The terms of a contract can be used to protect the respective parties. The purchaser of a chocolate bar is entitled to assume that the chocolate inside the wrapper is edible, that the flavours advertised on the wrapper are reflected in the taste, that the chocolate bar is not stale etc. So how do contractual terms protect the parties?
Even if these terms are not expressly set out in the contract (which may very well be the case if the contract is agreed orally), the law will ‘imply’ certain terms into the contract. ‘Imply’ for these purposes means that the contract ‘is to be treated as including’ certain terms (even if it does not expressly do so). Examples of such implied terms are set out below.
1. The product must conform with its description
- If the packaging describes a certain product, then there is an implied contractual term that the contents of the packaging will contain that product. If this is not the case (e.g. a bottle labelled ‘shampoo’ actually turns out to contain toothpaste) then the supplier has breached this ‘implied’ contractual term.
2. The product is of satisfactory quality
- The meaning of ‘satisfactory’ will depend, for instance, on the description applied to the product (e.g. ‘luxury’, ‘basic’, ‘shatterproof’) and the price paid for that product (you would generally expect more expensive products to be of a higher quality). The goods must essentially be free from defects and fit for the purpose for which products of that description are commonly supplied.
- For instance, there is an implied contractual term that a chocolate bar should be edible; a new computer should have a reasonable battery life, run at a reasonable speed and work with the internet; a table should not spontaneously collapse etc.
Parties can (and often do in more complex commercial transactions) negotiate more precise terms and expressly include these in the contract. Parties may specify particular payment methods, delivery dates or alterations to products (e.g. upgrading a computer hard drive or shortening the sleeves of a shirt) in the contract.
Parties may also specify a special purpose that the product must serve. For instance, if a party purchases a swimming pool primarily for the purpose of diving off of a 10 metre high diving board, that party can specify that the pool must be 5 metres deep or ‘sufficiently deep to dive into head first off of a 10 metre diving board’. Such terms would not necessarily be implied by law, as the law will generally only imply that products are fit for the purposes for which they are commonly supplied (and swimming pools are commonly supplied for swimming, not diving into off of 10 metre high diving boards).
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By Jake Schogger - City Career Series