Terms — express, implied, interpretation

CON.04 — Terms: Express, Implied, Interpretation

Term or representation?

A statement is a term (breach gives a contractual remedy) or a mere representation (only a misrepresentation claim). Factors: timing, importance attached, special knowledge/skill of the maker, and whether the statement was reduced to writing.

• Routledge v McKay — long gap before contract suggested representation.
• Oscar Chess v Williams (private seller, no special knowledge → representation) vs Dick Bentley v Harold Smith (dealer's skill → term).

Incorporation of express terms

• Signature: bound even if unread (L'Estrange v Graucob), unless misrepresented (Curtis v Chemical Cleaning).
• Notice: reasonable steps before/at contracting; the more onerous the clause, the greater the notice needed (Interfoto "red hand" rule; Thornton v Shoe Lane — ticket from machine, too late).
• Course of dealing: consistent prior dealings (Hollier — too few/inconsistent failed).
• Parol evidence rule: written contract presumed complete; rebuttable by collateral contract or partly-oral contracts.

Implied terms

• By fact (to give business efficacy / officious bystander; The Moorcock; Marks & Spencer v BNP Paribas — strict necessity test, NOT reasonableness).
• By law (incidents of a contract type, e.g. landlord/tenant: Liverpool CC v Irwin).
• By statute — Sale of Goods Act 1979 (B2B/private: s.12 title, s.13 description, s.14 satisfactory quality & fitness for purpose, s.15 sample). Consumer Rights Act 2015 governs B2C: s.9 satisfactory quality, s.10 fitness, s.11 description, s.49 reasonable care/skill in services. Do not cite SGA for consumers — that is a classic trap.

Classification & interpretation

• Condition (breach → terminate + damages), warranty (damages only), innominate term (remedy depends on seriousness of consequences — Hong Kong Fir). Time clauses in commercial sales often conditions (The Mihalis Angelos).
• Construction: objective, contextual, business-common-sense approach (Investors Compensation Scheme; Rainy Sky; Arnold v Britton — but clear words prevail over commercial common sense; Wood v Capita — iterative).

Common traps

• Term vs representation drives the whole remedy route.
• Innominate terms ≠ automatic right to terminate.
• CRA 2015 for consumers, SGA 1979 for non-consumers.
• Implied-in-fact = necessity, never mere reasonableness.