Terms and Reps Flashcards
What is a mere puff?
- exaggerated statement to induce a pretty to enter a contract, no legal effect.
- no reasonable person would believe it to be true.
Case examples of mere puffs
- Dimmock v Hallet - land was going to be sold to pay if debt, it was described as ‘fertile and improvable land’ this was not true.
Court held it to be not a fact but mere sales talk, describing the statement as a “flourishing description.” - Bisset v Wilkinson - the seller of land claimed it could sustain 2000 sheep; this was not true.
Court held – just an opinion and not a fact.
What is a representation?
afactualstatementthatinducesa person to enter into the contract but does not form part of the contract
- If false may be able ot claim misrepresentation under MA 1967.
What are terms and how re they classified?
- statement of fact, forms part fo the contract
- express terms - agreed specifically by the contracting parties and those set out in the contract in writing or orally.
- implied terms - not specifically agreed by the partiesbut are those which are read into (added to = implied) the contracts by the courts (sometimes called implied by fact), by the law, or by custom
- Classified:
1 - Condition - most important
2 - innominate term - neither condition nor warranty
3 - Warranty - less important than conditions.
How do you distinguish between representation and terms?
1 - verification - accepts truth = term (Godfrey)
2 - written claim - factual statements written = term (Routeledge v McKay)
3 - importance = term (Bannerman v White)
4 - special knowledge - Skill> = term (Oscar Chess, Bentley)
5 - lapse of time = representation (ROuteledge v McKay)
Express terms
Parole evidence rule - if a contract is written then that writing is the whole contract and the parties cannot adduceextrinsic evidence, and especially oral evidence, to “add to, vary or contradict the writing” (Henderson v Arthur[1907]).
- Exceptions - No exclusivity of intention, Ambiguity in Interpretation, Proof of custom forming background of contract, Rectification (for mistake), Identity of Parties, Identity of subject matter, Proof of Commencement or Cessation of contract.
Implied terms - By fact/courts
Application – rare cases where the particular circumstances make it necessary.
Rationale – based on what the parties must have intended but didn’t express
Test – what terms are necessary to make the contract work (give it business efficacy e.g., The Moorcock) – officious bystander test (something is so obvious that it goes without saying so that if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement by ‘of course’).
Implied by law
Application – to contracts with common relationships e.g., tenant and landlord (Liverpool v Irwin) and buyer/seller (Sale of goods act 1979).
Rationale – not base don parties’ intention, based on wider considerations.
Test – what terms are reasonable to imply. Compare to test of necessity.
Implied by custom
- Needs to be either a universal application of that term in a particular business or transaction, or it has ot be a recognised market, trade or business custom, nationally or locally. (Liverpool v Irwin)
What is a condition
- type of term
- most important
- goes to heart/root of the contract.
- by express intention e.g., Lombard
- or by implied intention e.g., Bunge - importance, certainty and time are all relevant to be implied.
- Breach -> right to terminate + damages.
What is an innominate term?
- type fo term
- not a condition or warranty
- determined by circumstances and consrqeucnes fo breach.
- Hong Kong Fir Shipping.
- Flexible approach - criticised in Mihalis Angelos
- Break -> termination + damages or damages only (Dep on type).
What is a warranty?
- type of term
- less important than conditions.
- e.g., Bettini v Gye
- Breach -> damages only.
