Hi, I'm Matt Firth and welcome to TransLegal's lesson of the week.
Today I'm going to be talking about some terminology surrounding contracts. Specifically I'm going to be looking at some terms that some of my students sometimes find confusing.
If you can have a look on the board you'll see three pairs of terms. We've got duress, undue influence, termination and severability, costs and consideration.
Two of these are concerning money, one of the pairs is concerning defences, in American English it is spelled with an "s", British English with a "c" and two of them concern contract clauses. Have a look and see which one do you think is which.
Ok, well we'll start at the first two. The first two are types of contract defences, defences to a contract, or defences to contract formation. So what's the difference between duress and undue influence.
Well duress is when, if at the time of signing a contract or entering into an agreement, I'm under immediate physical threat or danger. Let's say an extreme example, someone could hold a gun to my head and say sign this contract. Under that situation the contract is unenforceable and the defence would be duress.
Undue influence would be where a professional abuses their professional relationship with me, to persuade me to enter into a contract that otherwise no reasonable person would have entered into. That's undue influence.
Ok, what about these two – termination and severability. Well these are both two types of contract clauses. A termination clause is the clause in a contract which outlines the circumstances under which the contract will be terminated.
Severability is rather different. Severability says that it's the clause which states that if for some reason one of the contract clauses, part of the contract is unenforceable the rest of the contract still stands. So the rest of the contract will still be valid.
OK, costs and consideration. Well these are both to do with money. Consideration is what induces one party to enter into a contract but usually, generally speaking we're talking about money. And the consideration clause in the contract is the clause in the contract which details payment. The price of the contract.
If for some reason this contract then goes to court, if there's a breach of the contract, if it's a subject of litigation, then one side is going to have to pay and what they have to pay is costs and costs refer to all legal fees that are incurred during a case.
So, hopefully that's been helpful. Thanks very much and please do leave some feedback.