The rule in L’Estrange v Graucob
This rule is named after the case from which it came, and states that if a
person signs a document which forms a contract, then he is bound by that
contract, even though he may not have read the terms. This indicates the
importance of reading a document thoroughly before signing it.
The parol evidence rule
In the case of Goss v Lord Nugent (1833) Lord Denman stated the rule that
generally oral or other evidence will not be admitted to contradict or amend
a written contract. However, the parol evidence rule is then subject to
various exceptions. If the contract was partly written and partly oral,
evidence of the remainder of the agreement will then be allowed. Another
example is where a collateral contract exists.
Implied terms
It may be that a term has been omitted by mistake, when both parties
clearly intended it to apply, or that statute or custom declares that a term
must be incorporated. In such circumstances the courts can imply a term
into a contract. These circumstances will be considered in turn.
Custom
The common law developed largely by custom, and in the past this played
an important part in contract law. It is now less important as statute and
case law have defined the boundaries of the law more clearly. Custom still
arises, however, in commercial contracts, and we have already seen how a
‘course of dealing’ can lead to a term being incorporated into an oral
contract. In a similar way customary usage within a trade may lead to a
term being implied into a written contract. Here it is not necessary to show
previous transactions between the parties.
Statute
Where a statute declares that a term shall be included in a particular type
of contract, then it will be implied whether the parties intend it or not.
Examples are found in such statutes as the Sale of Goods Act 1979 (as
amended), Unfair Contract Terms Act 1977, etc. These are in many cases
a codification of custom or common law, an example of this being that
where goods are sold by sample, this should correspond with the bulk of
the goods.
See Chapter 16 for further details.
102 Contract law