What is the difference between implied and express terms?
Express terms are explicitly stated promises in a contract, while implied terms are not expressly included but are necessary to give effect to the parties’ intention.
What are express terms?
A provision of a contract that states a promise explicitly, such as price, quantity, and warranties associated with the product.
What are implied terms?
A provision that’s not expressly included in a contract but that is necessary to give effect to the parties’ intention.
Why is it important for essential terms of a contract to be expressed?
So that each party knows its obligations and the obligations of the other side.
What is the role of judges in determining implied terms?
Judges may imply terms to make the contract workable based on the intentions of the parties.
What is the plain meaning rule in contract interpretation?
Interpreting the words of a contract as a reasonable person would, considering the surrounding circumstances.
What is the policy rationale for construing ambiguous terms against the drafter?
The drafter should bear the risk of unclear language.
True or False: Courts will set aside a contract for uncertainty if some meaning can be assigned to a vague term.
False.
What is the factual matrix in contract interpretation?
The background facts known to the parties when the contract was concluded.
What does the entire contract clause signify?
It indicates that the contract is complete as written and prevents courts from implying additional terms.
What is the doctrine of business efficacy?
It allows judges to imply terms necessary to make contracts workable.
What is an example of an implied term based on established custom?
Terms that are presumed to be included in a contract based on notorious customs in the trade.
What is the burden of proof in the case of implied terms?
The plaintiff must demonstrate the existence of the implied term based on the balance of probabilities.
What is contractual quantum meruit?
Awarding one party a reasonable sum for goods or services provided under a contract.
What does the parol evidence rule limit?
It limits the evidence a party can introduce concerning the contents of a contract when the written contract is clear.
What must parties ensure before agreeing to a written contract?
Inclusion of all important terms.
True or False: The parol evidence rule applies when the contract is intended to be partly oral and partly in writing.
False.
Under what circumstances can evidence outside the written contract be allowed?
When there’s an alleged problem in the formation of the contract or when the language is ambiguous.
What is the significance of the Uniform Electronic Evidence Act (UEEA)?
It provides a uniform set of rules for proving electronic contracts.
What is the doctrine of frustration in contract law?
It may relieve parties from their obligations under a contract due to unforeseen circumstances.
What are conditional agreements?
Agreements that incur contractual obligations only under certain circumstances.
What should parties do to manage risks associated with changed circumstances?
Evaluate risks, avoid inflexible commitments, and include flexible clauses in contracts.
What happens if a customer refuses a price variation clause?
The supplier must choose to risk adverse market changes, negotiate a higher price, or lose the order.
What are the consequences of not including important terms in a contract?
It may lead to enforcement issues under the parol evidence rule.
