Express Terms contrasted with representations Flashcards
How may contractual terms be?
- express
- implied
What are express terms?
statements made by the parties, by which they intend to be bound.
A contract can have terms agreed in writing, agreed orally, or mixture of the two.
What are implied terms?
terms not formed by stmts made by parties – they have not been agreed upon, orally/ in writing.
Law deems they exist.
Statements made by the parties during negotiations leading up to a contract can be divided into three groups: they are…
(a) Mere puffs
= statements of no legal effect.
(b) Statements of fact/ law which parties don’t intend to be binding.
= classified as representations if they help induce the making of the contract.
(c) Statements of fact which parties intend to be binding.
= the terms of the contract.
What is the possible action for representation?
misrepresentation
What is the difference between a representation and a term?
a term is intended to be binding
How will courts decide whether the parties intended to be bound by a statement made by one of them?
court applies obj test: ‘what would a reasonable person understand to be the intention of the parties, having regard to all the circumstances?’
If there’s a statement is made during negotiations for the purpose of inducing the other party to enter into the contract… what can be inferred?
Statement was intended to be a binding term of the contract.
How can a party rebut the inference that a stmt made during negotiations was for purpose of inducing other party to enter into contract?
if party making the statement can show that it would not be reasonable to hold them bound by it.
What 5 factors should be taken into account in questioning whether the parties intended the statement to be binding?
1) importance of statement
2) timing of statement
3) reduction of contract into writing
4) special knowledge/ skills of person making the statement
5) assumption of responsibility
What happens if the answer is YES to any of the previous 5?
The statement is a term of the contract.
Any breach = claim for breach of contract
What happens if the answer is NO to any of the previous 5?
- A representation (if false, claim for misrep might b poss); or
- a mere puff, with no legal effect
How may a statement be regarded as a term of the contract?
if it can be shown that injured party considered it so important that it would not have entered into the contract but for that statement.
What may it likely be held if the statement was made at the time of contracting?
that it’s a term of the contract, rather than if it was made during the early stage of negotiations
If there’s a delay between the making of the statement + the parties entering into the contract = less likely to be treated as a term.
What inference could be made if a statement was not drawn up by the parties into the contract?
Couldn’t have been that significant - otherwise they would have concluded the statement into the written contract.
