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CHAPTER 5// CONTRACT: TERMS

Pre-contractual statements:

1. Mere puffs: statements which have no legal effect; vague because of imprecision or
exaggeration
Eg. Dimmock v Hallet: The Court of Appeal held that although the statement about the land
being "fertile and improvable" was merely a "flourishing description" and did not entitle the
buyer to rescind. Eg. An ad stating ‘the best restaurant in town’

2. Representations: statements made before or at the time a contract is formed. They concern
some matter related to the contract.
- Contract is not breached if the representation is untrue
- Injured party may have a remedy under the law of misrepresentation, but cannot initiate
for a breach of contract

3. TERMS Statements which form part of a contract.

 TERMS VS REPRESENTATION
- Similarity: Both originate as oral or written statements made beore a contract is formed
- The main criterion for distinguishing them is the INTENTION OF PARTIES

5 GUIDELINES
1. Time when the statement was being made
2. Importance of statement/ Maker’s emphasis
3. Maker’s special knowledge
- When the maker of statement has a greater knowledge/in a better position to know the
true facts concerning the statement as compared to the other party, it is more likely that
the statement is a term.
- Rationale: the other party would be dependent upon the maker of the statement for its
accuracy.

4. Invitation to verify the statement


- If the maker of the statement invited the other party (what about in the case of a 3rd
party?) to verify the truth of the statement made, then the statement is more likely to
be a representation.
- Rationale: maker does not intend contractual liability to result from his statement when
he invites another party to verify the truth of the statement made.
-
- Conversely, if the maker dissuades the other party from verifying the truth of the
statement made, then the statement is more likely to be a term  intends contractual
liability to result from his statement

5. Written Statement
If reduced into writing, more likely a term

 EXPRESS AND IMPLIED TERMS