Key Contract Law Phrases

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Assignment & Novation

This is when you transfer certain aspects of the contract over to a third party. With Assignment, you transfer only the good stuff. With Novation, you consign the good and the bad stuff. Just to put it very, basically. For example, You can only assign the benefits of this agreement to the third party, If you want to transfer the burden as well, then you will have to novate.  So, novation, it’s the burden and the benefits assignments, it’s purely the benefits you are passing to a third party.

Caveat Emptor

Caveat Emptor means let the buyer beware, a note that this is one Latin phrase that a lot of native English speakers know. So it’s not just a phrase known by lawyers. You will find that a lot of non lawyers, or lay people know it too, let the buyer beware. For example, “this sale is subject to the principle of Caveat Emptor” it means that if you are buying a product, you just have to be aware that it might not be of sufficient quality. There is a legislation on sale of goods on contract law that means if you do buy bad merchandise you can get your money back in a certain number of days.

Bill of Lading

We do a lot of work with lawyers who work in shipping law. So this comes up quite frequently in the language of shipping law. Bill of lading is when the importer of a particular product signs this agreement to confirm they have the product on their ship on their transport, so it is used to confirm that the goods have been transferred from the seller to the shipping agent or to the owner of the ship, or whatever you want to call them, and now they have possession of the goods. For example the bill of lading was issued to the exporter and now the goods can be shipped. You hear that a lot in shipping law, or if you are dealing with products which are being exported from China.

Competitive Tendering

We are not hearing too much about this term during the Covid-19 pandemic, but maybe we should. This is where you can have many businesses competing to take a responsibility for a service of providing a particular product. For example, during Covid-19, you could have ten companies or bidding to provide PPE (Personal Protective Equipment) to the health service  and it seems that at the moment, a lot of governments have not allowed for competitive tendering because of the speed and because of the need for PPE to be supplied very quickly. So competitive tendering is very important but usually in non emergency situations. There will be a competitive tendering process and then will award the contract.

Frustration

We have seen this also a lot during Covid-19 because a lot of contracts have become frustrated because they were not able to be performed because of Covid-19. So, frustration is when the contract simply cannot be performed for whatever reason. For example, a contract has been frustrated because of the pandemic.

Invitation to Treat

It is essentially an invitation for you to make a bid on something, an invitation for you to attempt to purchase something. In English Law, it is very clear under the law, that when you walk into a store or when you walk into a shop, the price labels that you see on the products, are not offers, they are invitations to treat so you could theoretically walk up to the shop assistant and say, I don’t want to give you three hundred pounds for this television. I will give you two hundred and fifty pounds, what do you say? So it is all right in this country to make an offer on a television that maybe is lower than the price tag, that’s an invitation to treat. For example, the courts have ruled that a price tag in a shop is an invitation to treat rather than an offer.