Notes on Express Terms

Terms: Promises made by parties - what the parties are agreeing to, whether it's duties, contingencies, benefits or detriments.

Express Terms:

Something that is expressly stated in a contract. What the parties want to be included.

The terms can be either vocalised or written down.

Express terms made orally

In negotiations promises will be made. We need to decide whether they are terms or representations.

Representations: Statements made which the parties do not intend to be legally binding. Untruth can give rise to misrepresentation.

Terms: Statements made that are meant to be part of the contract. If broken can give action to breach of contract.

The courts need to look at the intentions of the party - if there is any ambiguity as to whether a statement is a term or a representation, they will consider five things. This is an important decision as if you break a term, you break a contract, and it gives rise to all the remedies, including termination. If you make a representation that isn't true, this gives rise to misrepresentation which isn't as serious (may just be various damages to parties).

IMPORTANCE OF STATEMENT

The more important a statement is, the more likely it is that the courts will find it to be a term of a contract. If the party entered into the contract because of the statement it Is likely to be classed as a term by the courts.

 Bannerman v White

When buying hops, C asked whether the goods had been treated with sulphur. He stated that he would not even bother to ask their price if they had. D (honestly but mistakenly) said that the hops had not been treated in such way. White later found that the hops had been treated with sulphur. The more important a pre-contractual oral statement is expressed to be the more likely it is to be considered a term of the contract (as opposed to a representation). If a party has asked about something specific, if this is broken, the fact they asked suggests it was v important. 

SPECIAL KNOWLEDGE AND SKILL

 **** Bentley Productions v Harold Smith Ltd

C were looking to buy a Bentley car and had stated that they wanted one that was ‘well vetted’. D told them that he could sell them one that had recently had its engine and gearbox replaced. He stated that the vehicle had only done 20 000 miles since the work had been done. The car had actually done 100,000 miles since the work had been done. Harold had RELIED on the statement of the pro car dealer.  If a person with specialist knowledge and expertise makes a statement during contractual negotiations it is more likely to be considered a term than a representation

 Oscar Chess v Williams

D wanted to trade in his car and was offered £290 by the claimant for this old one. The trade in price was based on information in the registration documents which stated that the…