Contractual Terms

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Contractual Terms Works Cited Not Included Contractual terms are statements that form part of a contract. Parties to a contract will normally be bound to perform any promise that they have agreed to, and failure to perform this promises, or a unsatisfactory performance, may lead to an action for breach of contract. Some statements, however, do not form part of a contract, even though they might have led the other party into entering into the contract in the first place. These pre-contractual statements are known as representations. The consequence of such representations turning out to be false is an action for misrepresentation, not an action for breach of contract. The key consequence of this distinction is that each of these actions provides different remedies. It is important, therefore, to decide precisely what promises are included in the contract. Types of contractual terms Once it is decided that a statement is a term, rather than merely a pre-contractual representation, it is further necessary to decide which type of term it is, in order to determine what remedies are available for its breach. Terms can be classified as one of three types. (1) Conditions A condition is a fundamental part of the agreement - it is something which goes to the root of the contract. Breach of a condition gives the injured party the right... ... middle of paper ... .... (2) Terms implied by custom An agreement may be subject to customary terms, which do not have to be expressly stated by the parties. For example, in Hutton v. Warren (1836) it was held that customary usage permitted a farm tenant to claim an allowance for seed and labour on quitting his tenancy. Custom, however, cannot override the express terms of an agreement (Les Affreteurs v. Walford (1919)). (3) Terms implied by the Courts On occasion the Court will presume that the parties intended to include a term which is not expressly stated in the contract. The court will only do this where it is necessary to give business efficacy to the contract. Thus, in The Moorcock (1889) it was held that there was an implied warranty in the contract that a place of anchorage should be safe for a ship making use of it.

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