business: terms of contract
Part A
For a contract, it is necessary to decide what the parties have agreed, otherwise it is not possible to know whether the parties have done what they contracted to do. However, not all the statements made during negotiations are contractual terms. Therefore, here to discuss terms of the contract.
Terms of the contract
According to James (2010), the terms of the contract are the specific details of the agreement, including each party’s rights and obligations. Broadly speaking, there are two types of contractual term: express terms and implied terms.
Express terms of the contract
Express terms are those obligations and liabilities which the parties themselves create to form the basis of their relationship (Goldwasser, V 2007). That is to say, these are the terms the parties actually agreed and included in the contract.
Express terms may be in writing or agreed upon verbally. It is highly recommended to reduce a significant contract to writing so that all parties are clear about their rights and obligations. Where the contract is made orally, express terms are which actually used by the parties when entering into a contract.
Furthermore, there are two ways that a term becomes an express term of the contract:
1. in a signed written contract
According to L’Estrange v Graucob [1934] 2 KB 394, If a term in a written contract that has been signed by X, it is enforceable and legally binding, even if X has not read or understands the written contract. However, there are four circumstances when a signed contract may not unenforceable:
(1) ‘signed via lack of contractual capacity, a lack of consent or a lack of legality’. For example, Y agreed to purchase a car from X, but in fact, X intended to sell the car newly-painted whereas Y thought the car was new. The contract was void due to a lack of consent.
(2) ‘Cooling off periods’, this means that a contract may include an express or implied terms which allow one of the parties to change
For a contract, it is necessary to decide what the parties have agreed, otherwise it is not possible to know whether the parties have done what they contracted to do. However, not all the statements made during negotiations are contractual terms. Therefore, here to discuss terms of the contract.
Terms of the contract
According to James (2010), the terms of the contract are the specific details of the agreement, including each party’s rights and obligations. Broadly speaking, there are two types of contractual term: express terms and implied terms.
Express terms of the contract
Express terms are those obligations and liabilities which the parties themselves create to form the basis of their relationship (Goldwasser, V 2007). That is to say, these are the terms the parties actually agreed and included in the contract.
Express terms may be in writing or agreed upon verbally. It is highly recommended to reduce a significant contract to writing so that all parties are clear about their rights and obligations. Where the contract is made orally, express terms are which actually used by the parties when entering into a contract.
Furthermore, there are two ways that a term becomes an express term of the contract:
1. in a signed written contract
According to L’Estrange v Graucob [1934] 2 KB 394, If a term in a written contract that has been signed by X, it is enforceable and legally binding, even if X has not read or understands the written contract. However, there are four circumstances when a signed contract may not unenforceable:
(1) ‘signed via lack of contractual capacity, a lack of consent or a lack of legality’. For example, Y agreed to purchase a car from X, but in fact, X intended to sell the car newly-painted whereas Y thought the car was new. The contract was void due to a lack of consent.
(2) ‘Cooling off periods’, this means that a contract may include an express or implied terms which allow one of the parties to change