Terms of Contract & Privity

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Jo books a holiday to Italy for her and her family through a tour operator based in the UK. She specifies that the accommodation must provide facilities for young children. When Jo and her family arrive they are told that their specified accommodation is no longer available. The tour company offer Jo alternative accommodation located in the city centre. Due to its location the alternative accommodation does not provide any facilities for children; in fact, guests must be at least 18 years old in order to stay at this alternative accommodation. 

Jo brings an action for breach of contract against the tour company claiming damages for the ruined holiday for herself and on behalf of her family. 

Discuss the legal issues.

This question involves a discussion of the law relating to the contents of the contract and to third parties. I will begin by analysing the contents of the contract between Jo and the tour operator in order to distinguish the express terms of the contract and its types from representations, allowing us to identify the consequent actions that can be taken in the case these have been breached, and if Jo can in fact bring an action for breach of contract against the tour company. The second issue I will then discuss is whether Jo and her family are able to sue, the remedies they are entitled to by whom and for whom, following the principle of privity of contract. In the question, we are only told that Jo books a holiday and that after having specified that the accommodation had to provide facilities for young children, the tour company fails to do so. We are not provided with enough information to determine whether or not the statement specifying about the accommodation forms part of the contract. We do not know the method or context by which it was made and we have not been facilitated any information by which we could conclude that this was an absolute decisive condition of the contract. Therefore, I am going analyse the different possibilities and outcomes according to the law. During the course of negotiations, parties may make statements or assurances a Court may later have to decide whether they formed part of the contract or whether they are considered to be a mere representation. A representation which proves false, renders the contract voidable for the benefit of the party mislead and, if made fraudulently or negligently may give raise to damages in tort. However, it cannot give raise to an action for breach of contract, as this can only be reached by the breach of a contractual term. This is why we have to establish whether Jo’s statement was indeed a term or a representation, as if it were a representation, she wouldn’t be entitled to have brought the breach of contract she has against the tour company. How can we distinguish then if it was a representation or a term? The distinction between representations and terms is generally decided by considering questions as to what the intention of the parties was, and if the statements made intended to raise expectations which the contract should support. In the leading case of Heilbut, Symons & Co. v. Buckleton, the House of Lords asked the following question: ‘’Was there evidence of an intention by one or both parties that there should be a contractual liability in respect of the accuracy of the statement?’’ In Heilbut, the House of Lords held that there had not been a breach of contract, but merely a representation because there was no intention of either or both parties that there should be a contractual liability in the accuracy of the statement. However, in Bannerman v White, following that the test is one of the parties’ intentions –and all evidence is relevant in determining those intentions, rather than there being a decisive secondary test- lead to the jury to find that the statement was intended by the parties to be part of the contract of sale. Past cases like these ones, have shown the difficulty to ascertain intention in practice...
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