Business Laws Assignment: Contract Terms, Conditions, and Exclusion

This business law assignment analyzes a scenario involving a contract for the sale of shoes, addressing several key legal issues. The assignment first examines whether a statement about the shoes being all-natural leather constitutes a term of the contract or a representation, considering factors like expertise of parties, time of incorporation, and the parole evidence rule. It then delves into the concept of implied terms, specifically whether the use of vegan leather without synthetic materials was an implied term in the contract. The assignment proceeds to differentiate between conditions and warranties, determining whether the color of the shoe soles is a condition or warranty, based on its importance to the contract. Finally, it evaluates the validity and effect of an exclusion clause in limiting the seller's liability, considering whether the clause was properly incorporated and its clarity in relation to the disputed term. The analysis draws on relevant case law to support its conclusions.

Running head: BUSINESS LAWS
Business Laws
Name of the student
Name of the university
Author note

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BUSINESS LAWS
Answer 1
Issue
Whether the leather being all natural is a term of the contract or not
Rule
The contents of an agreement are known as a clause or a term. There are various terms present in
a contract. The primary terms of the contract include the price, the subject matter such as the
description of goods and services.
Statements which are made in relation to negotiation of an agreement can be a representation or a
contractual term. The remedy and appropriate cause of action would only be determined if it is
known that a clause is a representation or a contractual term. In case there is a breach of
contractual term a claim form breach of contract can be brought by the aggrieved party. On the
other hand if a term is a representation which was not true the party can make a claim for
misrepresentation.
For the purpose of deciding a clause is a term or a representation four factors are looked into by
the courts.
1. Expertise of parties
2. Time of incorporation
3. Importance of the clause
4. The parole evidence rule

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BUSINESS LAWS
In the case of Oscar Chess v Williams1 it was provided by the court that if the representor has
more expertise the clause is a term of contract, whereas of the Representee has more expertise
the term is a representation.
In the case of Ecay v Godfrey2 it was held by the court that where the importance of the
statement has been indicated by the person to whom the representation is made the statement is a
term of the contract.
In the case of Routledge v Mckay3 it was ruled by the court that if a long time has elapsed
since the statement was made and the contract was formed it would be considered as a
representation.
Where there is a written contract only the terms which have been incorporated are considered as
contractual terms as stated in the case of
Application
In this case the importance of the statement had been notified by Peter to Cobbler suppliers by
stating that many vegan clients are conscious environmentally.
Not much time had elapsed between the telephone conversation when the statement was made
and the email where the contract was formed as it was done the same of the afternoon.
Both the parties have same expertise in relation to the subject matter of the letter
1 [1957] 1 WLR 370
2 [1947] 80 Lloyds Rep 286
3 [1954] 1 WLR 615

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BUSINESS LAWS
However as the contract have been done in writing online and it does not contain the statement
related to vegan leather as per the parole evidence rule it would not be a term of the contract but
a representation
Conclusion
The statement is a representation and not a contractual term
Answer 2
Issue
Was it an implied term that there would be vegan leather used to make the shoes and without any
synthetic material
Rule
An expressed term is a contract which is clearly stated in the contract and has been agreed upon
by the parties to the contract expressly as provided in the case of Wilson v Best Travel [1993] 1
All ER 353.
An implied term is a term of the contract which is not expressly agreed by the parties to it but is
added to the contract by statutory provisions and the courts.
In the case of The Moorcock4 it has been provided by the court that an implied term is only
added by the court when the court finds such term to be necessary for the continuation of the
contract. This means that any reasonable person would know that such term is obviously present
in the contract.
4 (1889) 14 PD 64

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BUSINESS LAWS
In the case of Shirlaw v Southern Foundries5 it was ruled by the court that an implied term
cannot be added to the contract by the court merely because it is fair or just to do so. It is not the
role of the court to determine whether a contract is just or not.
In the case of Liverpool City Council v Irwin6 the court ruled that in order to be an implied
term the law must specify that it is necessary to be incorporated to protect the weaker party
Application
In the given circumstances it was not mentioned by Samantha while ordering for the shoes that
she has allergy from synthetic colorings and therefore needs shoes which do not contain
synthetic tint ACS.
Therefore the term was not communicated to Peter and it would not be regarded as an expressed
term. as discussed in the rules above an implied term is only added if it is a custom of the trade
being carried out or the court finds its obvious and necessary for carrying out the contract.
However in this case the term that that there would be vegan leather used to make the shoes and
without any synthetic material cannot be an implied term as it is not obvious and necessary for
the continuation of contract as no such information has been provided upon the formation of
contract and although the term may have been fair or just but it cannot be implied term of the
contract.
Conclusion
The term that there would be vegan leather used to make the shoes and without any synthetic
material is not an implied term of the contract
5 [1939] 2 KB 206
6 [1977] AC 239

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BUSINESS LAWS
Answer 3
Issue
Whether the term related to the color of the shoes is a condition or warranty of the contract
Rules
A condition as provided through the landmark case of Poussard v Spiers7 is a term which is
fundamental to the formation of the contract. This means that the actual formation of the contract
between the parties have been formed because the parties had the intention to abide by such
terms. In case it is found that a party fails to abide by the condition in a contract such as the price
and goods and services description the contract can be ended without any obligation by the
aggrieved party
A warranty as provided by the famous case of Bettini v Gye8 is a term which forms the subject
matter of the contract. However a warranty is not the base of the contract formation between the
parties. A warranty is analyzed by the court based on the importance of such term to the contract.
Violation of warranties only gives right to damages
Application
In this case Geoffrey has clearly provided Peter that he intends to buy shoes having size 13 along
with white rubber soles. As such description was clearly provided by Geoffrey to peter while
purchasing the shoes it can be said that the requirements were very important to him and without
white soles he would have not got into the contract for purchase of shoes. Therefore it can be
said that the color of the soles is a condition of the contract.
7 (1876) 1 QBD 410
8 1876 QBD 183

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BUSINESS LAWS
Conclusions
Color of the sneaker soles in a condition of the contract
Answer 4
Issue
Whether the exclusion clause can limit the liability of peter in relation to the color of the shoe
soles
Rule
An exclusion clause is a term of the contract which is incorporated into it to enable the
incorporator to evade a liability with respect to the contract
An exclusion clause can be incorporated by a party to the contract by either signature or brining
such clause to the notice of the other party before the contract is formed as stated in the case of
thornton v shoe lane parking ltd9. However if the party does not bring the clause to the notice
of the other party the clause is not valid as stated in the case of Curtis V Chemical Cleaning
Co10. Further an exclusion clause cannot be incorporated to evade a liability imposed by law
In case a exclusion clause does not have a certain meaning or has an ambiguous nature the court
would provide meaning to such clause in a way that it would benefit the party who has not
incorporated the clause into the contract as per- Baldry V Marshall11.
Application
9 (1971) 2 qb 163
10 [1951] 1 KB 805
11 [1925] 1 KB 260

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BUSINESS LAWS
In this case the clause was displaced at the place where the customers were handled by peter.
Thus the caluse was reasonably brought to the notice of Geoffrey before he went into the
contract to purchase the shoes. Thus as per Curtis case the clause was incorporated into the
contract properly as it was notified before the formation of the contract. The clause has been
incorporated to restrict a contractual liability and not legal so it is valid.
However the clause which has been incorporated by peter is not certain. This can be said that
there is no certainty to whether a term is a condition or a warranty and is decided by the court of
law. The clause therefore being unclear as per the principles of Marshall Case will be interpreted
in such a way as to favor Geoffrey and not Peter. This suggests that the term would be as far as
possible treated as a condition which has also been discussed in the previous section. The clause
is not valid in case of a condition. This it cannot restrict peters liability.
Conclusions
Liability of peter in relation to the contract cannot be restricted by such clause