Exam 10: The Interpretation of Contracts

Michael Products Limited and Jensen Corporation enter into an agreement under which Michael Products Limited agrees to supply 20 tonnes of soap to Jensen Corporation.Jensen agrees to pay $20 000 for the product.The agreement includes a provision to the effect that the agreement is conditional of Jensen providing a letter from a bank,no later than two days after the execution of the agreement,that Jensen Corporation has the funds to pay for the goods.Three days after the signing of the agreement,Michael Products Limited has not provided the letter from the bank.Jensen Corporation can ________ because ________.

What is an implied term? In what circumstances are the courts likely to find that an implied term is appropriate to the interpretation of the contract?

When a contract is subject to a condition precedent and the condition is not satisfied,the contract ceases to exist.Explain.

Which of the following is NOT true?

When parties deal expressly with a matter in a contract,a court is not precluded from finding an implied term regarding that same matter.

To interpret the express provisions of a contract,a court will

A and B have been dealing together for 10 years,during which time A buys steel ingots from B.Throughout the 10-year period,A has always ordered the highest quality steel from B and B has delivered it.Last week,A ordered 1000 ingots of steel from B,but when he filled out the purchase order,A forgot to specify the highest quality of steel,and when the purchase order was received,B's employee delivered steel ingots of a lesser quality to A.A refuses the shipment,and B,whose business is suffering in a bad economy,finds himself forced to sue A.In this situation,

What is a condition precedent?

An implied term is

A court will sometimes recognize the existence of an implied term from customs in a particular trade or transaction.

When a person goes to court to have a provision of a contract interpreted,the court will