CONTENT OF

CONTRACTS:
EXPRESS
TERMS

Dr Nuhu Yidana
 Distinguish between express
terms and representations

Apply tests used by courts to

LEARNING identify terms
OUTCOMES
Explain routes and limits of
incorporation of terms

Understand the parol evidence

rule and its exceptions
 An express term is a
contractual promise
agreed by the parties.

EXPRESS
Can be written or oral;
TERMS: forms part of the
DEFINITION enforceable agreement.

Breach gives rise to

contractual remedies.
 Pre-contractual
statement inducing a
party to contract.

REPRESENTATIONS:
DEFINITION Not intended to be
binding; remedy lies in
misrepresentation.

Test: intention to
create legal obligation
at time of statement.
 Facts: Buyer asked if hops
treated with sulphur;
seller assured they
weren’t.

BANNERMAN
V WHITE Decision: Statement was a
term due to importance
(1861) placed by buyer.

Rationale: Intention and

reliance indicated binding
promise.
 Facts: Oral statement on
motorcycle age; written
contract silent.

ROUTLEDGE
Decision: Representation
V MCKAY only; written document
(1954) excluded oral statement.

Rationale: Timing gap and

written finality negated
intention to contractually
bind.
 Facts: Private seller sold
car described as 1948
model; actually older.

OSCAR
Decision: Representation,
CHESS V not term; seller lacked
WILLIAMS expertise.

(1957)
Rationale: Courts
consider relative
knowledge of parties.
DICK BENTLEY PRODUCTIONS V
HAROLD SMITH MOTORS (1965)

• Facts: Dealer stated the car had done 20,000 miles since
the replacement engine.
• Decision: Statement was term; dealer had greater expertise.
• Rationale: Expertise and inducement made it contractual.
 Facts: Seller said boat
was sound but advised
buyer to verify.

ECAY V
Decision:
GODFREY Representation, not
(1947) term.

Rationale: Seller’s
caution indicated no
intention to guarantee.
SUMMARY TEST FOR
DISTINGUISHING

• Timing and importance of statement (Bannerman).

• Relative expertise (Oscar Chess, Dick Bentley).
• Reliance and intention (Routledge).
 • Why should the law distinguish between
terms and representations?
DISCUSSION
PROMPT
• Is the distinction fair to consumers?
 Methods:
Signature
Reasonable Notice
Course of Dealing
INCORPORATION Trade Custom
OF TERMS – Online incorporation.
OVERVIEW

Principle: Reasonable notice is

required before or at the time
of contract formation.
INCORPORATION BY SIGNATURE

• L’Estrange v Graucob [1934]

• Facts: Buyer signed a contract containing an exclusion
clause (small print).
• Decision: Signature binds, even if unread.

• Rationale: Objective consent via signature; exceptions –

fraud or misrepresentation.
INCORPORATION BY SIGNATURE
• Curtis v Chemical and Dyeing (1951)
• Ratio: Misrepresentation can override parol evidence rule

• Do-Buy 925 Ltd v National Westminster Bank plc [2010] EWHC 2862 (QB))
• Ratio: only in extreme cases that the court would depart from the usual
rule that a person who signs a document is bound by its terms, including
those incorporated by reference (website), whether they have read them or
not
INCORPORATION BY REASONABLE NOTICE

(a) (tickets, receipts, common form docs, etc)

• Parker v South Eastern Railway (1877)

• Facts: Read casebook/case report
• CA; per Mellish LJ;
• Test: (1) A person receiving the ticket who did not see or know that there was any
writing on the ticket will not be bound by the conditions.
Test: (2) A person who knows there was writing, and knows or believes that the
writing contained conditions, is bound by the conditions.
• Test: (3) A person who knows that there was writing on the ticket but does not know
or believe that the writing contained conditions, will nevertheless be bound where the
delivery of the ticket, in such a manner that the writing on it could be seen, is
reasonable notice that the writing contained conditions.
 INCORPORATION BY REASONABLE NOTICE

• Third of Parker’s rules most frequently applied and most difficult:

• Thompson v LM & S Railway Co [1930]
• CA: Held that a ticket ‘Issued subject to the conditions and regulations in
the company’s timetables and notices’ was sufficient
• Ratio: ticket reference to the timetables and advertisements is sufficient
• Richardson, Spence & Co v Rowntree [1894]
• Ratio: a folded ticket on which conditions were obliterated by a red ink
stamp was not capable to incorporate terms into the contract, even if
the defendant knew the ticket contained writing, but did not know that it
contained conditions – no reasonably sufficient notice
• White v Blackmore [1972]
• Ratio: if no reference on the face of the ticket to conditions on the
reverse, such notification is defective
 INCORPORATION BY REASONABLE NOTICE

(B) Notice must be exhibited in a contractual document

Olley v Marlborough Court Hotel (1949)

• Ratio: notice must be contemporaneous with the contract

• Chapelton v Barry UDC (1940)

• C hired a deckchair and received a ticket from the attendant
• Sustained injury from the Chair
• Ticket exempts Council for any accident or damage arising from the hire of
the chair

• Held: (CA) a mere receipt for payment (which came too late), not a
contractual document

• Ratio: the exclusion clause must be contained in or referred to in something

that can be regarded as a contractual document
 INCORPORATION BY REASONABLE NOTICE

(c) Websites

• Impala Warehousing and Logistics (Shanghai) Co Ltd v Wanxiang

Resources (Singapore) PTE Ltd [2015] EWHC 25 (Comm)
• Ratio: reference in a contractual document to a website may well be
sufficient to incorporate the standard terms found on that website

• Parker-Grennan v Camelot [2024] EWCA Civ 185

• Facts: Online lottery terms accessible via hyperlink; claimant argued

unfairness.

• Decision: Terms incorporated; reasonable steps taken by Camelot.

• Rationale: No fixed rule requiring clickwrap; depends on adequacy of notice.

 UNUSUAL / ONEROUS TERMS

Spurling v Bradshaw Thornton v Shoe Lane

(1956) Interfoto Picture Library
Parking Ltd [1971]
Ltd v Stiletto Visual
Facts: orange juice spoiled, Facts: casebook/case reports Programmes Ltd [1989]
and Brashaw sued. Ratio: before an onerous
term, restrictive of statutory Facts: Read casebook/case
rights, can be excluded, there reports – transparencies
Ratio: Denning LJ: I quite must be some indication that (£3783.50)
agree that the more would lead an ordinary person
unreasonable a clause is, the to realise, at or before the Ratio: Same approach taken
greater the notice which time of making the contract, in Interfoto as in Thornton;
must be given of it. Some that a term of that sort where the term is
clauses which I have seen [relating to personal injury] particularly onerous, it must
would need to be printed in was sought to be included be shown that it was brought
red ink on the face of the The nature and scope of the to the attention of the other
document, with a red hand attempted exclusion a relevant party
pointing to it, before the factor; not merely procedural
notice could be held to be
sufficient.
PREVIOUS COURSE OF DEALINGS

Kendall (Henry) & Sons v Lillico (William) & Sons Ltd [1969]
• Facts: Buyers and sellers of animal feed for 3 years; 100s of contracts.
• Ratio: incorporated by a consistent course of dealing
• McCutcheon v David MacBrayne Ltd [1964]
Facts: shipped goods on defendant’s ships. Sometimes signed “Risk Note”. A
car was shipped and lost, but nothing was signed
Held: not incorporated - No consistent course of conduct/dealing
• Hollier v Rambler Motors (AMC) Ltd [1972]
• Facts: refer to casebook/case report
• Ratio: consistency of dealing shows that standard terms have been
incorporated based on consent
•
PARTIES TRADE PRACTICE

• British Crane Hire v Ipswich Plant Hire [1975]

• Facts: Standard industry conditions not expressly
mentioned.
• Decision: Terms implied; both parties familiar with trade
practice.
• Rationale: Common understanding within trade sufficed for
incorporation.
• Ratio: Custom can be incorporated when proven to exist
and has broad acceptance
THE ‘PAROL EVIDENCE’ RULE

• General rule that where there is a written contract parties

cannot bring ‘parol evidence’ purporting to vary the contract
(Jacobs v Batavia & General Plantations Trust Ltd [1924] 1 Ch
287).
• Aims to provide certainty in terms of what has been agreed.
• Allowing parol evidence may also create general uncertainty.
• But various exceptions to this rule.
• So many exceptions that not much remains of the rule…
THE ‘PAROL EVIDENCE’ RULE -
EXCEPTIONS
Where it is not intended that written agreement contains the whole of
the agreement

Allen v Pink (1838) 4 M & W 140):

• Verbal warranty was provided in relation to sale of a horse that horse
was “…a quiet worker, and would go well in spare harness”.
• Horse turned out to be “vicious and unruly.”
• Held that verbal warranty was intended to form part of the contract.
THE ‘PAROL EVIDENCE’ RULE -
EXCEPTIONS
Terms that must be implied into the contract

Gillespie Bros & Co v Cheney, Eggar & Co [1896] 2 QB 59:

• Contract for sale of coal

• Written contract did not set out purpose for which coal was being used.
• But buyers had made sellers aware of purpose for which coal was being
used.
• Held that evidence of what had taken place between parties before
entering the contract was admissible.
THE ‘PAROL EVIDENCE’ RULE -
EXCEPTIONS
Gillespie Bros & Co v Cheney, Eggar & Co [1896] 2 QB 59:

“…although when the parties arrive at a definite written

contract the implication or presumption is very strong that such
contract is intended to contain all the terms of their bargain, it is
a presumption only, and it is open to either of the parties to
allege there was, in addition to what appears in the written
agreement, an antecedent express stipulation not intended by the
parties to be excluded, but intended to continue in force with
the express written agreement”. (Lord Russell at 62)
THE ‘PAROL EVIDENCE’ RULE -
EXCEPTIONS
Parol evidence permitted to prove a custom which must be
implied into the contract

Hutton v Warren (1836) 150 E.R. 517:

Stipulation in a lease of farmland did not disapply a custom
whereby on quitting a farm a tenant farmer was entitled to
receive a reasonable allowance for seeds and labour bestowed
on land during the last year of the tenancy from either the
landlord or the incoming tenant.
THE ‘PAROL EVIDENCE’ RULE -
EXCEPTIONS
To show that contract has not yet come into effect or that it is
no longer in operation

Pym v Campbell (1856) 6 El. & Bl. 370:

• Parties entered into written contract for sale of share in a
patent.
• Agreed orally that patent would not become effective until it
had been examined by a third party.
• Parol evidence of this was admitted.
THE ‘PAROL EVIDENCE’ RULE -
EXCEPTIONS
To prove the existence of a collateral agreement

City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129):

• Defendant had rented shop from landlord for 6 years and had slept in
annex to the shop (with landlord’s knowledge).
• Upon lease renewal landlords inserted clause stipulating that use of
shop to be limited to “showrooms, workrooms and offices only”.
• Landlord gave tenant verbal assurance that he could continue to sleep
at premises if he signed the lease renewal.
THE ‘PAROL EVIDENCE’ RULE -
EXCEPTIONS
City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129):
• Tenant proceeded to sign a renewal
• Landlord then attempted to forfeit the lease due to the tenant
sleeping at the premises.
• Held that promise not to enforce use clause against tenant
was a collateral contract that could be used as a defence.

Note that parol evidence is also admissible in cases of

misrepresentation, fraud, mistake or non est factum (Campbell
Discount Co v Gall [1961] 1 QB 431).
ENTIRE AGREEMENT CLAUSES

• Sometimes contract may contain an ‘entire agreement clause’.

• Confirms that contract contains the entirety of the agreement
between parties i.e. aims to exclude parol evidence.
• So prevents parties from using most exceptions to ‘parol evidence’
rule.
• Where an entire agreement clause is used, parties unlikely to be able
to rely on collateral warranties.
• Whether an entire agreement clause is effective to exclude parol
evidence in respect of misrepresentations depends on the precise
wording of the clause in question (see Axa Sun Life Services plc v
Campbell Martin Ltd [2011] EWCA Civ 133, [2011] 2 Lloyd’s Rep 1).
 SUMMARY
• Important to distinguish between terms and representations as terms are
incorporated into the contract, representations are not.
• Parties generally bound by signature.
• Exceptionally, the defence of non est factum may be available.
• Notice of term must be given before or at the point that the contract is entered
into.
• Terms must be contained within a document intended to have a contractual
effect.

• Reasonable steps must be taken to draw a particularly onerous term to the

attention of the other party.
• Terms can be incorporated into a contract by a course of dealing.
• General rule that ‘parol evidence’ not permitted.
• Various exceptions to the general rule.