Question 1

What was the reason for the decision in the case of De Lassalle v Guildford [1901] 2 KB 215?

Accepted Answer

The decision in De Lassalle v Guildford was based on the fact that the oral statement was considered promissory and enforceable as a collateral contract, meaning it was intended to have legal effect alongside the main contract.

Question 2

In the case of a written contract, the courts assume that the intention of the parties is contained within the 'four corners' of the contract.

Accepted Answer

This means that the court will primarily look at the language of the contract itself to determine the parties' intentions, rather than considering outside evidence such as conversations or other documents.

Question 3

In the case of an oral contract, the intention of the parties cannot be proved.

Accepted Answer

The intention of the parties can be proved through evidence such as witness testimony, emails, text messages, and other forms of communication or conduct that suggest an agreement was made. However, oral contracts can be more difficult to prove compared to written contracts where the terms are clearly stated in a document.

Question 4

If a collateral contract is inconsistent with an exclusion clause in the main contract, the collateral contract will prevail.

Accepted Answer

This is because a collateral contract is a separate agreement made outside of the main contract, and it can modify or supplement the terms of the main contract. Hence, if there is a conflict between a collateral contract and an exclusion clause in the main contract, the collateral contract will take precedence.

Question 5

Explain how the courts decide between a mere representation and a term.

Accepted Answer

The answer of Explain how the courts decide between a...

Question 6

Which of the following statements is the best description of an 'innominate term'?

Accepted Answer

An 'innominate term' is a term in a contract that cannot be classified as either a condition or a warranty until after a breach has occurred, at which point the seriousness of the breach and its effects are assessed to determine the appropriate remedy.

Question 7

When is a particular statement more likely to be a term of the contract rather than a mere representation?

Accepted Answer

The answer of When is a particular statement more likely...

Question 8

If one of the parties had a specific skill or knowledge with regard to the subject matter of the contract, then a statement is probably a term.

Accepted Answer

If one party has a specific skill or knowledge related to the subject matter of the contract, then any statement made regarding that skill or knowledge would likely be considered a term of the contract rather than mere representation.

Question 9

Which of the following statements is the best description of a 'condition'?

Accepted Answer

A 'condition' is an essential term in a contract, the non-performance of which allows the innocent party to rescind the contract and/or claim damages. Options A, C, and D describe other types of terms in a contract.

Question 10

What was the reason for the decision in the case of Hoyts Pty Ltd v Spencer (1919) 27 CLR 133?

Accepted Answer

The answer of What was the reason for the decision...

Question 11

Which of the following statements is incorrect?

Accepted Answer

A representation that induces a party to enter into a contract does not automatically become a term of that contract. Whether a statement is considered a term or a representation depends on factors such as the importance of the statement to the parties, the timing of the statement, and whether the statement was included in the written contract.

Question 12

Which of the following statements is the best description of a 'warranty'?

Accepted Answer

A warranty is considered a less important term in a contract, where its non-performance allows the affected party to claim damages but does not entitle them to terminate the contract altogether.

Question 13

Which of the exceptions to the parol evidence rule is illustrated by the case of Van Den Esschert v Chappell [1960] WAR 114?

Accepted Answer

In Van Den Esschert v Chappell [1960] WAR 114, the court was of the opinion that the written document (a lease agreement) contained only part of the agreement and therefore allowed parol evidence to supplement the terms of the lease. This falls under the exception to the parol evidence rule where the court finds that the written document does not contain the entire agreement.

Question 14

Why was the statement found not to be a term in the case of: Oscar Chess v Williams [1957] 1 All ER 325?

Accepted Answer

The statement found not to be a term in the case of Oscar Chess v Williams [1957] 1 All ER 325 was because the plaintiff buyer had special skills or knowledge in relation to the subject matter. Therefore, the statement was not considered a term but rather a mere representation.

Question 15

The question of whether a statement is a term or a representation depends on the actual intention of the parties.

Accepted Answer

The answer of The question of whether a statement is...

Question 16

Which of the following statements is the best description of the 'Parol evidence rule'?

Accepted Answer

The parol evidence rule states that a court will not admit evidence of the actions and words of the parties that add to, vary or contradict a written agreement. This means that if there is a written contract, the court will only look at the terms of the contract and will not consider any other evidence that seeks to modify or add to the terms of the contract.

Question 17

In order to establish that a collateral contract exists, it is necessary to show that the person making the statement intended it to be acted upon and that the person, to whom the statement was made, relied upon the statement.

Accepted Answer

This is the general test for the existence of a collateral contract, also known as a separate contract made at the same time as the main contract but not incorporated into it. Both elements of intention to be acted upon and reliance on the statement must be present.

Question 18

What was the reason for the decision in the case of J J Savage and Sons Pty Ltd v Blakney (1970) 44 ALJR 123?

Accepted Answer

The answer of What was the reason for the decision...

Question 19

Which of the following is NOT necessary for a pre-contractual statement to be enforceable as a collateral contract?

Accepted Answer

While a pre-contractual statement being in writing may provide strong evidence for its existence, it is not necessary for a pre-contractual statement to be enforceable as a collateral contract. The other factors listed (consistency with the main contract, reliance by the plaintiff, and not being a term of the main contract) are necessary for a pre-contractual statement to be enforceable as a collateral contract.

Question 20

What is the court's rationale for distinguishing between 'representations' and 'terms'? Do you agree with this rationale?

Accepted Answer

The answer of What is the court's rationale for distinguishing...

Quiz 14: Terms of the Contract

What was the reason for the decision in the case of De Lassalle v Guildford [1901] 2 KB 215?

In the case of a written contract, the courts assume that the intention of the parties is contained within the 'four corners' of the contract.

In the case of an oral contract, the intention of the parties cannot be proved.

If a collateral contract is inconsistent with an exclusion clause in the main contract, the collateral contract will prevail.

Explain how the courts decide between a mere representation and a term.

Which of the following statements is the best description of an 'innominate term'?

When is a particular statement more likely to be a term of the contract rather than a mere representation?

If one of the parties had a specific skill or knowledge with regard to the subject matter of the contract, then a statement is probably a term.

Which of the following statements is the best description of a 'condition'?

What was the reason for the decision in the case of Hoyts Pty Ltd v Spencer (1919) 27 CLR 133?

Which of the following statements is incorrect?

Which of the following statements is the best description of a 'warranty'?

Which of the exceptions to the parol evidence rule is illustrated by the case of Van Den Esschert v Chappell [1960] WAR 114?

Why was the statement found not to be a term in the case of: Oscar Chess v Williams [1957] 1 All ER 325?

The question of whether a statement is a term or a representation depends on the actual intention of the parties.

Which of the following statements is the best description of the 'Parol evidence rule'?

In order to establish that a collateral contract exists, it is necessary to show that the person making the statement intended it to be acted upon and that the person, to whom the statement was made, relied upon the statement.

What was the reason for the decision in the case of J J Savage and Sons Pty Ltd v Blakney (1970) 44 ALJR 123?

Which of the following is NOT necessary for a pre-contractual statement to be enforceable as a collateral contract?

What is the court's rationale for distinguishing between 'representations' and 'terms'? Do you agree with this rationale?