Terms and Breach of Contract

Schawel v Reade (1913) - the claimant purchased a horse from the defendant. The claimant went to see the horse and had told the defendant that he wished to use the horse for stud purposes. Whilst he was examining the horse, the defendant told him that the horse was sound. He stated that if there was anything wrong with the horse he would tell him and told him there was no need to get a vet to check him out. In reliance of these statements the claimant purchased the horse which turned out to have a hereditary eye disease and was therefore not able to be used as a stud. It was held that the statement was a contractual term. The defendant had assured him that he could rely on his word and the claimant had communicated the purpose for which the horse was to be used. The defendant was thus in breach of contract. 

Bannerman v White (1861) - the claimant agreed by contract to purchase some hops to be used for making beer. He asked the seller if the hops had been treated with sulphur and told him if they had he wouldn't buy them as he would not be able to use them for making beer if they had. The seller assured him that the hops had not been treated with sulphur. In fact they had been treated with sulphur. It was held that the statement that the hops had not been treated with sulphur was a term of the contract rather than a representation as the claimant had communicated the importance of the term and the relied on the statement. His action for breach of contract was successful. 

**** Bentley Productions Ltd v Harold Smith (Motors) Ltd (1965) - the claimant knew the defendant, who was a car trader specialising in the prestige market, for some time. He had asked him to look out for a well-vetted Bentley car. The defendant obtained a Bentley and recommended it to the claimant. He told him that the car had been owned by a German Baron and had been fitted with a replacement engine and gearbox and had only done 20,000 miles since the replacement. The claimant purchased the car but it developed faults. The defendant had done some work under the warranty but then more faults developed. It transpired that the car had done nearer 100,000 miles since the refit. The question for the court was whether the statement amounted to a term in which case damages would payable for breach of contract, or whether the statement was a representation, in which case no damages would be payable since it was an innocent misrepresentation and the claimant had also lost his right to rescind due to lapse of time. It was held that the statement was a term. The defendant as a car dealer had greater expertise and the claimant relied upon that expertise. 

Esso Petroleum Co Ltd v Mardon (1976) - the claimant acquired a petrol station…