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Issue: Can Robin bring an action against Sarah for breach of express terms of the contract?

Express terms can be in written or oral. Sarah promises Robin that the contract of the new house will include curtains, blinds and window coverings. However, Robin realized that blinds, curtains and other window coverings were not provided in the new house. Signature rule The legal issue of signature rule applies in this case, since Robin signed a written contract. In a broad general rule, a person (Robin) who signs a document that has a contractual appearance about it is bound by the contents of the document whether he or she has read or understood the document(LEstrange v F Graucob Ltd). Therefore, the contract is valid and obviously Robin bounds with the contract. Parol evidence ORAL The court will presume the Parol Evidence Rule since Robin has signed the contract. The parol evidence rule prevents evidence not contained within a written contract from being added to, varying or contradicting the written document(British Movietonews Ltd v London & District Cinemas Ltd). Therefore, the courts judge the meaning of the document from the words of the document and not otherwise. Oral statement However, there is no rule which says an oral statement cannot become a term. In order to proof Sarahs oral statement is a term in the contract, the court examines the fact to determine whether the statement was promissory in nature. The reasonable bystander test is a guide in determining a statement was intended to be promissory(Oscar Chess Ltd v Williams).

William Li (23315015)

The reasonable Bystander test J J Savage and Sons Pty Ltd v Blakney


Was the representation included in a written document? ? The oral statement was not included in the written contract in this case. So it was less likely to be a term.


When in the negotiations was the representation made? ? In this case, the oral statement made several week before Robin signed the contract. Therefore, it was not likely to be a term. However, if Robin decided to sign the contract immediately, it would be a term as in the case of Van Den Esschert v Chappell.


Did the representation sound promissory? PROMISSORY? In this case, Sarah was warranting Robin. Thus, it sound promissory so more likely to be a term.


How objectively important is the representation to the overall deal? ? In this case, Robin would perhaps no otherwise sign the contract if Sarah did not make the statement. Therefore the oral statement was more likely to be a term.


Did either of the parties have special knowledge about the subject matter of the representation? special knowledge In this case, Sarah is a property developer which would have special knowledge about housing. Therefore, her statement is more likely to be a term.

Therefore, it is more likely to be a term of the main contract.

William Li (23315015)

By considering the importance of the representation, Sarahs promise was not seem as a term in the contract. It is significant that Sarahs promise was made in several weeks before Robin signs the contract and the oral statement was not included in the written contract. Moreover, if Robin thinks the curtains, blinds and window coverings is important to her new house, then she will absolutely read the contract carefully before she sign. However, if Sarahs oral statement becomes a term in a contract, Robin can sue Sarah and it is usual to claim for damages.

Collateral Warranties The oral promise made is not regarded as part of the contract but as collateral to it. There are 2 contracts: one for sale of the product and one containing the promise. The representation is promissory, therefore it is a collateral warranty ( JJ Savage v Blakney), and it does not contradict the main contract (Hoyts v Spencer).

Exclusion clause
Exclusion clause must bring to the notice at the time when the contract was made (Olley v Marlborough) In determining the exclusion clause, there are two questions to be asked: 1. Is the exclusion clause a term of a contract? (signed?) 2. What does the exemption clause mean? (loss, damages, injuries) There (is/is no) exclusion clause apparent in the fact at the time when both parties agreed to sign the contract. Therefore, _____(plaintiff) is bound by the exclusion clause. **if there is an exclusion clause** Limitation Clause _____(plaintiff) is bound to the limitation clause because he/she signed the contract.

William Li (23315015)

Remedies In order to determine the remedies, the court has to examine which term are the statements belong to and therefore has to establish, whether it is a condition, an innominate or intermediate term or a warranty. ( CONDITION) The term breached by ______(defendant) is a condition because it goes to the essence or heart of the contract; Therefore plaintiff is entitled to claim for the damages or terminate the contract (Tramways Advertising Pty Ltd v Luna Park Ltd). ( Breach of warranty) a warranty only allows the right to sue for damages. In this case, the curtains, blinds and window coverings are lesser importance which considered as warranty which breaches of warranty allow the injured party only to recover damages. Remoteness The damages must not be too remote (Hadley v Baxendale). In other words, damages must be considered as usual damages. There are two limbs to the remoteness rule including 1. The party in breach will be liable for losses which flow according to the usual course of things from the breach. 2. The party in breach is only liable for losses that were within the reasonable contemplation of the parties at the time the contract was made.

In other words, damages will only be awarded if the losses fall within one of these two limbs, which Sarah has obviously violated the second limb. Robin will absolutely not sign the contract with Sarah, if she knew the contract doesnt include the curtains, blinds and window coverings. Then Robin has right to claim the reasonable foreseeable damages.
William Li (23315015)

Conclusion Since Robin sign the contract, every term inside the contract is bound with her and cannot change or add anything in it. Sarah has no breach of express terms of the contract, because the reasonable bystander test applied to prove Sarahs oral misrepresentation worked mostly in favor of Sarah. Therefore, Robin cant sue Sarah for the breach of contract.

William Li (23315015)