International Business Law

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Date Submitted: 10/25/2011 05:34 PM

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“A person should always be bound by the terms of the valid written contract he or she has signed”. Discuss this statement with reference to contract law theories and cases you have studied this semester.


A term is a legally binding statement or promise imposing obligations on each party. In a valid contract, terms are valid that every party are bound to, according to Parol evidence rule:”the main taken with written contracts is that if they are entirely in writing then the document itself contains all of the terms of the contract. This rule operates to restrict the parties to a written contract from providing evidence that contradicts the terms of the contract”.

Furthermore, when an exclusion clause appears, if it is contained in written contract, it is also valid stated in Signed documents:” an exclusion clause that is contained in a signed document will, prima facie, be binding on the party that signs the document, irrespective whether the party read or understood its contents…”. (See Case L’Estrange v Graucob [1934] 2 KB 394).

However, there is an exception that if the scope of the exclusion clause has been misrepresented by one party to other party then the exclusion is not valid and not a term even though it is contained in valid signed contract due to Effect of misrepresentation. (See Case Curtis v Chemical Cleaning Co [1951] 1 KB 805).


After a hot sleepless summer, John has decided to have a ceiling fan installed in his bedroom. He contacts Ada, a licensed electrician for a fixed-price quote. After an inspection, Ada provides John with a handwritten note on the back of her business card:”Estimate: Supply and fit of electric fan to bedroom –

Fan $200

Labor and materials: $300

Total: $500.”

John advises Ada- “that fixed price looks good. I think we might go with that”

The next day, Ada drops in a typed up document headed “Job Order” which contains the same information...