The Terms of a Contract Essay

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The Terms of a Contract The terms of a contract identify the rights and obligations of each party under that contract. A contract is merely a collection of terms – duties and rights and penalties, some of which may be in writing and some of which may be oral. Terms create contractual obligations for breach of which an action lies. Terms may be either express or implied. Express terms. Express terms are those which are specifically agreed by the parties. Implied terms. Implied terms are those which form part of the contract but they have not been specifically agreed between the parties during the negotiations for that contract. Terms may be implied into the…show more content…
One clause stated that the hirer was liable to indemnify the owner against all expenses in connection with the use of the crane. The crane sank in marshy ground with neither party to blame. The hirers claimed that the clause was inapplicable because it had been communicated after the contract had been made and thus was not incorporated into the contract. (b) Terms implied by statute. Perhaps the most common example of terms being implied by statute is provided by the Sale of Goods Act 1979. The provisions contained within s.12-15 relating to title, sale by description, satisfactory quality, fitness for purpose and sale by sample are implied into every contract for the sale of goods where the seller sells in the course of business. (c) Terms implied in fact. Terms may be implied because the very nature of the contract requires it or because the application of an objective test makes it apparent that the parties must have intended it. It may be that its omission was a simple mistake or that both parties thought it so obvious that it did not need to be stated. What is important is to ascertain the intention of the parties and the courts have developed two overlapping tests – the officious bystander test and the business efficacy

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