CONTRACTUAL TERMS
1. Terms
2. Mere representations: statements made around the the contract
3. Mere puffs
Types of terms:
Conditions: A condition is a major term of the contract which goes to the root of the
contract. If a condition is breached the innocent party is entitled to repudiate (end) the
contract and claim damages. Most important term.
Warranties: Warranties are minor terms of a contract which are not central to the
existence of the contract. If a warranty is breached the innocent party may claim damages
but can not end the contract. Less important type of term.
Innominate terms: Rather than classifying the terms themselves as conditions or
warranties, the innominate term approach looks to the effect of the breach and questions
whether the innocent party to the breach was deprived of substantially the whole benefit of
the contract. Only where the innocent party was substantially deprived of the whole benefit,
will they be able to treat the contract as at an end.
, Representations vs Terms
How to distinguish where oral statements made?
Basic test: Heilbut, Symons & Co v Buckleton [1913] AC 30
- Intention must be deduced from the totality of the evidence: objective test
4 principles:
a) timing:
b) importance
c) whether term reduced to writing
d) special knowledge
• Oscar Chess v Williams
- Plaintiff was car dealer, bought Morris car from defendant seller in part exchange
- Plaintiff discovered after purchase that logbook wrong and car was 1939 model not 1948
- Suit for difference in price-issue was statement as to age of car a term or a
representation?
- HELD
- Denning LJ and Hodson LJ: question of intention- knowledge key –intelligent bystander-
objective- buyers were experts-could have checked
- Statement was a innocent misrepresentation not a term
- Remedy of rescission lost through time
- Morris LJ:
- Dissenting
- Evidence points to term
- Statement as to vitally important matter
Misrepresentation Act 1967 = measure of damages
• Dick Bentley v Harold Smith
- Plaintiff buyer sues for damages for breach of term (warranty) as to mileage. Seller is car
dealer
- Denning MR: intention depends on conduct of the parties, on their words and behaviour,
rather than their thoughts
- Inference that making a warranty not rebutted here- seller was dealer “in a position to
know” “ought to have known better”
- Held for buyer
- The statement was a considered a term of the contract
• Esso v Mardon
• Routledge v McKay [1954]
- Written sale
- Oral representation made a week before written contract about age of motorcycle
- Denning: not a contractual statement no intent- seller pointed to log book-had no
knowledge
1. Terms
2. Mere representations: statements made around the the contract
3. Mere puffs
Types of terms:
Conditions: A condition is a major term of the contract which goes to the root of the
contract. If a condition is breached the innocent party is entitled to repudiate (end) the
contract and claim damages. Most important term.
Warranties: Warranties are minor terms of a contract which are not central to the
existence of the contract. If a warranty is breached the innocent party may claim damages
but can not end the contract. Less important type of term.
Innominate terms: Rather than classifying the terms themselves as conditions or
warranties, the innominate term approach looks to the effect of the breach and questions
whether the innocent party to the breach was deprived of substantially the whole benefit of
the contract. Only where the innocent party was substantially deprived of the whole benefit,
will they be able to treat the contract as at an end.
, Representations vs Terms
How to distinguish where oral statements made?
Basic test: Heilbut, Symons & Co v Buckleton [1913] AC 30
- Intention must be deduced from the totality of the evidence: objective test
4 principles:
a) timing:
b) importance
c) whether term reduced to writing
d) special knowledge
• Oscar Chess v Williams
- Plaintiff was car dealer, bought Morris car from defendant seller in part exchange
- Plaintiff discovered after purchase that logbook wrong and car was 1939 model not 1948
- Suit for difference in price-issue was statement as to age of car a term or a
representation?
- HELD
- Denning LJ and Hodson LJ: question of intention- knowledge key –intelligent bystander-
objective- buyers were experts-could have checked
- Statement was a innocent misrepresentation not a term
- Remedy of rescission lost through time
- Morris LJ:
- Dissenting
- Evidence points to term
- Statement as to vitally important matter
Misrepresentation Act 1967 = measure of damages
• Dick Bentley v Harold Smith
- Plaintiff buyer sues for damages for breach of term (warranty) as to mileage. Seller is car
dealer
- Denning MR: intention depends on conduct of the parties, on their words and behaviour,
rather than their thoughts
- Inference that making a warranty not rebutted here- seller was dealer “in a position to
know” “ought to have known better”
- Held for buyer
- The statement was a considered a term of the contract
• Esso v Mardon
• Routledge v McKay [1954]
- Written sale
- Oral representation made a week before written contract about age of motorcycle
- Denning: not a contractual statement no intent- seller pointed to log book-had no
knowledge
