Terms
Terms and representations:
Statements made during negotiation can be:
1) Part of the contract = term
2) Reasons the induced the other part to the contract =
representations
3) Or BOTH
Different legal effects:
Terms:
Broken term – remedy for breach of contract
Representations
Untrue representation – remedy for misrepresentation
Term or representation:
Helibut, Symons & Co v Buckleton (1913) – C was planning to by
shares and asked opinion of company – “it’s a good company” was
this promise a binding term? Ct says “An affirmation at the time of
the sale is a warranty (i.e. contract term), provided it appear on
evident to be so intended” – Objective test- did they mean for it to
be binding/was It indented?
Various Criteria –
1) Timing of the statement
2) Importance of statement
3) Whether one party is relying on the other
4) Relative knowledge of the parties
o Ecay v Godfrey – Buyer was told the boat was in sound
condition, and the seller suggested the boat should be
serviced before he made the final decision. Fact the seller said
this, that this was evidence they did not want to promise the
boat was in sound condition.
o Oscar Chess v Williams – Sale of a second hand car, seller
stated the car was registered in 1948- turned out to be untrue
meaning the car was less. Seller was only saying what the log
book said- where someone before had falsified it. Ct said
Williams didn’t have any knowledge whereas the car dealer
did- so the layperson didn’t make a binding promise of the age
of the car – it would’ve been easier for the dealer to check.
Confirmed the objective test.
o Dick Bentley v Harold Smith – Claimant asked Smith to find
him a Bentley – expert in these cars. Found him one, an expert
said who it had been owned by, what had been refitted – since
this it had only made 20,000 with the new engine (this was
wrong, more miles). Ct said claimant relied on expertise of the
dealer and was in a position to find out the correct details.
Agreed to contract on this fact – promise was binding.
Terms and representations:
Statements made during negotiation can be:
1) Part of the contract = term
2) Reasons the induced the other part to the contract =
representations
3) Or BOTH
Different legal effects:
Terms:
Broken term – remedy for breach of contract
Representations
Untrue representation – remedy for misrepresentation
Term or representation:
Helibut, Symons & Co v Buckleton (1913) – C was planning to by
shares and asked opinion of company – “it’s a good company” was
this promise a binding term? Ct says “An affirmation at the time of
the sale is a warranty (i.e. contract term), provided it appear on
evident to be so intended” – Objective test- did they mean for it to
be binding/was It indented?
Various Criteria –
1) Timing of the statement
2) Importance of statement
3) Whether one party is relying on the other
4) Relative knowledge of the parties
o Ecay v Godfrey – Buyer was told the boat was in sound
condition, and the seller suggested the boat should be
serviced before he made the final decision. Fact the seller said
this, that this was evidence they did not want to promise the
boat was in sound condition.
o Oscar Chess v Williams – Sale of a second hand car, seller
stated the car was registered in 1948- turned out to be untrue
meaning the car was less. Seller was only saying what the log
book said- where someone before had falsified it. Ct said
Williams didn’t have any knowledge whereas the car dealer
did- so the layperson didn’t make a binding promise of the age
of the car – it would’ve been easier for the dealer to check.
Confirmed the objective test.
o Dick Bentley v Harold Smith – Claimant asked Smith to find
him a Bentley – expert in these cars. Found him one, an expert
said who it had been owned by, what had been refitted – since
this it had only made 20,000 with the new engine (this was
wrong, more miles). Ct said claimant relied on expertise of the
dealer and was in a position to find out the correct details.
Agreed to contract on this fact – promise was binding.
