Term vs Representation CASES
In English law, distinguishing between a term and a representation is crucial when assessing contractual statements, determining their legal significance and available remedies if breached.
Definitions and Principles
- Term: A contractual promise forming part of the agreement. Breach of a term allows for remedies including damages, termination, or specific performance.
- Representation: A pre-contractual statement intended to induce the other party into the contract but not forming part of the actual agreement. Breach typically leads to misrepresentation claims, primarily offering rescission or damages.
Factors for Determination
- Importance: More significant statements are usually terms.
- Reliance: If reliance is crucial, a statement might be considered a term.
- Timing and Form: Statements closer to contract formation and included formally are likely terms.
Practical Importance
Clearly distinguishing terms from representations clarifies contractual obligations, ensuring parties understand their rights and remedies when disputes arise.
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The seller of a motorcycle incorrectly stated its model year a week before the sale. The subsequent written contract did not include this detail. The court held the statement was an innocent misrepresentation, not a contractual term (warranty). Facts The plaintiff, Mr Routledge, purchased a Douglas motorcycle combination from the defendant, Mr McKay. During pre-contractual negotiations on 23rd October 1949, the defendant, relying on information in the motorcycle’s registration book, stated that it was a 1942 model. In fact, the registration book was a replacement and incorrect; the motorcycle was a 1936 model with a sidecar of an even earlier
A private seller sold a car to a dealer, innocently misrepresenting its age as 1948 based on the logbook, when it was a 1939 model. The court held the statement was a representation, not a contractual warranty, as the dealer possessed superior knowledge. Facts The defendant, Mr Williams, offered his mother’s Morris car in part-exchange for a new car from the plaintiffs, Oscar Chess Ltd, a firm of car dealers. The car’s registration book, which the defendant honestly believed to be correct, stated it was first registered in 1948. Based on this, the plaintiffs’ representative confirmed the car was a
An agent stated his firm was 'bringing out a rubber company.' The claimant bought shares, but the company wasn't solely for rubber. The House of Lords held this was an innocent misrepresentation, not a contractual warranty, establishing a high threshold for such claims. Facts The respondent, Mr Buckleton, contacted the appellants, Heilbut Symons & Co., a firm of rubber merchants, to inquire about shares in a new rubber and produce company. Mr Buckleton telephoned Mr Johnston, the appellants’ manager, and asked if they were ‘bringing out a rubber company’. Mr Johnston replied that they were. On the basis of this
A car dealer stated a car had only done 20,000 miles since a replacement engine. This was false. The court found this was a contractual warranty, not an innocent representation, because the dealer, as a specialist, was in a position of knowledge. Facts The claimant, Mr Dick Bentley (of Dick Bentley Productions Ltd), was a long-standing customer of the defendant car dealers, Harold Smith (Motors) Ltd. Mr Bentley informed Mr Smith that he was looking for a ‘well-vetted’ Bentley car. Mr Smith subsequently acquired a Bentley car and told Mr Bentley that the vehicle had only travelled 20,000 miles since
