The contents of the contract

(This lecture is divided into 2 parts)

Seminar 1:

1. Distinction between representations and terms

2. Remedies for pre-contractual statements

2.1. Misrepresentation

2.2. Collateral contract

2.3. Negligent misstatement

2.4. Conclusion on pre-contractual statements

3. Express terms

3.1. Incorporation

3.2. Construction

3.3. “Purposive” or “commercial” interpretation

3.4 Conditions, warranties and innominate terms

Seminar 2:

4. Implied terms

4.1. Terms implied by the courts

4.2. Terms implied by custom

4.3. Terms implied in fact

4.4. The Moorcock test & The “officious bystander” test

4.5. Terms implied by law

4.6. Terms implied by statute

4.7. Implied terms under the Sale of Goods Act

4.1 Introduction

This lecture is concerned with the situation where the parties have fulfilled all the requirements for making a valid contract. It may then become necessary to determine exactly what the obligations are under the contract. Problems may arise in a number of ways. There may perhaps, have been a lengthy period of pre-contractual negotiation, and it may not be clear which, if any, of the statements which were made at that stage were intended to form part of the contract. The contract may be in writing, and yet one of the parties may allege that it does not truly represent their intentions. In this case the job of the court will be to «construe» the contract in order to decide what the language which it contains should be taken to mean. The task of «interpreting» or «constructing» the contract is likely to be influenced by the surrounding circumstances, including the relative bargaining powers of the parties. Such a contextual approach would be easier if the courts adopted a «relational» approach to construction. This would enable them to take a broad view of the commercial and personal factors surrounding the agreement, both at the time it was made and as it has developed. Under the classical theory, the courts are limited to matters which may help them to decide what they think that the parties actually meant at the time the agreement was made.

The process of construing a written contract can also in some circumstances be constrained by statutory regulation.

In other situations, the contract may be purely verbal, in which case there may be a dispute as to what was said or promised, and by whom. The problems here are likely to be mainly evidential and so outside the scope of the Contract Law course. Nevertheless, issues of construction may arise here in a similar way to written contracts.

Some of the problems in deciding what the terms of a contract are may be resolved by the rules which the courts have developed to enable terms to be implied into a contract. Moreover, in certain situations, terms will be implied by statute, irrespective of the wishes or intentions of the parties.

The order of treatment adopted here is to look first at the question of pre-contractual statements, and the remedies that may be available for them. Secondly, the approach to express terms and their interpretation will be discussed. Finally, the rules relating to the implication of terms, both at common law and by statute, will be considered.