Legitimate Reason? What will be a legitimate reason would depend on the type of contract and type of restraint in question. For example, if it is an employment contract and the restraint states, cannot work for a competitor, whether there would a legitimate reason, depends on: does the employee have access to trade secrets/highly confidential information and/or can he pull over customers.
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(b) Too Wide? The clause cannot be too wide in terms of area, time and scope of limitation. Example: ROT in contract of a baker: (i) Singapore
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IMPLIED TERMS As said, in addition to express terms, a contract may have implied terms:
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Implied Terms - Statutes A term may be implied by a statute. For instance, the Sale of Goods Act, states
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SElLecture 6 - 2010 - TERMS OF CONTRACT LECTURE 6 Terms of...

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