Contents of contract
Terms are the contents or subject matter of the contract.
In other words content of a contract is what the parties have agreed upon. While agreeing upon the content a lot of negotiations take place and many statements are made. Do all of them become part of the contract and thus binding on the parties? No. In order to understand the terms of the contract, a distinction needs to be made between the following; •Terms and mere representations.
•Statement of opinions (mere puffs).
These are statements usually made during the pre-contractual stage and merely induce the parties to enter into a contract. Term
It is a representation either expressly incorporated into a contract or implied by fact or law. Terms are binding obligations which the parties agree to perform in order for the contract to be complete. Terms can be
• Expressly stated and incorporated into the contract by the parties themselves. • Implied factually from the circumstances as being the presumed intention of the parties. • Imputed into the contract by process of law for some other purpose. • Whether a statement has become a term of the contract depends on the intention of the parties.
The court while deciding whether a statement is a term or a representation will look into the following factors. • Whether the maker of the statement advised the other party to verify the truth of his statement • Importance of statement.
• Respective state of knowledge of the parties.
The respective knowledge of the parties
•Oscar Chess Ltd v Williams (1957), it was held that a statement by a member of the public (a non-expert) to a garage (an expert) with regard to the age of a car was a mere representation not a term. • (Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd (1965). •A statement made by a garage (an expert) to a member of the public (a non-expert) concerning the mileage of a car was held to be a term •Importance to the parties
•In Bannerman v White (1861), the buyer stated ‘if sulphur has been ...