Contract Law Basics: Terms and Representations

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Questions and Answers

What distinguishes a collateral contract from other terms of a contract?

It must be written down.

It can only be made in writing.

It is always a condition.

It is a separate but related contract. (correct)

Which of the following statements is NOT true regarding terms of a contract?

All representations are considered terms. (correct)

Terms can be either express or implied.

Terms are binding provisions.

Implied terms are not explicitly stated.

Which factor is NOT used to distinguish between a representation and a term?

The formalities of the written contract.

When the statement is made.

The importance of the statement.

The legal consequence of the statement. (correct)

Which of the following best describes implied terms in a contract?

Terms inferred by law or custom. (B) Signup and view all the answers

Which of these terms is a type of condition in a contract?

Innominate Term (A) Signup and view all the answers

What is the primary purpose of the parol evidence rule?

To prevent the introduction of additional terms to a written contract. (A) Signup and view all the answers

Which of the following is true concerning conditions and warranties?

Conditions have more severe consequences than warranties upon breach. (D) Signup and view all the answers

Which of the following does NOT typically result from a representation made during negotiations?

It is a binding term in the contract. (A) Signup and view all the answers

How does the timing of a statement relate to its binding nature?

A statement made shortly before the contract is concluded is more likely to be binding. (B) Signup and view all the answers

What did the case of Bannerman v White establish regarding the importance of statements?

The more important a statement is, the more likely it is to be considered a term. (D) Signup and view all the answers

In the presence of a written contract, what does the exclusion of a statement indicate?

The statement is more likely a representation. (B) Signup and view all the answers

When assessing the knowledge and expertise of the statement maker, what is a critical comparison?

Between the maker and the person who receives the statement. (A) Signup and view all the answers

In the case of Dick Bentley Productions Ltd v Harold Smith Motors Ltd, what was the misrepresentation about?

The car's mileage. (C) Signup and view all the answers

What conclusion can be drawn when a statement is made by an expert and is received by someone with lesser knowledge?

The statement is likely considered a term. (C) Signup and view all the answers

What principle can be derived from the case of Routledge v McKay concerning unlisted components in a contract?

The absence of a detail suggests it's a representation. (C) Signup and view all the answers

How does the duration between the statement and contract influence its classification?

Shorter durations suggest it is likely a term. (B) Signup and view all the answers

Study Notes

Contract Contents - Introduction

Contract negotiations are common
Are statements made during negotiations part of the contract?
- Yes, if they are terms (binding)
- No, if they're mere representations (not binding)
There are collateral contracts
- Distinct, separate contracts related but not part of the main contract.
- Are oral, not written terms of the main contract

Pre-Contractual Statements

Terms vs. Representations
- Terms are binding promises
Collateral Contracts
- Separate contracts from the primary one, related to it but not part of it.
- Usually oral, distinct from primary contract provisions.

Classifications of Contract Terms

Conditions
- Essential terms; breach allows termination of contract
Warranties
- Less important promises; breach only allows claim for damages
Innominate terms
- Importance of breach depends on the specific consequences.

Method to Distinguish Terms and Representations

When the statement is made:
- Longer time between statement and contract - likely a representation.
- Shorter time between statement and contract - likely a term.
Importance of the statement:
- More important statement - more likely a term.
Inclusion in the written contract:
- If excluded from a written contract - more likely a representation
Knowledge and Expertise of the maker:
- Maker has higher knowledge - more likely a term
- Maker has lower knowledge - more likely a representation

Case Examples

Routledge v McKay (1954):
- Statement about car age made weeks before sale
- Considered a representation because of the time gap
Bannerman v White (1861):
- Crucial question about sulphur use in hops
- Considered a term because it was critical to the agreement.
Dick Bentley Productions v Harold Smith Motors [1965]:
- Statement about car mileage by car dealer.
- Considered a term because the dealer should have known the correct mileage.
Oscar Chess v Williams [1957]:
- Non-dealer selling car relying on registration book for age
- Considered a representation because of the seller's lack of specialized knowledge.

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Description

This quiz covers essential concepts in contract law, including the distinctions between terms and representations, and the nature of collateral contracts. Test your understanding of binding promises and various classifications of contract terms such as conditions and warranties. Perfect for students looking to solidify their foundational knowledge in contract law.