This chapter discusses the terms of a contract. It first examines the distinction between a ‘term’ and a ‘representation’, before considering how those terms can be incorporated into a contract. It then discusses the nature of the contract being examined—even if the relevant term is not to be found in the ‘main’ contract, it may be found in a ‘collateral’, or ancillary, contract. Finally, the chapter addresses the ‘parol evidence rule’, which essentially states that where there is a written contract, extrinsic evidence cannot be used to establish other terms. This rule is riddled with exceptions and often dismissed, although it is suggested that it should not be entirely discarded.
Chapter
11. Identifying the terms of a contract
Chapter
7. Terms of the contract I
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines issues related to the terms of the contract. It explains the distinction between terms and mere representations, and analyses the difference between signed and unsigned contracts in relation to the incorporation of express terms, including the L’Estrange v Graucob case. This chapter also considers the parol evidence rule and the modern contextual approaches to contractual interpretation. Finally, it considers implied terms, which can be implied by statute or by the courts, including the difference between implied terms in fact and at law, and introduces the developing concept of a relational contract.
Chapter
7. Terms of the contract I
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter examines issues related to the terms of the contract. It explains the distinction between terms and mere representations, and analyses the difference between signed and unsigned contracts in relation to the incorporation of express terms, including the L’Estrange v Graucob case. This chapter also considers the parol evidence rule and the modern contextual approach to contractual interpretation. Finally it considers implied terms, which can be implied by statute or by the courts, including the difference between implied terms in fact and at law, and introduces the developing concept of a relational contract.
Chapter
5. Content of the contract and principles of interpretation
Robert Merkin KC, Séverine Saintier, and Jill Poole
Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines what the parties to a contract have undertaken to do; that is, the terms of the contract, and the principles determining how the courts interpret the meaning of those contractual terms. It considers whether pre-contractual statements are terms or mere representations. The chapter then turns to written contracts, focusing on the parol evidence rule, entire agreement clauses, and the effect of signature on the contractual document. It also discusses oral contracts and incorporation of written terms in such contracts by means of signature, reasonable notice, consistent course of dealing, and common knowledge of the parties. In addition to express terms, this chapter looks at how terms are implied, particularly terms implied by the courts—terms implied in law and terms implied in fact. There is discussion of the typical implied terms in sale and supply contracts in the B2B and B2C context. Finally, this chapter focuses on the principles governing the interpretation of contractual terms.
Chapter
7. The terms of the contract
This chapter focuses on the actual content or terms of a contract. It discusses the two main classifications of contractual terms, namely express and implied terms, and considers the courts’ approach in the determining when terms should be implied into a contract. It explains that express terms are those specifically agreed upon by the parties while implied terms are those that may be implied by the court, statute, or custom. This chapter also explains how some implied terms can be excluded via an express provision and discusses the parol evidence rule, collateral contract, and entire agreement clause. The chapter concludes by looking at the principles established by the courts when interpreting contractual provisions.
Chapter
5. Content of the contract and principles of interpretation
Robert Merkin KC, Séverine Saintier, and Jill Poole
Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. This chapter explores how the terms of the parties’ agreement (that is, the contractual promise to be performed) are identified and how the courts interpret the meaning of those terms. It considers the status of statements made prior to the conclusion of the contract (as terms or representations) and why this matters. The parol evidence rule applies where the contract is written and provides that the writing represents the entire contract. This definition is flawed, however, because it allows the rule to be sidestepped by defining the contract as partly written and partly oral. Alternatively, an oral term can take effect as a collateral contract, which is separate to any written contract to which the parol evidence rule applies. The effect of the parol evidence rules can be achieved by incorporating an entire agreement clause. This chapter also considers the effect and impact of a no oral modification clause (or NOM). This chapter examines methods of achieving incorporation of terms such as signature, reasonable notice (or a higher standard of notice if the term is onerous or unusual), consistent course of dealing and common knowledge of the parties. In addition to the express terms, there may be terms implied by custom, by courts or by statute. Finally, the chapter considers the principles on which contracts are interpreted including the relevance, or otherwise, of pre-contractual negotiations.
