Terms of a contract:

The terms of the contract are the specific details of the agreement, including each party’s rights and obligations.

（Term和representation的区别：a term contains a promise and therefore has promissory effect, whereas a representation does not involve a promise.）

Express terms明示条款

Express term can be either in writing or oral.

If a particular term has not been consciously acknowledged and agreed to by

a party, it will still be an express term binding upon that party if:

1. the term is in a written contract signed by the party, or

- See: L’Estrange v Graucob (1934)

2. the term was brought to the attention of the party by reasonable notice before the contract was formed.

- See: Thornton v Shoe Lane Parking (1971)

Once it is established that a particular statement is an express term, Courts then determine the importance parties may have attached to them. Conditions and Warranties一旦确认是明示术语，法院就会确定当事人对其可

能的重视程度

1. Conditions – major terms of the contract.

A breach will entitle the innocent party to rescind (terminate终止) the contract and sue for damages.

See: Poussard v Spiers (1876)

2. Warranties – minor terms of the contract.

A breach will entitle the parties to sue for damages.

See: Bettini v Gye (1876)

3. Third Type (Intermediate) – hybrid混合term that is capable of being a

condition or a warranty.

See: Koompathoo v Sanpine (2007)

To determine whether a term is a condition or a warranty, the courts apply the test of essentiality.判断是条件还是保证

See: Associated Newspapers v Bancks (1951)

例子：Online Contracts: Clickwrap and Browsewrap

Implied terms 暗示条款

The court will imply a particular term into a contract if all of the following requirements are satisfied.

1. The term is reasonable and fair.

2. The term is necessary to make the contract viable.

3. The term is so obvious that it ‘goes without saying’.

See: Codelfa v State (1982)

4. The term can be clearly expressed.

5. The term is consistent with the express terms.

The Parol Evidence Rule

Issue1: Is the verbal promise by Tommy a term of the contract?

Law：If the contract is in writing it is very difficult to establish that a verbal representation or promise made during negotiations was intended to become a term of the contract.

According to the Parol Evidence Rule:

-When the contract is in writing, it is presumed that the writing contains all terms of it

-If there is an inconsistency between a written term and a verbal representation/promise, the court will favour the writted term

and disregard the verbal representation/promise.

-No other evidence may be admitted to vary or add to the terms of the written contract.

See: Mercantile Bank of Sydney v Taylor

However, there are a number of exceptions to the P.E.R:

The parol evidence rule applies only if the written contract appears to be a complete record of the agreement.

1.If the verbal representation was intended to be part of the contract.

-See: Van den Esschert v Chappell (1960); before signing the contract, Van Den Esschert made a false promise to Chappell

that the house was free from any infestation of white ants.The court

decided that the parol evidence rule did not apply. The written

contract made no reference at all to white ants, so the complete

agreement consisted of the written contract plus the verbal

assurance.

2.Implied Terms

3.Collateral Contracts

Application

In this case, there is written contract between Tommy and Sophia. By applying the Parol Evidence Rule, what Tommy promised to Sophie was not included in the term of the contract, so the court will favour the written term