NATURE OF TERMS
Whether expressed or implied, a term may take
any one of the three natures. It may be a condition
or warranty or an innominate term.
NATURE OF TERMS
CONDITION
A term which is
clearly
Vital to the main
purpose of the
contract.
If Breached,
the main
purpose
of the contract
will be affected.
INNOMINATE
TERMS
These are terms that
Can either be a
Condition or
Warranty depending
On how important
The term is to the
Parties concern.
The more important
The term then it
Is considered a
condition
WARRANTY
A term is a warranty
if it clearly
less vital to main
purpose of
the contract.
Its breach may
cause loss to the
injured party but
will not affect the
main purpose
Of the contract.
What is an Exclusion (Exemption) Clause?
An exclusion clause is a term in
the contract. The party who puts it
in seeks to limit or totally exclude
his liability in the event that he
breaches the contract.
Why is Exclusion Clauses important in a
contract?
Exclusion clauses are important
as if there is a breach of any of
the terms covered by the
exclusion clause the party relying
on the clause is protected from
any civil law suit against him.
Example if there is a clause which
protects the car park owners, if
any person were to park the car
and the car was damaged the
owner of the car will not be able to
sue, because of the exclusion
clause.
How is an Exclusion (Exemption)
clause made valid?
1. For exemption clause to be valid it must be made known to the
other party before or at the time of contract.
2.
If it is made known after the contract it is generally invalid
unless there has been consistent dealing between the parties
such that the court might implicate that there was implied
notice in such circumstances.
3.
If the exclusion clause is part of a written document it is
automatically binding when the other party signs the
document even if he has not read the exclusion clause.
In the form of a
NOTICE
The exclusion clause is in
the form of an unsigned
document, example a ticket
or notice. The exclusion
clause will be considered as
valid if the other party knew
or should reasonably have
known of the existence of
the exclusion clause.
IN THE FORM OF
WRITTEN DOCUMENT
If the exclusion clause is
contained in the document
which is signed by the party
seeking to resist the exclusion
clause, the Courts will regard it
as being part of the contract.
This is because he is deemed
to have read, understood and
agreed to the terms in the
document, including the
exclusion clause.
Olley v Malborough Court – what happened?
Olley v Malborough Court – what happened?
L’Strange v Graucob – what happened?
I should have
read the fine print
before signing the
document. Now I
am bound by
what I signed!
1. Vitiating factors are defects
in a contractual agreement.
2.
When there is a vitiating
factor it interferes with the
proper functioning of a
contract.
3. Example of vitiating factors
are misrepresentation,
mistakes in contract, duress
and undue influences and if
the contract becomes illegal.
Question:
What is a void contract?
A void contract means that the contract is invalid. This
would require the parties to this contract be put back to the
original position. Example, if Rambo bought a pen and it
turn out that this pen cannot write, he can return the pen
and get his money back. This means the contract for the
purchase of the pen is null and void.
Question:
What is a voidable contract?
If a contract is considered to be voidable, it
means that it can be made void or the
parties may re-negotiate on different terms.
Example, if I get a contractor to put blue
marble flooring, and the contractor
mistakenly, put green marble flooring –
which is the wrong colour, I could make the
contract voidable. This means that I can
either reject the green marble flooring and
ask the contractor to redo the flooring or I
could accept the green marble flooring for a
different price. If I choose the latter, then the
contract is deemed as voidable.
Must be
statement of
fact not
opinion
Silence does not
amount to
misrepresentation
except in some
situations
MISREPRESENTATION
Statement must
have induced the
party to enter
into a contract
The statement
must be false.
One party
must have
misled the
other party
Types of misrepresentation
NEGLIGENT
MISREPRESENTATION
FRAUDULENT
MISREPRESENTATION
INNOCENT
MISREPRESENTATION
In each case the contract is voidable