Statements that govern the rights and obligations of parties concerned. They are the elements of the contract and are binding. If terms are broken there are legal consequences.

(1)

(2)

(3)



Terms

:



Statements that govern the rights and

obligations of parties concerned.



They are the elements of the contract and

are binding.



If terms are broken there are legal

(4)

In order to identify the terms of a contract,

one must analyze both express & implied

(5)



Terms that are explicitly included in the

contract –

Important to identify what the express terms

are.

(6)



Terms that will be read into the contract and

which were never the subject of express

agreement.



a term which has not been mentioned by

either party will nonetheless be ‘included’ in

the contract, often because the contract

doesn’t make commercial sense without that

(7)



Implied terms aren't written down

anywhere, but are understood to exist.



If there's nothing clearly agreed between

you and your employer about a particular

matter, then it may be covered by an

implied term. Terms are implied into a

(8)

 _A. Common Law

 Examples:

 Contract of service, if no price is fixed-a

reasonable price applied.

 If no time is fixed for performance of a contract-

(9)

Examples:

1. Ahmad enter into a contract of hire of a car, and in this contract, it will be implied term that he will exercise reasonable care in the use of the car.

2. Contract of employment- it will be implied that an employee will exercise the standard care expected of him.

 These terms though NOT expressly found in the

(10)

B. Statute

1) Sale of Goods Act 1979

 Section 12: the person selling the goods has to have

the legal right to sell them.

 Section 13: if you’re selling goods by description,

e.g. from a catalogue or newspaper advert, then the actual goods have to correspond to that description.

(11)

Section 14: the goods must be of “satisfactory quality” – that is, they should meet the standard that a reasonable person would regard as “satisfactory”. Also, if the buyer says they’re buying the goods for a particular purpose, there’s an implied term that the goods are fit for that purpose.

(12)



Hire Purchase Act 1967



implied conditions & warranties



Eg:

_{Implies a warranty that the hirer shall have}

and enjoy quite possession of the goods.

Section 7(1)(a).

 An implied condition that the owner shall have the right to sell the goods at the time when the

property is to pass.

(13)



National Land Code 1965



Tenancy agreements & leases

(14)



Not everything that’s said during the

negotiations for a contract end up being

actual terms of the contract; some

information only amounts to

(15)



Based on the intention of the parties.



Language used



Expertise / knowledge of the parties



Precision (ringkasan)of the statement

(16)

Example:

 you buy a car from a second-hand car dealer. He

tells you the car has alloy wheels. You buy it, but you later discover the wheels aren’t alloy, and

they’re starting to rust.

 If the car having alloy wheels was a term of the sale

contract, then clearly the dealer has breached the contract and you can sue him.

 But if it was just a representation, you might have

more difficulty suing him/ no legal effect.

 Remember, if it’s a term, the buyer always wins

(17)

Court held:

A statement that made by the D that the car was a 1958 model was a term of the contract.

In fact it was 1953 model.

(18)

 A term which is essential to contract; breach of

it would allow the other party to treat the contract as repudiated. (s. 12(2) SOGA)

 If the condition is breached, the party not in default entitled to repudiate the contract because the contract can be deemed to be

(19)

 A condition is a term or oral written which goes

directly 'to the root of the contract, or is so essential to its very nature that if it is broken,

the innocent party can treat the contract as discharged.

(20)

‘Warranty’ – a less vital term of a contract (collateral to the main purpose) , breach of it would give rise to a claim for damages, not a

right to discharge/reject the goods.

(s.12(3) SOGA)

If the warranty is breached, the party not in default is not entitled to repudiate the

contract because it is not voidable

HOWEVER

(21)

A warranty is a term of the contract which is

collateral or subsidiary to the main purpose of the contract.

It is therefore not so vital as to affect a discharge of the contract.

A breach of warranty only entitles the party to an action for damages; he cannot treat the contract

(22)

 Mrs. Poussardwas an opera singer. She agreed to sing in opera

on 28 November. However, , she became ill and was unable to sing until 4 December.

 The opera company had to hire another singer so that the

opera could start on 28 November. They could only get another singer if they hired her for all the performances of the opera.

 They did this and refused the services of Mrs Poussard once

she was better. Mrs. Poussard raised a court action, to try to make the company pay her.

the court held:

that Mrs. Poussard breached a Condition of the contract when she was unable to perform on 28 November. This was a basic

(23)

 Bettini was an opera singer. He agreed to sing in London in a number of theatres beginning on 30 March. He also agree that he would arrive in London 6 days before the first performance in order to practise. Bettini then, became ill and did not arrive in London until 3 days before the first performance. The opera company refused to allow him to sing and said he had breached the contract.

However, the court said:

the part of the agreement about practicing was a

(24)



Contracting party “ accept no responsibility”



Not responsible or liable for any loss or

damage or injury



Term of contract that:



Modify the principal obligation arises under

a contract



Limit or exclude the liability of the party

(25)



The A ordered paper board from a company

in New York and arranged their shipment for

consignment to the A at Penang on the R’s

ship.



The ship was due on Dec 25, 1973 but the

goods were not loaded on the ship but had

be put on another ship of R which arrived

on June 13, 1974.



The A then claimed from the R because of

(26)



The court:

Give effect to the exemption clause stated in

the bill of lading that “the carrier shall not

be liable for any loss or damage arising or

resulting from delayed or early arrival of the

goods and that any under or over carriage

shall not be considered a deviation

(27)



However , not applied on the case of

“fundamental breach” whereby the

party that seeking to rely on the

(28)

 Case of international carriage of goods by sea

 Any unjustifiable deviation involves the loss of

protection by any exemption clause contained in the contract.

 The vessel may not depart or deviate from the

(29)

 England/ UK:

 Unfair Contract Terms Act 1977

 Unfair Terms in Consumer Contracts Regulations

19991

- Limit the effectiveness of the EC in consumer

protection.

 Australia:

 Trade Practices Act 1974

 Victorian Goods (Sales & Leases) Act 1981

 South Australian Consumer Transactions Act 1971

(30)

 Malaysia?

-existing: SOGA 1957 (S.62) & HPA 1967 (S. 34) . -contract Act 1950- nil.

 Malaysian Parliament has passed the Consumer Protection

(Amendment) Bill 2010 (“the Bill”). -Section 1(3) of the Bill provides that the new Part IIIA applies to contracts entered into after the Bill comes into force. However, presently no indication

as to when the Bill will come into force.

 the Malaysian Parliament had opted to amend the existing

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