The Pros And Cons Of Contractual Statement

Terms of contract set out duties of each party under that agreement, a contractual term is legally binding to the relevant parties involved while a representation is more towards showing interest in forming a contract but is not legally binding. There are two different types of terms which are known as express terms and implied terms. An express term are terms that are laid down by the parties themselves whereas implied terms are read into the contract by the court on the basis of the nature of the agreement and the parties’ apparent intentions, or on the basis of law on certain types of contract. Statements made during the course of negotiations could amount to a contractual term or a representation. It is important to know whether a particular statement is a contractual term or if it is a representation, as this will determine the appropriate cause of action and remedy available. In the case of Heilbut, Symons & Co v Buckleton, the court held that there are 4 factors that must be taken into consideration before deciding whether the statement is a term or a mere representation.The first factor is known as time. Here, the courts will consider lapse of time between the making of the statement and the contract's conclusion. In other words, if the interval is short the statement is more likely to be a term. Routledge v. McKay. However, if the statement is otherwise strong and important, then this may override the significant delay between when the statement was made and when the contract was made. Schawel v. Reade The second factor that the courts take into consideration is the importance of the statement in finalising the contract. If the statement is so important that a party would not otherwise have entered into the contract, the...

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...ract when terms are implied by fact, Hutton v

Warren tells us that the court implied the term as it was common practice by others when the farmer was evicted from the defendants land while the crop was already growing; this then resulted in compensation being due to the farmer for the labour and cost of seeds that were used. Implied terms can also be used to make better sense or clarity of an agreement, in the case of Schawel v Reade, because the statements made lead to the transaction of a horse go through; it means that the statement made by the seller was a contractual term stating that the horse was fit and suitable to be used as a stud. an implied term may also be in a contract to preserve business efficacy as mentioned before about the case regarding The Moorcock.

Terms implied by common law

Terms implied by statute

The relative significance of terms