Consumer Tribe
Topics: Contract, Contract law, Contractual term, Sale of Goods Act 1979 / Pages: 27 (6551 words) / Published: Dec 5th, 2012

Business Law

David Kelly, Ann Holmes, Ruth Hayward 5th Ed

CHAPTER 6
CONTENTS OF A CONTRACT
This chapter will consider what the parties have actually agreed to do.
What they have agreed to do form the terms of the contract.

6.1 CONTRACT TERMS AND MERE REPRESENTATIONS
As the parties will normally be bound to perform any promise that they have contracted to undertake, it is important to decide precisely what promises are included in the contract. Some statements do not form part of a contract, even though they might have induced the other party to enter into the contract. These pre-contractual statements are called representations. The consequences of such representations being false will be considered below (see below, 7.3) but, for the moment, it is sufficient to distinguish them from contractual terms, which are statements which do form part of the contract. There are four tests for distinguishing a contractual term from a mere representation, as follows:

Where the statement is of such major importance that the promisee would not have entered into the agreement without it, it will be construed as a term. In Bannerman v White (1861), the defendant wanted to buy hops for brewing purposes and he asked the plaintiff if they had been treated with sulphur. On the basis of the plaintiff's false statement that they had not been so treated, he agreed to buy the hops. When he discovered later that they had been treated with sulphur, he refused to accept them. It was held that the plaintiff's statement about the sulphur was a fundamental term (the contract would not have been made but for the statement) of the contract and, since it was not true, the defendant was entitled to repudiate the contract.

Where there is a time gap between the statement and the making of the contract, the statement will most likely be treated as a representation.

In Routledge v McKay (1954), on 23 October, the defendant told the plaintiff that a motorcycle was a 1942

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