Incorporation of Terms in Contracts, Study notes of History

Download Incorporation of Terms in Contracts and more Study notes History in PDF only on Docsity! INCORPORATION OF TERMS Terms may be contained in a written and signed contractual document, but may also be found in unsigned documents, signs, notices, web pages, emails, or in statements made during negotiations. However, where parties enter into a written agreement: Court generally holds them it; Equuscorp v Glengallan -   A contract is, nonetheless, able to be partly oral and partly in writing v   Equuscorp: the alleged oral terms contradicted the terms of the written agreement. HELD that if there was an earlier, oral, consensus, it was discharged by the written agreement EXPRESS TERMS Statements made during negotiations Parties negotiating a contract may make many statements about matters relating to the contract. Should one of these statements prove false, the party to whom it was made may seek a remedy Questions to ask before commencing: -   Is there a written document involved? -   Is there a signature? -   What are the statements about which the plaintiff is relying? 1.   NATURE OF STATEMENT: Is the statement promissory, or a mere representation? For an oral statement to be binding as a term, the statement must have been made as a promise and intended by the parties to be part of their contractual agreement a)   State rule: to rely upon a statement for breach of contract, statement must be promissory; Hospital Ps •   Oscar Chess v Williams: was it a binding promise or only an innocent misrepresentation? b)   Apply tests: i.   The main test: Hospital Products •   Depends on the intention of parties: ascertained objectively, from totality of the evidence •   Intention depends on the conduct of the parties- on their words and behaviour- rather than on their thoughts: Oscar Chess: §   ‘If an intelligent bystander would reasonably infer that a warranty was intended’ ii.   Supplemented by a 4-factor test in Ellul v Oakes 1.   Time of the statement (relative to time of final manifestation of agreement); 2.   (Objective) importance of the statement; 3.   Whether statement was included when agreement was embodied as a written memorandum; 4.   Knowledge and expertise of the parties: whether the maker of the statement was, vis-à-vis the other party, in a better position to know and ascertain the accuracy of the statement c)   Conclusion: i)   Promise: proceed to steps 2 & 3 ii)   Representation: consider steps 4 & 5 (may still enforce through estoppel/collateral contract) Further notes: That the assumption is fundamental to the contract does not prove that the representation was a term (Oscar Chess) nor does establishing that without the statement, the contract would never have been made (JJ Savage) Language used is important; Oscar Chess -   ‘I believe the car is x. Here is the registration to prove it.’ (statement of belief) -   ‘I guarantee the car is x. This is borne out by the rego book. But you need not rely upon that; I give you my personal guarantee it is.’ (promise) v   Oscar Chess: hard to imply warranty if seller, when stating fact, makes clear he has no knowledge but has got info elsewhere à HELD must have been obvious to both that seller had no personal knowledge v   Dick Bentley: Smith told Bentley he was ‘in a position to find out the history of cars.’ v   Couchman v Hill: HELD promissory where P asked D to confirm if the heifers were unserved, to which both answered ‘yes’ v   JJ Savage & Sons: actual words used, i.e. ‘estimated speed’ weren’t promissory. Appellant could’ve required that the speed be inserted in the contract, or could’ve sought a promise that the boat would attain the speed as a perquisite to his ordering. Instead, he was content to form his own judgment about the speed à That the statement made was intended to have some commercial significance upon a matter of importance to the respondent was conceded + that the respondent was intended to act upon it, and that he did act upon it, is clearly made out. However, these facts HELD not to warrant the conclusion that the statement was itself promissory. 2.   INCORPORATION: if promissory, is the statement incorporated as a term of the contract? A: first consider: will the parol evidence rule bar the plaintiff from adducing evidence of the statement? a)   State the rule: where the contract is recorded wholly in writing, extrinsic evidence cannot be used to add to, vary or contradict the terms in the written document; Goss v Nugent b)   First, determine whether contract IS wholly written: can use extrinsic evidence; SRA v Heath Outdoor o   SRA: PER has no operation until it has first been ascertained that the contract is wholly in writing §   When there is a doc. that on its face appears to be a complete contract: evidentiary basis for inferring that document contains the whole of the express contractual terms §   However, open to party to prove that, despite this, the parties have agreed orally on terms additional to those contained in the writing Entire agreement clauses -­‐   Definition: term stating that the written documents contains the ‘entire agreement’ and that no other ‘extrinsic’ statements are to be treated as incorporated into that contract -­‐   Has it been incorporated? à step 3 -­‐   If yes, effect: if you’re bound by an EAC, courts will not work their way around their parol evidence rule 3.   INCORPORATION B: has the promissory statement been incorporated by one of the following methods: a)   By signature? b)   By notice (including ‘by reference’)? c)   By course of dealings? By signature a)   General rule: a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document; Toll v Alphapharm o   Justification: signature is a representation that person signing either has read and approved the contents of the document or is willing to take the chance of being bound by those contents o   Note that if signed, party not required to show due notice has been given of the terms b)   Exceptions: Toll v Alphapharm i.   Where document could not reasonably be considered contractual; Curtis v Chemical Cleaning •   Yes: order forms (L’Estrange); applications for credit (Toll) •   No: time sheets (Toll), request for help for advertising (Toll), receipt/voucher (Curtis) ii.   Where: fraud, misrepresentation, mistake or other vitiating element; Toll •   Curtis: any behaviour that conveys a ‘false impression’ is enough v   Toll v Alphapharm: signed intending that it would affect his legal relationships à No misrepresentation: document invited him to read the terms on the reverse before signing, not rushed/tricked into signing, no concealment, no encouragement not to read. He chose to sign without reading: he could’ve read if he wished v   Curtis: by failing to draw attention to the width of the exemption clause, the assistant created the false impression that the exemption only related to beads and sequins.