The Terms of a Contract

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The Terms of a Contract The terms of a contract identify the rights and obligations of each party under that contract. A contract is merely a collection of terms – duties and rights and penalties, some of which may be in writing and some of which may be oral. Terms create contractual obligations for breach of which an action lies. Terms may be either express or implied. Express terms. Express terms are those which are specifically agreed by the parties. Implied terms. Implied terms are those which form part of the contract but they have not been specifically agreed between the parties during the negotiations for that contract. Terms may be implied into the contract in a number of ways;- Terms implied through custom and practice. Perhaps a most obvious example here would be the fact that contracts in the baking industry that make reference to the term ‘dozen’ may actually mean thirteen rather than twelve as that is a custom within that industry. “It has long been settled that, in commercial transactions, extrinsic evidence of custom and usage is admissible to annex incidents to written contract, in matters with respect to which they are silent… and this has been done upon the principle of presumption that, in such transactions, the parties did not mean to express in writing the whole of the contract by which they intended to be bound, but a contract with reference to those known usages.” (Baron Parke – Hutton v Warren (1836) 1 M&W 466) British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd (1975) 1 ALL ER 1059. Both parties were engaged in the business of hiring out he... ... middle of paper ... ...the phrase "shall be entitled to repudiate the contract" or in some other sense as in Wickman v Schuler. The next question is whether the breach of the relevant term creates a right to repudiate. This may arise either from statute or as the result of judicial decision on particular contractual terms e.g. the "expected ready to load stipulation" in The Mihailis Angelos where the courts have decided that breach will ipso facto give rise to a right on the other party to repudiate. In these two classes of cases the consequences of the breach are irrelevant or, more accurately, are assumed to go to the root of the contract. There remains the non-specific class where the events produced by the breach are such that it is reasonable to describe the breach as going to the root of the contract and so justifying the repudiation."

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