Once the formation of a contract has been established, the next issue to deal with is the content of the contract. What are the parties’ respective rights and obligations under the contract? In practice, this is an extremely important issue for the parties. This chapter deals with the approach of the courts to mapping the precise rights and obligations of the parties. In doing this, the following issues become relevant:
194Is a pre-contractual statement intended to be a term of the contract? This involves distinguishing between representations and terms, and identifying the factors, such as the importance of the issue, which help the courts to make a decision.
Remedies for pre-contractual statements. Where a statement is not part of the main contract, the party to whom it was made may nevertheless have a remedy on the basis of a collateral contract or for misrepresentation.
Express terms (terms put forward by one or more of the parties). The courts need to consider (for example):
if a term has been put forward in writing but not in a signed document, has it actually been incorporated into the contract?;
the precise meaning of a term – this will generally only arise where the term is ambiguous. Today the courts adopt a ‘purposive’ interpretation, taking account of the commercial context where appropriate.
Implied terms (terms arising by implication). There are two main bases on which terms may be implied:
Common law. Courts will normally only imply terms which are ‘necessary’, or as a matter of policy in particular types of contract (for example, landlord and tenant).
Statute. The main examples of statutorily implied terms are those contained, for non-consumer contracts, in the Sale of Goods Act 1979, relating mainly to the quality of goods. For consumer contracts, similar terms are included in the relevant contract by virtue of the Consumer Rights Act 2015.
Statutory controls. In relation to consumer contracts, the terms of an agreement must comply with the requirements of the Consumer Rights Act 2015 on ‘unfair’ terms.