Term of a contract
A promise, statement or stipulation which forms part of the contract (e.g. the price, delivery date, condition of the goods) which is definite and an important factor for the parties when deciding whether to enter into the contract. Terms can be conditions , warranties or innominate terms . If a term of the contract is breached (broken), the other party is entitled to damages and may also be entitled to rescission . In deciding what the terms of a contract are, the court will look at:
• the contract itself, where it is a written contract (see also non est factum and parol evidence rule );
• other written terms referred to in a written contract which were intended to be part of the contract and were brought to the attention of the parties before the contract was made;
• terms in previous contracts, where the parties have frequently done business before (see also course of dealing );
• negotiations before the contract was made, where there is an oral contract; the points made during negotiations can be mere puffs , representations or terms.
They are more likely to be terms if they were made immediately before the contract was agreed, the person making them had special knowledge of the subject and assured the other party they were true, and they were key to persuading the other party to make the contract;
• statute: terms are implied into every consumer contract ;
• custom: terms that are normal in that trade or market place will be implied into the contract;
• what the parties must have intended when they made the contract (see also officious bystander test );
• what courts have recognised in past cases as standard terms; this applies particularly to landlord and tenant contracts and employment contracts.