Law of Contract – 3.2 Contents of a Contract (Cambridge IGCSE/A‑Level)
3.2.1 Express Terms
Express terms are the promises that the parties have actually said or written into the agreement. They form the “bargain” of the contract.
Representation vs Term
Representation: a statement of fact intended to induce the other party to contract. If false it gives rise only to a claim for mis‑representation (e.g. Smith v. Hughes).
Term: a promise that becomes part of the contract. Breach gives rise to contractual remedies.
Courts decide whether a statement is a term by looking at:
The importance of the statement to the parties;
Whether the parties intended it to be contractual;
The timing of the statement (see Oscar Chess Ltd v. Williams).
Incorporation of Express Terms
Method of Incorporation
Requirement
Key Authority
By signature
The term is incorporated once the party signs the document, even if they have not read it.
L’Estrange v. Graucob
By notice (before or at the time of contracting)
The term must be brought to the other party’s attention before the contract is concluded.
Spurling Ltd v. Bradshaw
By course of dealing or trade usage
Term is incorporated when it is a well‑known, regular practice in the relevant trade.
Hollins v. Vickers
Parol Evidence Rule
If a contract is reduced to writing, prior or contemporaneous oral statements cannot be used to vary, add to or contradict the written terms (Joscelyne v. Nissen).
Exceptions:
Evidence of a term omitted by mistake;
Evidence of a collateral contract;
Evidence of a term implied by law, custom or trade usage.
3.2.2 Implied Terms
Implied terms are not expressly agreed but become part of the contract by operation of law, custom, or the parties’ conduct.
Sources of Implied Terms
Source
Typical Content (Illustrative)
Key Authority / Statute
Statute – Consumer Rights Act 2015 (CRA 2015)
Goods: satisfactory quality, fit for any disclosed purpose, as described.
Services: performed with reasonable care and skill; within a reasonable time.
CRA 2015 ss 9‑11 (goods); ss 49, 52 (services)
Common Law
Terms necessary to give the contract business efficacy; duties of mutual trust in employment.
The Moorcock; Shirlaw v. Southern Foundries
Custom & Trade Usage
Terms regularly observed in a particular trade (e.g. “delivery within 30 days” in textiles).
Hollins v. Vickers
Reasonable Expectations
Terms a reasonable person would expect in the circumstances (e.g. safety of a product).
British Westinghouse v. Underground
Remedies for Breach of Implied Terms (CRA 2015)
Goods: right to reject (within 30 days), repair, replacement, price reduction, or damages (ss 20‑24).
Services: repeat performance, price reduction, damages, or termination where the breach is serious (ss 55‑56).
Exclusion of liability for negligence is valid only if “reasonable”.
s 2
Exclusion of liability for breach of contract is subject to the reasonableness test.
s 3
Exclusion of liability for death or personal injury caused by negligence is void.
s 11
Reasonableness is assessed on the parties’ bargaining positions and the availability of alternatives.
Statutory Controls – Consumer Rights Act 2015 (Consumer Contracts)
Section
Key Provision
s 2
Terms must be transparent and expressed in plain, intelligible language.
s 31
Unfair terms that create a significant imbalance to the consumer’s detriment are unenforceable.
s 57
Exclusion of liability for death or personal injury caused by negligence is void.
s 62
Terms that limit the consumer’s statutory rights (e.g., right to reject faulty goods) are ineffective.
s 65
Terms that impose a disproportionate burden on the consumer (e.g., excessive fees for exercising a right) are unfair.
s 68
Courts may assess the fairness of a term at any time, not only at the point of contract formation.
Applying the Reasonableness Test (Checklist)
Was the clause brought to the consumer’s (or weaker party’s) attention before or at the time of contracting?
Is the wording clear, unambiguous and expressed in plain language?
Does the clause create a significant imbalance to the party’s rights?
Is there a genuine disparity in bargaining power?
Would a court consider the clause “reasonable” in the surrounding circumstances?
3.2.5 Summary Checklist – Contents of a Contract
Identify all express terms and decide whether any statements are merely representations.
Check that each express term has been properly incorporated (signature, notice, or trade usage) and that the parol evidence rule does not bar reliance on it.
List implied terms that apply:
Statutory (CRA 2015 – goods s 9‑11; services s 49‑52)
Classify each term as a condition, warranty, or innominate term and note the appropriate remedy for breach.
Identify any exemption or limitation clauses and assess:
Incorporation and clarity (contra‑proferentem).
Compliance with UCTA 1977 for B2B contracts.
Compliance with CRA 2015 for consumer contracts.
Reflect on the overarching policy aims – freedom of contract, justice, morality, and effectiveness – when evaluating the fairness of the contract’s content.
Suggested diagram: Flowchart of “Contents of a Contract” – starting with Express Terms (representation vs term, incorporation, parol evidence), branching to Implied Terms (statutory, common law, custom, expectations), then to Classification of Terms (condition, warranty, innominate), and finally to Exemption Clause Controls (common‑law rules → UCTA 1977 → CRA 2015).