Timeshare Law of Contract Explained (Part 2)
Formalities and Writing
Typically, contracts are oral or written, but written contracts have typically been preferred in common law legal systems in respect to timeshare; in 1677 England passed the Statute of Frauds.
If the contract is not required by law to be written, an oral contract is valid and therefore legally binding.
If a contract is in a written form, and somebody signs it, then the signer is typically bound by its terms regardless of whether they have actually read it provided the document is contractual in nature. However, affirmative defences such as duress or unconscionability may enable the signer to avoid the obligation(s). Further, reasonable notice of a contract’s terms must be given to the other party prior to their entry into the contract.
Invitation to Treat
Where a product in large quantities is advertised in a newspaper or on a poster, it generally is not considered an offer but instead will be regarded as an invitation to treat, since there is no guarantee that the store can provide the item for everyone who might want one. However, an exception to this rule may be made if an advertisement includes a reward, which is what happened in the famous case of Carlill v. Carbolic Smoke Ball Company, decided in nineteenth-century England
Performance varies according to the particular circumstances. While a contract is being performed, it is called an executory contract, and when it is completed it is an executed contract. In some cases there may be substantial performance but not complete performance, which allows the performing party to be partially compensated.
Uncertainty, Incompleteness and Severance
If the terms of the contract are uncertain or incomplete, the parties cannot have reached an agreement in the eyes of the law. An agreement to agree does not constitute a contract, and an inability to agree on key issues, which may include such things as price or safety, may cause the entire contract to fail. However, a court will attempt to give effect to commercial contracts where possible, by construing a reasonable construction of the contract.
Courts may also look to external standards, which are either mentioned explicitly in the contract or implied by common practice in a certain industry. In addition, the court may also imply a term. If there are uncertain or incomplete clauses in the contract and all options in resolving its true meaning have failed. It may of course be possible to sever and void just those affected clauses if the contract includes a severability clause. The test of whether a clause is severable is an objective test (whether a reasonable person would see the contract standing even without the clauses.
In respect to Timeshare some companies are in short making up terms and conditions as the original contracts are silent as to the terms which are required to provide those timeshare companies with benefit, comfort etc.
Such introductions of terms unilaterally will be deemed unfair unless the construction of the contact in respect to its workability is ineffective without them.
The implementer of additional terms will have to show that they are not being enriched; the term does not frustrate the contract or deprive the other party of rights which they enjoy in the contract.
It is always difficult for the author of a contract to add in new terms which seek to benefit them without firstly enriching the other party for the rights they have lost or have perceived to have lost.
It’s always good practise to listen to what the implementer of new term is saying and applying a test benefit before a challenge.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk