This is an extract of our Intro To Commercial Contracts document, which we sell as part of our International Commercial Law Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.
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INTRO TO COMMERCIAL CONTRACTS CONTRACT TYPES
INTRODUCTION TO COMMERCIAL CONTRACTS
1. Upstream? provide client with resources to carry on business
2. Downstream? contracts under which client passes on + exploits fruits of labour;FORMATION
TERMS AND REPRESENTATI ONS
BATTLE OF THE FORMS STANDARD TERMS AND CONDITIONS
contracts for supply of goods and services by business One party must make identifiable offer (aot invitation to treat), showing intention to be bound
? Ads, estimates, brochures, price lists, enquiries / RRIs, LoIs/ HoTs/MoUs;
anything marked 'subject to contract' ?NOT usually offers Offer can be ended by rejection, counter-offer, lapse of time, death or revocation Other party must accept terms unconditionally or counter-offer Terms of acceptance must be 'mirror image' of offer / counter-offer Must be supported by consideration; may be small but cannot be past performance of existing duty
? Parties must be specific about terms; if fails to address key area (price), will be void for uncertainty
? Courts may fix badly drafted contract if clause severable or parties' intention clear
? Courts will not enforce 'agreement to agree'
? 'Lock-out' agreements enforceable; 'lock-in' agreements not
? Three types of pre-contractual statement: terms, representations and 'mere advertising puff'
? Last will have no effect on contract
? Terms will form part of contract; breach may entitle party to terminate contract and sue for damages
? Representation is statement of fact which induces contract; false statement is misrepresentation
? 3 types: innocent, negligent, fraudulent; primary remedy is rescission but damages possible under Misrepresentation Act 1967, s. 2(1); test is whether maker honestly believed statement was true and had rble grounds for belief
? Occurs when both parties are attempting to impose their standard terms on the other
? Courts apply 'last shot wins' doctrine
? Traditional offer / acceptance model, not relationship / conduct of parties (Tekdata Interconnections)
? Use of standard terms ensures contract suits needs of whichever party has been able to insist on use
? Buyer will want to ensure that: (i) The goods to be delivered are on time, preferably to own premises; and (ii) S to be liable for any defects.
? The seller will want to ensure that: (i) They have flexibility for late delivery if it is to be let down by its own suppliers; (ii) B preferably collects the goods from its factory; and (iii) They are not liable for every trivial problem (will usually accept some liability for defects).??
Advantages of standard terms
? Contract on favourable terms to client;
? Standardised procedures;
? Commercial certainty;
? Starting point for negotiation??
Disadvantages of standard terms Lack of flexibility; Effective training and procedures essential; Incorporation difficulties/ 'battle of the forms'. Need for regular review;
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