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Unit 21 P4 P5 D1 The meaning of and effects of terms in a standard form contract and the evaluation of the effectiveness of terms in a given contract£6.48
For P4 and P5, the chosen contract can then be translated into everyday language. Each learner should use a different contract as this will go some way to ensure authenticity of work. Selected terms will then be considered in the light of the relevant statutory protection. This should be the signif...
Introduction
In this task I am required to describe the meaning of the terms within a
standard form contract. I will also explain the effect that these terms have
on a contract.
O2 Mobile phone contract
Types of terms in a standard form contract
The terms of the contract are the things that bind parties to perform
certain actions under the contract.
- The express term
- The implied term
The express term
Express terms are terms that have been made by parties by word of
mouth or in writing and the parties intend that the terms will create the
essential part of the contract. These terms can be classified as either
warranties or conditions.
Conditions
A condition is a key part of an agreement and forms the source of a
contract. For example, in the mobile phone contract, one of the main
conditions of the contract would be for the seller to supply the mobile
phone. If both parties agree to the transaction of the mobile phone but
instead a remote control is supplied, there would be a breach of contract.
The breach of this condition would allow the injured party to treat the
contract as if it is invalid and make a claim for damages.
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, Warranties
A warranty is not as important as the conditions of the contract as it does
not form the source of the contract. If there is a breach of the warranty,
the injured party would only be granted rights to claim damages and the
contract as a whole cannot be rejected. For example, a customer agrees
with the mobile phone salesperson that the iPhone will be sold with iPhone
5 headphones. The customer’s phone arrives; therefore the salesperson
has completed the main condition of supplying the phone. Although, the
customer receives Samsung headphones instead of iPhone 5 headphones.
The headphones are not a crucial aspect of the contract so they will be
seen as a warranty. This failure does not allow the contract to be voided
completely.
The implied term
Implied terms aren’t stated within a contract but they are introduced into
the contract by statute, custom and common law.
Terms implied by statute
Terms are implied into a contract by virtue of legislation in order to protect
parties. An example of this is the Sale of Goods Act 1979 which is implied
by statute into contracts for the sale of goods. In every contract for the
sale of goods there will be the following terms implied according to the
act.
The goods that are sold are in an acceptable condition and are fit for
the particular purpose.
Where there’s a sale of goods by description there is an implied
condition that the goods will match the description.
Every seller is entitled to sell goods.
There is an implied condition that the bulk order will match with the
sample in sample sales.
Terms implied by custom
An agreement would be subject to customary terms that have not actually
been specified by the parties. The terms could be historical which would
mean that the person making the contract should attempt to find out if
any of the specific terms are still in existence. Any express clause would
be able to overrule such a custom.
Terms implied by common law
Courts are able to imply a term into the contract in order to authorise the
clear intentions of the parties. It may be a point that has not been clearly
stated by the parties or a point that has been completely ignored. In
situations such as this, the court would imply the common law term in the
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