Classification and Incorporation of Terms

Question 1

Definition

Answer 1

A term is a statement within a contract which both parties must follow
A representation is a statement which induces a party to start a contract

Question 2

Term or Representation?

Answer 2

Importance attached (Couchman v Hill)
Special knowledge/skills- Person making the statement has skills then it is more likely to be a term as buyer will believe the seller (Oscar Chess v Williams)
Time lag- If a contract is made some time after negotiations and doesn’t refer to this statement then it is likely not important or a term
Written contract- The courts presume everything the parties wanted to include as a term should be written into the contract

Question 3

Express terms

Answer 3

Terms that are written into the contract

Question 4

Types of term

Answer 4

Condition- Terms of a contract that are essential to the completion of the contract, the party suffering the breach is able to terminate the contract and claim damages (Poussard v Spiers Pond)
Warranty- Non vital term within a contract that is still important to the completion but will not destroy it, the party suffering is able to claim damages but the contract will still suffer (Bettini v Gye)
Innominate terms- Neither a condition or warranty, hybrid term, depends on how serious the consequences of the breach are but it is up to the courts to decide (Hong Kong Fir Shipping v Kawasaki Kisen Kaisha)