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Solution for Business Law 3rd Edition Chapter 6, Problem 1

by Nickolas James
128 Solutions 13 Chapters 13468 Studied ISBN: 9780730305743 Business Law 5 (1)

Chapter 6, Problem 1 : 1.Ash agrees to buy Stephen’s car. She meets...

1.Ash agrees to buy Stephen’s car. She meets Stephen at his house where she hands over a bank cheque in exchange for the transfer papers and the keys to the car. When she gets into the car she discovers that there is no fuel in the fuel tank. When she asks Stephen about this he explains that he only agreed to sell her the car, not fuel as well. Has Stephen breached the contract?

 

Step-By-Step Solution

See Business Lawpp289-291.

 

Issue

Has Stephen breached an implied term of the contract?

 

Law

An implied term is a term that was not necessarily discussed or negotiated by the parties, but is nevertheless a term of the contract.

The court will be willing to imply a term into a contract if it is:

reasonable and fair,

necessary to make the contract viable,

so obvious that it ‘goes without saying’,

able to be clearly expressed, and

consistent with the express terms.

The court applies the ‘officious bystander test’: if a bystander had been present during the negotiations between the parties, and had asked the parties whether such a term was a term of the contract, the parties would have replied ‘yes, of course’.

 

Application

A term that the car will contain at least some petrol:

(is/is not) reasonable and fair because …

(is/is not) necessary to make the contract viable because …

(is/is not) so obvious that it ‘goes without saying’ because …

(is/is not) able to be clearly expressed because …

(is/is not) consistent with the express terms because …

 

Conclusion

Stephen (has/has not) breached an implied term of the contract.

 

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