Representations and Terms

Question 1

How to tell if a false statement of fact is a representation or a term?(Redgrave v Hurd)

Answer 1

• Must ask if an objective reasonable person in assessing the intentions of the parties would say that this was intended to be a term of the contract? If not, then it’s not a term and is representation by default. –> You would then do the test under Redgrave v Hurd to see if it’s a misrepresentation.

Question 2

Halibut, Symons & Co. v Buckleton (Term vs Representation)

Answer 2

• Whether a statement is a contractual promise, or a representation can be assessed based on the intentions of the parties assessed by an objectively reasonable 3rd party.
• If a promise/statement in a written contract was not included then that is a good indication that it is not a contractual promise/term.
• Precontractual representation about the contract does not automatically become a term. In other words, the default starting point is that the statement is a representation.
• Something is not a term when the parties did not intend for such a component to be a part of that deal.
  A short off the record statement is not good evidence to suggest that it was intended to be part of the term.

Question 3

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd., 1965
(Term vs Representation)

Answer 3

(1) Objectively in context, a statement can be treated as a term if it was a very important statement in relation to the thing being sold.
- Making inquiries into the quality of the engine is central to the agreement.
(2) Statements that were made for the purpose to induce a party into the contract (central to the whole contract), that were made at the material time of the contract formulation, and that are objectively very important to the subject matter of the contract, and the party acts upon this inducement then it will very likely be considered terms by the court.
(3) Statements that are made where there is a knowledge imbalance between the seller and buyer, where the seller has a monopoly of knowledge over the subject matter, will be treated as a term.

Question 4

Leaf v International Galleries
(Term vs Representation/Authenticity of Painting)

Answer 4

• When you buy a painting and it is represented to be from an authentic original painter, the authenticity of a piece of art (quality of the subject matter) to a painter should be considered a term of the contract.
• If the representation was written into the deal, its clearly a term.
  It was written into the deal that the painting was from Constable.