Contractual terms in English law is a topic which deals with four main issues.
These include: The parol evidence rule limits what things can be taken into account when trying to interpret a contract.
The Privy Council established a five stage test in BP Refinery (Westernport) Pty Ltd v Shire of Hastings:[13] In Australia, the High Court has ruled that the test in BP Refinery applies only to formal contracts, while the test in Byrne and Frew v Australian Airlines Ltd[17] shall apply to informal contracts: These are terms that have been implied into standardised relationships.
Most countries, for example, have statutes which deal directly with sale of goods, lease transactions, and trade practices.
For example, each American state except Louisiana has adopted Article 2 of the Uniform Commercial Code, which regulates contracts for the sale of goods.
Although these cases may appear to fall into the category of agreement to agree, Australian courts will imply an obligation to negotiate in good faith provided that certain conditions are satisfied[25] The test of whether one has acted in good faith is a subjective one; the cases suggest honesty, and possibly also reasonably.
For the circumstances when an obligation of good faith may in certain circumstances be implied see Yam Seng PTE Ltd v International Trade Corporation Ltd.[26] The Unfair Terms in Consumer Contracts Regulations 1999[27] reg 8 will render ineffective any 'unfair' contractual term if made between a seller or supplier and a consumer.
'Unfair' is a term that was not individually negotiated (i.e. standard form) that "causes a significant imbalance in the parties' rights and obligations arising under the contract to the detriment of the consumer".
[29] This is not possible if the term is not contrary to 'good faith'; such as in Director General of Fair Trading v First National Bank,[30] wherein the lack of a seemingly unfair interest term would leave the bank open to a very poor deal whereby no interest could be charged.