Contract Terms - Terms or Representations

Terms

Content of contract, points actually agreed by parties that form the contract. If term is breached, can bring claim for 'breach of contract'

Representation

Other statements made during negotiations to persuade the other party to enter the contract. Often beliefs or opinions rather than knowledge - only sue for misrepresentation.

4 Factors when deciding term or representation

1. Importance attached to statement
2. Special Knowledge/Skill who made statement
3. Time lag between statement and final contract
4. Whether contract was put into writing (or oral)

1. Importance attached to statement

If statement was very important to claimant when deciding whether to enter contract, statement was probably a term.

Couchman v Hill

Auction catalogue stated heifer was unserved and farmer and seller confirmed this. Heifer was pregnant when died calving. As statement was clearly important to purchaser of animal it was taken as a contract term rather than representation.

2. Special Knowledge/Skill of the person who made their statement

If the person making the statement was very knowledgeable about the subject, the statement is more than likely a term.

Dick Bentley v Harold Smith

Car stated that car has done 20,000 miles when in fact it had done 100,000.
Not written down but it was taken to be a term as it was important information

Oscar Chess v Williams

Private seller of car believed it to be a 1948 model but in fact it was a much older one. Not expected to have specialised knowledge so it was a representation and not a term.

3. Time Lag

If contract is finalised a long time after statement is made and statement was not repeated, likely to be representation.

Routledge v Mackay

Statement - relied on registration documents of motorbike.
Time Lag - 7 days after date of manufacture was mentioned which was misstated by 12 years - no mention of date of vehicle.
Statement was representation

4. Whether contract was put into writing or not.

Not all contracts are written down but if it is in writing, court will more likely believe any other statements made that were not included are just representations.