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Org 43 CHAPTER 3 – LAW OF CONTRACT: TERMS SOURCES OF THE TERMS SOURCES OF TERMS EXPRESS IMPLIED By statute By courts eg Equal Pay Act 1970 ie such terms as are necessitated by the legal nature of the contract 1. custom 2. usage 3. to give business efficacy ● in law ● in fact ie looking at the surrounding facts, such terms as are so obvious that the parties did not bother to express them eg The Moorcock (contract for the harbouring of a ship – term implied that it must be a safe harbour) A further note re express terms Not everything expressed by the parties amounts to a term, some are merely representations.

Foakes v Beer [1884] Four exceptions: 1. Where there is accord and satisfaction between the debtor and the creditor, the debt is discharged. ● accord (ie agreement) must be freely entered into D & C Builders v Rees (builder not bound by agreement to accept smaller sum offered by Mrs Rees because she said “take this or you’ll get nothing”, knowing he was in desperate need of immediate funds to stave off bankruptcy). ● satisfaction (ie consideration) egs D & C Builders v Rees (payment by cheque no benefit vis-à-vis cash).

Express anticipatory breach occurs where a party actually states that he will not be performing his contractual obligations – Hochster v De La Tour. Implied anticipatory breach occurs where a party carries out some act which makes performance impossible – Omnium Enterprises v Sutherland. When anticipatory breach takes place the innocent party can sue for damages immediately on receipt of the notification of the other party’s intention to repudiate the contract, without waiting for the actual contractual date of performance as in Hochster v De La Tour.

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