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Contract: Terms

Evaluating the law on contract terms

  • 3 things to know
  • A2 Units 3 and 4

Overview

Case for retaining the rule that a signature binds and case for separating the consumer regime from the business regime.

What you need to know

Answer each one before you reveal it.

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Key term

State the case for retaining the rule that a signature binds.

Key term

State the case for separating the consumer regime from the business regime.

Key term

Does the reasonableness test give parties enough guidance? Argue both ways.

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    State the main criticism of the rule in L'Estrange v Graucob (1934).

    Model answer

    It binds a party to terms they have never read in a document they had no realistic chance to negotiate, which treats a signature as proof of an agreement that in truth was never reached about those terms.

  2. 2

    State the case for retaining the rule that a signature binds.

    Model answer

    A signature is the clearest possible outward sign of assent, and if it could be questioned no written contract would be secure, since either side could later claim not to have read what they signed.

  3. 3

    Assess the certainty of the requirement of reasonable notice.

    Model answer

    The requirement lets a court respond to how surprising and how burdensome a particular clause is, but the standard is inherently uncertain because nobody can say in advance how much notice a given term will need.

  4. 4

    Assess the innominate term as a development of the law.

    Model answer

    It produces a fairer result by matching the remedy to the seriousness of the actual breach, but it costs the certainty that commercial parties value, which is why courts still treat time clauses in shipping contracts as conditions.

  5. 5

    State one criticism of having two separate statutory regimes for unfair terms.

    Model answer

    A business must apply different tests depending on whether it is contracting with a consumer or another business, and a small trader can find itself outside consumer protection while having no more real bargaining power than a consumer.

  6. 6

    State the case for separating the consumer regime from the business regime.

    Model answer

    A consumer needs protection that does not depend on litigating a reasonableness test, while businesses need the freedom to allocate risk and price it, so a single rule would either over protect one group or under protect the other.

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Law Making in Wales and the UK
Delegated Legislation
Statutory Interpretation
Judicial Precedent

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Roles v Nathan ( ).
196319411945

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AThe defendant owed the victim a duty of care and breached it.
BThe breach carried a reasonably foreseeable risk of death.
CThe breach caused the death.

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Pecuniary loss is financial and measurable.
TrueFalse

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