Contents of Contract Introduction PDF

Contents of Contract Introduction  Topics (A) Pre-contractual Statements 1. Terms vs representations 2. Collateral contracts 3. Parol evidence rule  Exceptions (B) Terms of the Contract 1. Classifications of terms (conditions, warran...

Contents of Contract Introduction  Topics (A) Pre-contractual Statements 1. Terms vs representations 2. Collateral contracts 3. Parol evidence rule  Exceptions (B) Terms of the Contract 1. Classifications of terms (conditions, warranties, innominate) 2. Implied terms 3. Exemption clauses 2 © Izura M Zakri (UM)  (A) Pre-Contractual Statements 1. Terms / Representations  Introduction  Negotiations are common in a contract  Are the statements made during negotiations a part of the contract?  Yes – terms of contract (binding)  No – mere representations (not binding)  There is one more ‘unique’ situation: collateral contract  Oral statement made before a written contract that is binding  So, question:  What is the difference between ‘Term’ & Collateral Contract? 5 © Izura M Zakri (UM)  Terms Collateral Contract  Specific provisions and conditions in  A collateral contract is a separate and a contract distinct contract that is related to, but  These terms can be express or not part of, the main contract. implied  It is not a term of a contract, but a  Express terms are explicitly stated by contract by itself the parties, either orally or in  It is, and can only be, in oral form writing  Implied terms are not explicitly stated but are inferred by law or custom. 6 © Izura M Zakri (UM)  Pre-contractual statements Representations Terms Collateral Contract Binding promise Condition given during negotiations Innominate Terms Warranty 7 © Izura M Zakri (UM)  Method to distinguish 1. When the statement is made 2. Importance of the statement 3. Inclusion into the written contract 4. Knowledge and expertise of the maker of the statement Note: It is a guideline to aid the judge in making a decision 8 © Izura M Zakri (UM)  1. When the statement is made  The length of time between when (i) A statement made, and (ii) The contract is concluded  The longer it is – the more likely it is a representation  The shorter it is – the more likely it is a term Routledge v McKay 1 ALL ER 855 Statement by the seller was made on 23 October that the model of the motorcycle combination was 1941 or 1942. The registration book confirms this. Contract concluded on 30 October. Discovered that the true model year is 1930. 9 © Izura M Zakri (UM)  Bannerman v White (1861) 10 CBNS 844 In October 1860, the Plaintiff (well-known hop-grower in the county of Kent) offered the Defendants (hop-merchants in London) his growth of that year. Samples produced. Before price mentioned, D asked if any sulphur had been used in the treatment of the hops that year. P answered, “No”. Price then discussed, and D agreed to buy. Sulphur had been used. 10 © Izura M Zakri (UM)  2. Importance of the statement  The more important it is – the more likely it is a term Bannerman v White “would not even ask the price if any sulphur had been used” 11 © Izura M Zakri (UM)  3. Inclusion in the written contract  If there is a written contract, its exclusion – the more likely it is a representation  Look at the entire contract Routledge v McKay The model year was not included, yet the cc was. 12 © Izura M Zakri (UM)  4. Knowledge and expertise  Of the MAKER of the statement  Comparison must be made  That is, compare the knowledge and expertise between:  the person who makes the statement, and  the person who receives the statement  If maker has higher = term  If maker has less = representation 13 © Izura M Zakri (UM)  Dick Bentley Productions Ltd v Harold Smith Motors Ltd 2 All ER 65 Representation concerning the mileage of the car was wrong. Stated it to be 20,000 miles whereas in actual fact, was nearly 100,000miles. D, as car dealers, was in a position to find out. Merely relying on the registration book was not sufficient. Held … term. Oscar Chess Ltd v Williams 1 All ER 325 D bought and resold the car to P, who are motor-dealers. Relied on the logbook for information. Held … Representation which is not binding. 14 © Izura M Zakri (UM) END