Contract Law Seminar 2- Terms of Contract (4/12/17)
Musgrave are legally obliged not to issue the new editions because the original 50 buyers
believed they were (so bought for a higher price) limited edition and of a restricted number.
Musgrave are legally entitled to issue the new editions because it doesn’t state anywhere that
those 50 prints will be the only 50 prints ever and they are not referred to as limited edition in
the terms and conditions.
a) -Was ‘limited edition’ just a statement to help sales? And did it mislead the buyers?
-Did it need to be mentioned in the contract that they were limited edition? Does the fact that
this description isn’t present mean that they weren’t actually limited edition? What does
limited edition actually mean? Interpretation
Implied term to prevent brining out new editions
Intention of complete contract- parole evidence rule
b) -Statements used to help in a sale; ‘mere puff’, ‘mere representations’ and contractual terms.
In this case the term limited edition seems to be a statement of mere representation. I this is
the case, the term limited edition was not part of the contract so they couldn’t sue for breach
of contract but could for misinterpretation. Representations are statements of facts but aren’t
promises that it will be true. Have to look at the objective test for intention (???? Check
wording); importance of statement, relevant expertise and responsibility for veracity.
c) Importance of statement to the parties- Couchman v Hill, Bannerman v White. To the
buyers the fact that they were limited edition was very important. The price of the prints
(upwards of £12 million shows this). This increases the likelihood of it being a contractual
statement.
Relative expertise of the parties- Oscar Chess v Williams, Dick Bentley Productions v
Harold Smith (Motors) Ltd. The seller of the painting did have relevant expertise so would’ve
known that by saying the prints were limited edition they would sell for a higher price. This
increases the likelihood of it being a contractual statement.
Assuming responsibility for veracity or verification- Ecay v Godfrey, Schawel v Reade. It
is hard to say whether responsibility for truth was assumed. It also couldn’t be tested by the
buyers. This decreases the likelihood for it being a term. Assume responsibility for limited
edition and if it is not. Or increases the responsibility.
Meaning of ‘limited edition’ (interpretation)- Arnold v Britton. Give effect to what the
parties would’ve intended and had in mind whilst contracting. The buyers took a risk (like
those with the 10% interest) that more prints wouldn’t be released. Court role isn’t to save
people from poor contracts. Based on this the term limited edition wouldn’t necessarily mean
exclusive. Or Investor compensation scheme- the 5 steps from Hoffman
Intention- NatWest v Bernie. (read this case) relevant factors for intention. Inclusion of
statement in description is relevant
Implication- business efficacy test and officious bystander test. M&S case-the 6 points
d) The test of objectivity of statements must be looked at a whole so the fact that the last factor
of it is ambiguous may mean that the test isn’t satisfied to the claim of limited edition is only
a representation and not a contractual obligation. This would mean Musgrave would be free to
make and sell more prints. Similarly, the term limited edition isn’t taken as an exclusive right,
it just means the prints and set at the time were limited. Not that they would never be released
again.
Musgrave are legally obliged not to issue the new editions because the original 50 buyers
believed they were (so bought for a higher price) limited edition and of a restricted number.
Musgrave are legally entitled to issue the new editions because it doesn’t state anywhere that
those 50 prints will be the only 50 prints ever and they are not referred to as limited edition in
the terms and conditions.
a) -Was ‘limited edition’ just a statement to help sales? And did it mislead the buyers?
-Did it need to be mentioned in the contract that they were limited edition? Does the fact that
this description isn’t present mean that they weren’t actually limited edition? What does
limited edition actually mean? Interpretation
Implied term to prevent brining out new editions
Intention of complete contract- parole evidence rule
b) -Statements used to help in a sale; ‘mere puff’, ‘mere representations’ and contractual terms.
In this case the term limited edition seems to be a statement of mere representation. I this is
the case, the term limited edition was not part of the contract so they couldn’t sue for breach
of contract but could for misinterpretation. Representations are statements of facts but aren’t
promises that it will be true. Have to look at the objective test for intention (???? Check
wording); importance of statement, relevant expertise and responsibility for veracity.
c) Importance of statement to the parties- Couchman v Hill, Bannerman v White. To the
buyers the fact that they were limited edition was very important. The price of the prints
(upwards of £12 million shows this). This increases the likelihood of it being a contractual
statement.
Relative expertise of the parties- Oscar Chess v Williams, Dick Bentley Productions v
Harold Smith (Motors) Ltd. The seller of the painting did have relevant expertise so would’ve
known that by saying the prints were limited edition they would sell for a higher price. This
increases the likelihood of it being a contractual statement.
Assuming responsibility for veracity or verification- Ecay v Godfrey, Schawel v Reade. It
is hard to say whether responsibility for truth was assumed. It also couldn’t be tested by the
buyers. This decreases the likelihood for it being a term. Assume responsibility for limited
edition and if it is not. Or increases the responsibility.
Meaning of ‘limited edition’ (interpretation)- Arnold v Britton. Give effect to what the
parties would’ve intended and had in mind whilst contracting. The buyers took a risk (like
those with the 10% interest) that more prints wouldn’t be released. Court role isn’t to save
people from poor contracts. Based on this the term limited edition wouldn’t necessarily mean
exclusive. Or Investor compensation scheme- the 5 steps from Hoffman
Intention- NatWest v Bernie. (read this case) relevant factors for intention. Inclusion of
statement in description is relevant
Implication- business efficacy test and officious bystander test. M&S case-the 6 points
d) The test of objectivity of statements must be looked at a whole so the fact that the last factor
of it is ambiguous may mean that the test isn’t satisfied to the claim of limited edition is only
a representation and not a contractual obligation. This would mean Musgrave would be free to
make and sell more prints. Similarly, the term limited edition isn’t taken as an exclusive right,
it just means the prints and set at the time were limited. Not that they would never be released
again.
