Fishfingers Ltd has a contract with a supplier of cod. When the contract was set up it was not known how important specific delivery times would be for the arrival of the fish. After several months it has now become apparent that delivering the fish within 3 hours of them being caught is fundamental to the contract as delayed delivery results in poorer quality Fish Fingers. When the contract was set up what was the delivery times?
An Innominate Term is the correct answer. At the time the contract was written, we didn’t know how important the delivery time was – therefore it wasn’t a condition or a warranty- it was an innominate term. An innominate term is a term that is difficult to classify at the time of drafting a contract. A time is of the essence clause would be a good thing to include in this contract now that we know how important the delivery times are. For more information on Conditions, Warranties and Innominate Terms see p. 43
Dianne has a loan agreement which contains a clause for default. What does a clause for default imply?
A Clause for Default ‘allows the lender to demand full payment of the outstanding balance’. See p.102. And always read the small print before you sign a loan agreement 🙂
Fruity McFruitFace is an exporter of fruit. Which of the following payment terms would be most advantageous for it?
Exporters prefer advance payment – this puts the risk with the importer / buyer. There’s a table of these four terms on p.36. An importer would prefer an open account arrangements. The other two options are in the middle and the risk is more equally split between the two parties.
Which of the following would not be considered acceptance of a contract term?
Silence is not acceptance. Acceptance can be in writing, verbal or implied by conduct. The three other options are ways in which a contract could be accepted by conduct. See p.8 of the study guide
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