Chapter 9: Representation And Terms Flashcards
Contractual term
A statement included in the agreement as a legally enforceable obligation
Pre-contractual representation
Statement one party makes with the intention of inducing another party to enter into a contract
Misrepresentation
False statement of an existing fact that causes recipient to enter into a contract
Opinion
Statement that is a belief or judgement
-not misrepresentation unless stated in a way to make someone believe it’s true
Statement of future conduct
Statement about future interactions
Not misrepresentation unless:
- statement made fraudulently
- future conduct described in terms of present intention
Silence distort previous assertion
If circumstances change to affect the accuracy of earlier representation, the burden falls on the person who made the statement to disclose the change
Statement as a half truth
Unspoken words alter meaning of the statement
Contract of utmost good faith
Requires a party to fully disclose material facts
A breach is considered misrepresentation
Special relationship between parties
Relationship is one of trust or one party has special influence over the other
Other party must disclose material facts whether questions are asked or not
Inducement
Deceived party must prove that false statement mislead recipient into entering contract
Recission
Cancellation of contract with aim of restoring parties to their pre-contractual state
Restitution
Giving and taking back on both sides
Affirmation
When misled party declares an intention to carry out contract as though they were bound by the contract
Damages (in misrepresentation)
Awarded against party that made statement
Meant to compensate for damages suffered as a result of relying upon a misrepresentation
Innocent misrepresentation
Carefully made statement without knowledge that fact is false
Remedy: recission
Negligent misrepresentation
Misrepresentation made recklessly without regard to the truth
Remedy: recission
-possibly damages (if treated as a tort)
Fraudulent misrepresentation
Make statement (that is known to be false) without regard for the truth
Remedy: damages (tort of deceit)
Express terms
Statement made by a party that a reasonable person would would believe was made with the intention to create enforceable obligation
Parol evidence (rule)
Evidence not contained in the written contract
Generally not enforceable
Exceptions to parol evidence rule
- proof a contract a contract wasn’t fully formed/ defective
- used to resolve ambiguities in contract
- demonstrate that document does not contain parties complete agreement
- collateral contract
Collateral contract
A statement that is separate agreement made in exchange for another party’s entrance into main contract
Literal approach to interpretation of express terms
Ordinary meaning, plain stated
Contextual approach to interpretation of express terms
Look at party’s presumed intentions and their circumstances
Golden rule
Meaning of works are given plain meaning unless doing so leads to absurdity
Contra proferentum rule
Meaning least favourable to author of contract will prevail
Implied terms
Arises by operation of law (common law or statute)
Exclusion clauses
Contractual term that seeks to protect one party from various forms of legal liability
Boilerplate clauses
Standard provision that can be reused in various contractual settings
Force majeure clause
Type of boilerplate clause
Aims to protect parties when some part of contract cannot be performed because of an event outside their control
Confidentiality clauses
Prevents disclosure of some terms in contract to third parties
Narrowly drafter to only apply to some terms
Arbitration clause
Outlines who should resolve inevitable dispute and what method of arbitration should be used
Jurisdiction clause
Predetermined locale of the court/ whose law shall apply in a dispute
Entire agreement clause
Stipulates that entire agreement continued only in the contract
-exceptions to parole evidence cannot operate
