Understanding the Role and Implications of Silence in Contracts, Study Guides, Projects, Research of Law

Download Understanding the Role and Implications of Silence in Contracts and more Study Guides, Projects, Research Law in PDF only on Docsity! Indian Journal of Integrated Research in Law Volume II Issue I | ISSN: 2583-0538 Page: 1 CRITICAL ANALYSIS OF SILENCE IN CONTRACT Manoj V Amirtharaj, School of Excellence in Law, Chennai ABSTRACT This article researches around the ambiguous and unspoken topic in the law of contracts which is silence, describing the operating, scope, and limits of the act of silence in a contract. Further, we will be seeing how the default rules apply and cover the voidness of silence, as silence is not mere nonattendances of action, we can also describe silence as also a type or mode of action, creating a value for void for making a balance in a contract. The implied terms in a contract are operated by the expressed operations of a contract which allows the silence to express it is operations through the overall output of a promise and acceptance in a contract. Silence is not an automatic reaction but an accommodating action for pre-inactive or post- inactive conditions or situations of parties in a contract, creating assumptions of others’ conduct from the contract complying with the default procedures from the agreed terms of the contract. this research article will also deal with how the silence in contracts has evolved from the origin of the existing court system in the world as the silence in contracts can be framed or codified into laws but only can be narrowed down through judicial decisions by correcting in silence in contract from daily legal issues arising from public transactions. The leverage in contracts is sometimes maintained through the silence by the way of giving importance to the local culture to create majoritarian default rules which differ from place to place. These majoritarian rules are set by the usual modes or most common default procedures in the locality or on the particular type of contract, created unwritten and uncodified procedures and rules which apply to silence in a contract. This article will be dealing with the elaborations of the concepts above mentioned. Indian Journal of Integrated Research in Law Volume II Issue I | ISSN: 2583-0538 Page: 2 INTRODUCTION In this article, we are visiting to see the presence, role, scope, limitations, and judicial decisions regarding Silence in a very contract. The word silence means “nonattendance of sound or noise”1 by and large importance. In any case, the word quietness in a legitimate meaning is “ Pure and easy silence cannot be considered as a consent to a contract, besides in situations when the hard of hearing quiet is bound in honestness to explain himself, during which case, silence gives assent". In contracts, most of the terms and expressions are explicitly communicated between parties to make a consensus ad idem. this will be found in Raffles v. Wichelhaus2 where both the parties have entered into a contract purchasable of cotton through land ship named "peerless" from Bombay one leaving from October and another leaving in December, where the litigant thought it was October and also the plaintiff delivery was on the December ship, hence the plaintiff filed a case for breach of contract. Hence the court held that there was no consensus ad idem and “the contractual terms on the time of conveyance is silence", in this way no authoritative contract. Silence in an exceedingly contract is usually void until it is drawn to any party’s conduct implicitly expressing his/her consent or on the other hand dis assent. with no lead, no goal is long of it, consequently no official contract. In this article further, we'll see silence in several parts for the formation of a contract, exceptions, and its limitations together with supporting case laws. CONTRACTUAL SILENCE Section 9: Promises, express, and implied. Thus far, because the proposal or acceptance of any promise is formed in words, the promise is claimed to be expressed. Thus far in and of itself proposal or acceptance is created otherwise than in words, the promise is professed to be implied. Contract law mainly focuses on developing default rules for contracts, which are silent, these rules are formed supported general principals and procedures established by the majoritarian on the subsequent sources of contractual obligations: 1 See, Merriam webster dictionary, 2020. 2 [1864] EWHC Exch J19. Indian Journal of Integrated Research in Law Volume II Issue I | ISSN: 2583-0538 Page: 5 Illustration: A, a customer of a restaurant owned by Bordering food from the menu, to the waiter, here it’s A impliedly accepted the invitation to offer(menu) by B, ordering it impliedly accepting B proposal price creating an implied promise with standard terms and conditions. If A refuses to pay B, A is held liable and the court will apply only Standard rules because it’s a silent promise. Further from the above illustration, we will derive to a degree where it deals with intention of the contract, where the court may apply rules and the judge supported the intention of the contract and its parties. An implied term in a very contract should be derived from the intention and operation of an agreement, if not compelling with the subsequent conditions a contract’s implied term operations are going to be made void or the complete contract is going to be made invalid. The process of implying a term in an express contract or presuming the presence of a term in an express contract. within the case of KA Mathai v. Kora Bibbikutty12 where the word implied is employed to point that to exist in a legal document which wasn’t before the court. Privy council in an appeal from Australia BP Refinery pty Ltd v. Shire of Hastings13 has held: • The First instance, an implied term must be equitable and reasonable. • Second, it must be necessary to give business efficiency to contract and no term can be implied if the contract is effective without it. • Third, it must be obvious “it goes without saying”. • Fourth, it must be capable of clear expression. • Fifth, it must not contradict any express term of the contract.” The UNIDORIT principle says who to ascertain the intention of parties by the following: 1. Reasonability test. 2. Subjective test. 3. Objective test. INACTIVITY AS PROPOSAL Section 2. Interpretation-clause: A (proposal) When one person signifies to a different his 12 See,(1996)7 SCC 212. 13 (1977)180 CLR 266, See pg. 9. Indian Journal of Integrated Research in Law Volume II Issue I | ISSN: 2583-0538 Page: 6 willingness to try and do or to abstain from directing anything, to obtain the assent from other for doing such act or abstinence, he's said to form a proposal; A proposal initiated the method of contract formation, and hence cannot be made through silence or inactivity. Certain cases have given rise to the likelihood of silence being an efficient proposal. Substantial delay, i.e., silence and inactivity by the claimant in pursuing the relevancy arbitration after it's been organized may add up to a proposal to leave it. Accordingly, a consent to present a question to assertion can be said to have been deserted by said to possess been abandoned by a long delay where neither party has taken steps in an arbitration proceeding for an extended time. In the case, Andre’s Compagnie SA v. Marine Transocean Ltd14 (the sumptuous Sun )” as explained in Paal Wilson & co A/s v. Partenreederei Hanna Blumenthal15 (The Hannah Blumenthal), through it was held that no agreement to abandon the reference was formed. An agreement can’t be created to create a contract without an expression of willingness for signifying to a different with the subsequent condition: 1. Consistent. 2. Exact. 3. Unambiguous. 4. Communication without misleading others. 5. Free consent. These are the essentials of the proposal for a contract, which may not be satisfied by an implied proposal or offer which can express the willingness of the offeror to offeree in an actual or certain manner in silence or inactivity as a mode of communication for a suggestion. SILENCE AS ACCEPTANCE IN THE FORMATION OF CONTRACTS SILENCE AS ACCEPTANCE within the FORMATION OF CONTRACTS. - "He who remains silent certainly doesn't speak; nevertheless, indeed, he doesn't deny."'16 things expressed by this truism have been the source of considerable confusion in our law of contracts. the choices are almost as varied because of the jurisdictions, and nowhere will we find an 14 See,[1985]2 All ER 993. 15 See,[1983]1 All ER 34. 16 Digest, L, 17, 142 (Paulus). See POUND, READINGS IN ROMAN LAW, 2d. ed.,~25-26. Indian Journal of Integrated Research in Law Volume II Issue I | ISSN: 2583-0538 Page: 7 adequate analysis of the questions involved or the principles upon which they need to be decided. Though acceptance of a proposal is typically made by spoken or written words, very often the offer may involve an act or authorize another mode of acceptance. because the offeror is that the "czar of his offer" such acts, when induced by the offer,17 constitute an acceptance. In such cases, there's something external by which to gauge the intent of the parties. But where the mere passive conduct of the offeree is claimed to be an acceptance, the question is tougher. In considering this problem, some difficulty has arisen thanks to the failure of the courts to contemplate the difference between a proposal for a unilateral and one for a contract and therefore the difference within the situations produced thereby. within the case of the previous, the courts often have allowed recovery, purportedly on the premise of contract, which might be justified only on another grounds. Illustration: “ If A sends goods to B under a contract which is later rescinded by agreement and A tells B that he must pay a particular sum in cash or return the products, the mere retention of the products by B doesn't constitute a contract. B has performed neither of the alternatives contained within the offer. True, he's also held liable thanks to his duty to return the products, but such liability must be founded upon the conversion of the products or in the contract for his or her value. Even from an objective standard, the contract doesn't accommodate the terms of the offer. However, where the "acceptance" if effective would create a contract executory on either side, we have presented the unavoidable question, May silence be construed as acceptance ?”18 The problem may arise with the offeree because of the plaintiff. Where the offer authorizes an ambiguous act as acceptance, the performance of such an act with the intent to suits the offer creates the contract. it is not sufficient to answer that the proof of intent is more or less within the arbitrary power of the offeree; the offeror must have understood the case he was creating. Likewise, where the offer expressly or impliedly authorizes silence as acceptance, such passive 17 If the act is performed in ignorance of the offer, as where a reward is offered for the capture of a felon, there is no contract. Ball v. Newton, 6i Mass. 599 (i851); Fitch v. Snedaker, 38 N. Y. 248 (i868); Williams v. West Chicago St. Ry. Co., i9i Ill. 6io, 6i N. E. 456 (i9oi). The English courts have entertained a contrary view. Williams v. Carwardine, 4 B & Ad. 621 (i833); Gibbons v. Proctor, 64 L. T. (N. S.) 594 (i89i). Also, if the offered expressly states that his acts are not performed in acceptance. 18 Silence as Acceptance in the Formation of Contracts. See, Harvard Law Review, Feb. 1920, Vol. 33, No. 4 (Feb. 1920), pp. 595-598.