NATURE OF TERMS Whether expressed or implied, a term may take any one of the three natures. It may be a condition or warranty or an innominate term.

NATURE OF TERMS CONDITION WARRANTY A term which is clearly Vital to the main purpose of the contract. If Breached, the main purpose of the contract will be affected. A term is a warranty if it clearly less vital to main purpose of the contract. Its breach may cause loss to the injured party but will not affect the main purpose Of the contract. INNOMINATE TERMS These are terms that Can either be a Condition or Warranty depending On how important The term is to the Parties concern. The more important The term then it Is considered a condition

What is an Exclusion (Exemption) Clause? An exclusion clause is a term in the contract. The party who puts it in seeks to limit or totally exclude his liability in the event that he breaches the contract.

Why is Exclusion Clauses important in a contract? Exclusion clauses are important as if there is a breach of any of the terms covered by the exclusion clause the party relying on the clause is protected from any civil law suit against him. Example if there is a clause which protects the car park owners, if any person were to park the car and the car was damaged the owner of the car will not be able to sue, because of the exclusion clause.

How is an Exclusion (Exemption) clause made valid? 1.For exemption clause to be valid it must be made known to the other party before or at the time of contract. 2. If it is made known after the contract it is generally invalid unless there has been consistent dealing between the parties such that the court might implicate that there was implied notice in such circumstances. 3. If the exclusion clause is part of a written document it is automatically binding when the other party signs the document even if he has not read the exclusion clause.

In the form of a NOTICE IN THE FORM OF WRITTEN DOCUMENT The exclusion clause is in the form of an unsigned document, example a ticket or notice. The exclusion clause will be considered as valid if the other party knew or should reasonably have known of the existence of the exclusion clause. If the exclusion clause is contained in the document which is signed by the party seeking to resist the exclusion clause, the Courts will regard it as being part of the contract. This is because he is deemed to have read, understood and agreed to the terms in the document, including the exclusion clause.

Olley v Malborough Court – what happened?

L’Strange v Graucob – what happened? I should have read the fine print before signing the document. Now I am bound by what I signed!

1.Vitiating factors are defects in a contractual agreement. 2. When there is a vitiating factor it interferes with the proper functioning of a contract. 3. Example of vitiating factors are misrepresentation, mistakes in contract, duress and undue influences and if the contract becomes illegal.

Question: What is a void contract? A void contract means that the contract is invalid. This would require the parties to this contract be put back to the original position. Example, if Rambo bought a pen and it turn out that this pen cannot write, he can return the pen and get his money back. This means the contract for the purchase of the pen is null and void.

Question: What is a voidable contract? If a contract is considered to be voidable, it means that it can be made void or the parties may re-negotiate on different terms. Example, if I get a contractor to put blue marble flooring, and the contractor mistakenly, put green marble flooring – which is the wrong colour, I could make the contract voidable. This means that I can either reject the green marble flooring and ask the contractor to redo the flooring or I could accept the green marble flooring for a different price. If I choose the latter, then the contract is deemed as voidable.

MIS- REPRESENTATION Must be statement of fact not opinion One party must have misled the other party Silence does not amount to misrepresentation except in some situations The statement must be false. Statement must have induced the party to enter into a contract

Types of misrepresentation FRAUDULENT MISREPRESENTATION NEGLIGENT MISREPRESENTATION INNOCENT MISREPRESENTATION In each case the contract is voidable