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What is a contractual term, and what are the various sources of contractual terms in English law?
Introduction
On the other hand, if the statement is considered to be a mere representation, then there can be no claims of breach of contract as the statement is not considered to be constitutive of the contract. Therefore, i it is crucial to be aware of this distinction between when a statement will or will not, beis considered to be a term of a contract. Hence, this paper seeks to study demonstrate what a term of a contract is, and also seeks tto establish the various sources of contractual terms under English contract law. TheA7 first part of the paper shall study the various principles deciding which determine when a statement will be consideredis a term of a contract, while the second part shall study the various sources of contractual termsA8.
Good – by using the wording of the question, you have ensured that the introduction is focused on what you have been asked to consider. Well done.
Well done again here. By stating what the work will discuss, you have not only demonstrated that the work is focused but have also provided a roadmap of the work. This contributes to a strong structure.
Principles Governing TermsA9
Effective use of a sub-heading to show what the section will focus on. Another contribution to a solid structure.
It must be noted firstly, that while there are indeed a few principles that decidethat determine when a statement is a term, no principle is, on its own, decisive. Rather, their applicability of each principleA10 depends on the particular case itself.3
I have removed ‘their’ here – when using pronouns, you must be careful to ensure that it is clear to the reader what the pronoun is referring to.
FirstlyA11, there is the point of verification of the statement. I– ifA12 the maker of a particular statement has not asked for the statement to be verified by the other party, then such a statement is likely to be held as a term.4 Indeed, in the case of Ecay v Godfrey,5 a person selling the a boat had told the buyer that the boat was in a very sound condition. However, the seller had also expressly stated that the buyer should have the boat surveyed before purchasing it. Hence, it was held in this case that the statement was only a mere representation; – if the condition of having it inspected had not been added by the seller, then it would certainly have been held to be a term of the contractA13.A14
You used firstly at the start of the previous paragraph. I would suggest either changing this, or removing the word from the previous paragraph as this is currently quite confusing.
Please see my earlier comment regarding hyphen use in academic work. Whilst it is not essential to avoid hyphens (so you could keep them if you want), it is better practice to avoid them where possible.
Whilst this is a clear summary of the point of the case, engaging in more detail with the case itself would show a higher level of analysis. For example, can you find the part in the judge's speech where the rationale for the decision was made? Linking to any commentary (secondary sources) on the point would also be beneficial, especially if you include your own opinion of those sources. Remember, the aim of the work is not to describe when something will be considered a term, but to *analyse* when this will be the case. Currently, this paragraph is descriptive.
Each of these sentences require references. It is not enough to reference the case alone. You need to refer to the specific parts of the judgement where these points come from. So for example, at the end of each sentence, you need a footnote which is referenced thus Case Name Citation followed by the paragraph number in square brackets, or the page where the judgment has no numbered paragraphs.
Of course, in some of the references here you are going to be referencing the same case as immediately before so you can use the short case name, refer back to the footnote with the full citation and give the relevant pinpoint.
Secondly, there is the idea of importance of the statement being made. A statement would most likely be considered to be a term where the statement is of such central importance to the person to whom the statement has been madeA15A16. The point here is that if that statement had not been made, the person would not have agreed to enter into the contract.6A17 In the case of Couchman v Hill,7 a heifer had been put up for sale, and the buyer had asked the seller if the heifer was in calf, to which the sellerhe had been answered in the negative. However, after buying it, the heifer suffered a miscarriage and died. When proceedings were instituted, the statement that the heifer was not in calf was considered to be a term by the court, given the high level of importance the claimant had attached to it prior to the conclusion of the contractA18.
It would be beneficial to discuss here whether the importance of the statement is to be assessed objectively or subjectively.
Although I can see this is a follow on to an introductory sentence (which is good as again you are structuring your work well, showing what each paragraph will discuss), it does feel rather unreferenced. A footnote would be beneficial here.
Are you saying that the statement induced the person to enter the contract? I would suggest that you look back through your recommended course textbook to check you fully understand this as the word inducement is commonly used in this area of law.
Again, it is imperative that you reference each part of the judgement, giving the relevant page where, as here, the judgment has no numbered paragraphs. Again, you have used the case to illustrate the point, so well done. However, once again the analysis is very superficial and you have concentrated on describing the case rather than analysing the rationale behind the decision and the impact on the law. Did, for example, the case elaborate on when a term would be considered important? How this would be assessed? Did it matter that the seller portrayed himself as having expert knowledge? What was the impact overall in terms of the law on when a statement will be considered a term of the contract?
Whilst sometimes the facts of a case will be important, the key points are the reasons behind the judgements – how were those judgements reached and how does this contribute to your argument in relation to the question? Consideration of the points I have made here will help to make your work analytical rather than descriptive and thus improve your grade.
Thirdly, the level of specialist knowledge of the person making the statement is also relevant in determining when a statement will be considered a termhereA19A20. Where the person making the statement is deemed to have specialist knowledge or relevanta skill, as compared to the person to whom the statement is being made, then there is a strong chance that this is considered to be a term of a contract rather than a mere representationA21. On the other hand, where the knowledge of the parties is considered to be somewhat equal, or if the person receiving the statement is actually of superior knowledge than the person making it, then the statement will be considered to be a mere representation rather than a termA22.
I have alluded to this above and you may wish to link this with your earlier discussion (once you have considered my points above)
Again, well done for including an introductory statement to develop a strong structure but try to include the wording of the question to ensure a tight focus.
This sentence needs a reference. If you are struggling to decide when to reference a point, remember that unless something is so very widely known to be considered common knowledge, and that as such, the statement cannot be attributed to a source, you should reference it.
Again, a reference is needed for this. This point is discussed in all good contract law textbooks and you may wish to start by either looking through your course textbook or getting hold of any contract law book in your library.
This can be made evident when one considers the case of Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd.8 In this case, the claimant had requested a car dealer company (the defendant) to help him find a well vetted Bentley car. The defendants had thereby found a car which they had told the client to have only travelled 20,000 miles since the engine had been replaced. However, in reality, the car had done over 100,000 miles at that stage. The court had held that the statement made by the defendants regarding the miles travelled by the car as beingwas a contractual term. A23The court citedA24 that the fact that the defendants were car dealers must mean they ought to have superior knowledge as to the actual mileage of the carA25. Therefore, where the maker of the statement hasowing to specialist knowledge, such statements can actually be treated as terms of a contractA26.
Please see my earlier comments for the importance of references each point of the case. It is imperative that every individual point of the case is linked to the judgement itself.
Where exactly?
Can you show this by quoting directly from the judgement?
Are there any exceptions? Can, for example, someone with specialist knowledge exclude their liability in any way for statements?
You will note from my comments throughout this section that whilst your work reads well and is sensibly structured, your analysis could be developed as the work has a very descriptive feel. You must analyse rather than simply describe the cases and engage with the judge's speeches. It would also be beneficial for you to include arguments of commentators - I have suggested that you start with a textbook to check your understanding, but you should also be including journal articles which 'pick apart' the relevant cases. You can show what commentators say and also include your own (justifed with evidence) opinion of those views in order to give the work a more analytical feel; necessary to improve your grade.
I would also note that you have only used one case to illustrate each point. It would be beneficial to discuss the development of the principles (not the facts) of these cases in other cases and indeed whether they have always been followed.
Sources of Contractual Terms in English LawA28
An effective subheading again – well done.
Given that this paper has studied what constitutes a contract, it is now time to consider some of the sources of contractual terms. There are essentially two main sources of contractual terms: – express terms and implied terms. While express terms refer to those terms which parties have openly agreed to, implied terms refer to terms which are implied into the contract by Parliament or by the courts, for various reasons. This section shall first consider express terms, and then deal with insider implied terms.
Express Terms: Parol Evidence Rule
The first source of express contractual terms can be described as the contract itself, as illustrated by the parol evidence rule. By this rule, once a contract has been enshrined into a written document, the parties cannot seek to vary the contract, thereby leading to the outcome that the contract is the sole written repository of contractual terms.9 TheA29 reason behind this rule is because once parties have put in the effort to physically conceptualise their contract, they should not be allowed to vary this, as when framing the contract, they would have already rejected other terms. This leads to conceptual uncertainty if they are allowed to vary the terms of the contractA30.
Again, you need to reference the relevant part of the judge’s speech.
Would it not also be potentially inequitable to hold parties to terms to which they may not have agreed? Once again, these last two sentence require referencing. The parol evidence rule has been discussed extensively in the literature (try searching Westlaw or Lexis Nexis) and it may be beneficial for you to enage with some of this commentary in order to improve not only your depth of understanding, but also your analysis. Once again, the discussion is rather superficial.
However, there are indeed various exceptions to this parol evidence rule, most of which fall outside the scope of this paperA31. It can be stated with conviction that the parol evidence rule today does not apply in a very strict manner, for doing so could lead to considerable injusticeA32. One should consider the cases where the contractual document has been procured through fraud or deceit, or where the contract is not supposed to contain the whole list of terms agreed to by the parties.10A33A34
This is good – you have decided not to discuss these points, but by showing your awareness of them, you make it clear that you have not just forgotten to include them. Well done.
You need evidence for this point (you may find some when you address my comment above about looking in the literature). Remember that whilst it is important to include your own opinion, your opinion must always be justified otherwise it is mere conjecture and will gain you very few marks.
This is a good point, but as you do not elaborate, the discussion feels incomplete.
Such as? This is rather vague.
Express Terms: Signature Rule
Another source of contractual terms is a document which a person has signed, regardless of whether or not he is aware of the content of the document.11A35 This denotes that not only can a contract itselfA36, but that any other document which has the formal signature of a party, could may also be considered to be a source of contractual terms under English law. Once again, this rule comes with certain exceptions, in order to ensure that there are no administrative injustices doneA37A38. Indeed, in the case of Grogan v Robin Meredith Plant Hire,12 it wwashas been arguedA39 that the court must actually consider whether the signed document can bewas capable of being used for contractual purposes, or whether the document was merely an administrative document which had been designed in order to help the parties facilitate their actual agreementA40A41.
It may be prudent to mention that the case (whilst later considered by Lord Denning who acted for one of the parties in the case, to have been wrongly decided) is considered to be the origin of the principle that a signature binds a person. Your current phrasing is rather ambiguous and suggests that by being unaware of the terms in the contract, the signing party may have always been ‘tricked’ into the contract whereas in reality, the party may have just not read the contract itself.
There is something missing here. Do you mean, ‘not only can a contract itself bind a party, but that…..’
Does the Sale of Goods Act have any implication here? For example implying terms as to quality, regardless of the actual terms of the contract? I would suggest that you read up on this.
This sentence does make sense but I would suggest that you consider rewording it into more formal language. It is currently rather chatty which is not appropriate in academic work.
Was it simply argued, or did the court hold this to be the case?
Again, it is imperative that you reference the relevant parts of the judgement. Please see my earlier comments and the marking form for details about how to do this.
The discussion here is (as with the discussion above) rather superficial. You need to be analysing how the rule operates in practice and how the exceptions are applied, linking this back to the question. What is the effect of the operation of the rule on the sources of contractual terms? Again, I would strongly suggest that you engage with the literature in order to improve the depth of the discussion. Tips for how to do this can be found in my earlier comments and on the marking form.
Express Terms: Incorporation of Written Terms
Another source of express terms is the process wherebyof parties to a contract agreeing to incorporate a set of written terms into their contractA42. Three main points must be fulfilled in order for this source of contractual terms to be active. Firstly, notice of the terms to be incorporated must be given prior to the conclusion of the contract, or at the point of the conclusion of the contract.13 Secondly, the terms must have been contained within a document that was intended to have contractual effect in practiceA43. In determining this, reference must be made to current commercial practices as to whether or not it can be considered to be soA44.14 Thirdly, reasonable steps must have been undertaken in order to bring the written terms to the attention of the other party to the contract.15A45
Can you reference this to discussion in a textbook for example?
This needs a reference please.
‘To be so’ what? I am struggling to see what you mean here. Please try reading your sentence out loud to be sure that it makes sense.
Once again, you have simply given a descriptive overview of express terms. You need to be analysing how they work in practice, critising their operation (with reference to commentary) in order to improve the analysis in the work. I would suggest again that you try searching a legal database such as Westlaw or Lexis Nexis for relevant commentary to use as a starting point.
Express Terms: Incorporation by Course of Dealing
Finally, another source of express terms is the course of dealing between of the parties itselfthemselvesA46, whereby terms could be incorporated into contracts through a course of dealingA47. Such a course of dealing between the parties must have been regular and consistent, in order for this to serve as a source of express contractual terms.16 WhereA48 the contract has however been concluded between commercial entities with reasonably equal bargaining power, the courts have been knownA49 to accept that even as few as two prior contracts between them could establish a regular course of dealing, for the purposes of incorporation of terms.17
As parties is plural, you need to use themselves rather than itself, as the latter is singular.
You need to reference this.
Also, you repeat the phrase 'course of dealing' within the sentence. Please consider rewording to avoid this.
Again, to improve the analysis, you need to be looking at what the judges actually said in the case in addition to evaluating relevant commentary. Doing this will ensure that the work is not simply a descriptive overview of the law, and thus gain you more marks.
Where? I can see that you reference a case in footnote 17 but as you do not engage with the case, it is difficult to be certain that you understand the law and indeed, the discussion remains superficial because you are not analysing the law.
Implied Terms: Statutory Terms
The first source of implied terms is statutory provisions, whereby Parliament has sought to imply terms into contracts for various reasonsA50. For example, when one considers the Sale of Goods Act 1979,18 sSection 12(1) states that it is an implied term of a contract for the sale of goods that the seller has the right to sell the goodsA51. Similarly, sSection 14(2) of the Act states that where a seller is selling goods in the course of his business, then there is an implied condition that the goods that are being supplied as per the contract must be acceptable qualityA52.
What might such reasons include?
You need to reference the section in a footnote. I can see you mention s12(1) in the sentence, but you still need a footnote referencing it. Which provision of the Consumer Rights Act 2015 deals with the right to supply goods when a trader sells to a consumer?
Please see my previous comment. The statutory wording is “satisfactory quality”. Distinguish section 14(2) from section 9 of the Consumer Rights Act 2015, which applies when a trader sells goods to a consumer.
Implied Terms: Customary Practices
The second source of implied terms is customary practice, whereby any relevant custom of the market could be implied into a contract.19 Once If it can be shown that the custom is generally accepted by those involved in that business andin a particular place, that whereby if an outsider made normal inquiries, he would automatically become aware of the customary practice, such a personhe would be bound by that practiceA53.
This requires referencing please.
Implied Terms: Common Law
The final and most important sourceA54 of implied terms is the common law, whereby there are two categories of sources of common law. The first is known as terms which are implied in fact. – Tthis means that the court will imply a term into the contract where the court it is convinced that the term was an unexpressed intention of the parties. Such a form of implication occurs where it is deemed to be necessary in order to give the contract the business efficacy which the parties intended.20A55
In your opinion, or do you have some evidence to justify this being the most important? Remember you need to back up your arguments.
Can you engage with the case to show why the term must be necessary for business efficacy or so obvious that it goes without saying and reference commentary to in order to analyse the rule?
The second category is known as terms that are implied in law, which means that such terms could be implied into all contracts of a particular typeA56. Some examples include employment contracts, and general contracts concluded between landlords and tenantsA57. With regards to employment contracts then, one can note that there is the general implied term that the employee will serve the employer in a faithful manner, and that where he has engaged in wrongful acts, he will indemnify his employer.21 Traditionally, the court gives due regard to whether it is equitable to imply such terms into the contractA58, and whether it is fair to the parties.
A reference is missing here.
Again, references are missing for each part of the sentence here.
Is fairness alone enough to imply a term in law? Consider the test of necessity in Liverpool City Council v Irwin.
Conclusion
In summary, it has become clear that there are a few guiding principles on when a statement is considered to be a term, and when it is a mere representation. It must be remembered that no principle is conclusive, and the question of what is a term is one that almost always leads to a subjective answerA59. The relevant principles must be given due regard in the context of each and every case, rather than in a general manner. At the same time, TtheA60 paper has also shown that there are two main sources of contractual terms; – implied terms and express terms. Within express terms , sources of such terms include the parol evidence rule, the signature rule, incorporation of written terms and incorporation of terms based on a course of dealing. Sources of implied terms include terms implied by statute, terms implied by customary practices, and terms implied by principles of common lawA61.
You have drawn together your discussion in the first part of the paper. The test is objective. What would a reasonable person infer from the parties’ words and conduct?
I have suggested that you delete ‘at the same time’ simply because it suggests that the discussion about the sources of terms was conducted at the same time as the earlier discussion, which of course it was not.
Again, this is a succinct summary. Well done.
Bibliography
Table of CasesA62
You cite a very good number of cases in the bibliography and in the footnotes, so well done. You will note from my comments throughout your work though that it is essential that you engage with those cases in the body of the work itself, in order to improve your grade.
Allen v Pink (1838) 4 M & W 140
British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd [1975] QB 303
Chapleton v Barry UDC [1940] 1 KB 532
Couchman v Hill [1947] KB 554
Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623
Ecay v Godfrey (1947) 80 LI LR 286
Grogan v Robin Meredith Plant Hire [1996] CLC 1127
Heilbut, Symons & Co v Buckleton [1913] AC 30
Hutton v Warren (1836) 1 M & W 466
Jacobs v Batavia & General Plantations Trust Ltd [1924] 1 Ch 287
L’Estrange v F Graucob Ltd [1934] 2 KB 394
Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555
McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125
Olley v Marlborough Court Ltd [1949] 1 KB 532
Oscar Chess Ltd v Williams [1957] 1 WLR 370
Parker v South Eastern Railway (1877) 2 CPD 416
Schawel v Reade [1913] 2 IR 64
The Moorcock (1889) 14 PD 64
Table of Legislation
Sale of Goods Act 1979
Other SourcesA63
You will note from my comments throughout your work that I have often suggested you further engage with commentary. This is important not only to improve the analysis in the work which as I have noted, could be improved, but also to show that you have read widely. I would be expecting to see a good deal more than 2 secondary sources in a work of this length.
Andrews N, Contract Law (Cambridge University Press, 2015)
Poole J, Textbook on Contract Law (13th edn, Oxford University Press, 2017)
Footnotes
- J Poole, Textbook on Contract Law (13th edn, Oxford University Press, 2017) 217. ↩
- N Andrews, Contract Law (Cambridge University Press, 2015) 245. ↩
- Heilbut, Symons & Co v Buckleton [1913] AC 30. ↩
- Schawel v Reade [1913] 2 IR 64. ↩
- Ecay v Godfrey (1947) 80 LI LR 286. ↩
- Oscar Chess Ltd v Williams [1957] 1 WLR 370. ↩
- Couchman v Hill [1947] KB 554. ↩
- Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623. ↩
- Jacobs v Batavia & General Plantations Trust Ltd [1924] 1 Ch 287. ↩
- Allen v Pink (1838) 4 M & W 140. ↩
- L’Estrange v F Graucob Ltd [1934] 2 KB 394. ↩
- Grogan v Robin Meredith Plant Hire [1996] CLC 1127. ↩
- Olley v Marlborough Court Ltd [1949] 1 KB 532. ↩
- Chapleton v Barry UDC [1940] 1 KB 532. ↩
- Parker v South Eastern Railway (1877) 2 CPD 416. ↩
- McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125. ↩
- British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd [1975] QB 303. ↩
- Sale of Goods Act 1979. ↩
- Hutton v Warren (1836) 1 M & W 466. ↩
- The Moorcock (1889) 14 PD 64. ↩
- Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555. ↩
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A contract
underin law is known to be made of several terms; h– however, the terms in a contract doA1 not always denote everything that has been discussed during the negotiation of the contract.1 A principal distinction to be drawn here is that between atheA2 term of a contract, and what isA3alsoknown as a mere representationA4. ThisedistinctionA5hereis considered to be important because if a statement is considered to be a term, failure to adhere to it is a breach of contract, thereby potentially givingA6 the aggrieved party a remedy in law.2I have suggested that you replace the dash (or hyphen) with a semi-colon here. Although the dash was not itself incorrect, it sometimes a rather colloquial effect which is not appropriate in academic work.
‘the’ suggests that there is only one term in a contract, which of course there generally is not.
I have deleted the word also as the sentence read as if a representation could also be known as something other than this.
It would be prudent here to include a phrase at the beginning of the next sentence to make it clear that you will explain the distinction between terms and representations later in the work. If you do not do this, the point feels unreferenced.
I have recommended that you make this small alteration here to avoid repeating phrasing. This improves the readability of the work.
There may not always be a remedy available although you are right that there usually will be.