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The legal concepts of express terms, mere representations, and collateral contracts in pre-contractual situations. It discusses the importance of determining promissory intent in pre-contractual statements, the implications of misrepresentation, and the elements required to establish a collateral contract. Through various case studies, this document provides insights into the application of these concepts in contract law.
Typology: Schemes and Mind Maps
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Express Terms:
Terms v Mere representation:
*****To determine whether a pre-contractual statement is promissory in character:** l The intention of the party The court will try to ascertain the objective intention of the parties, and ask whether a reasonable person would interpret the statement as being promissory in nature: Oscar Chess v Williams
l The time of the statement The proximity between when the statement was made and entry into the K may help to determine intention: Harling v Eddy
l The content of the statement If the statement is of great significance to the K, this evidences a clear intention to be bound: Coucham v Hill {1947} There is no doubt that the P did make some attempt of the kind in order to protect himself from the risk of buying an animal that was not of the kind described. The real question is, what did the parties understand by the question addressed to and the answer received from both vendor and auctioneer. Thus, the court’s task is to try to ascertain the objective intention of the parties. The more important the content of the statement, the more likely it is that the parties intended it to be a term.
l The knowledge and expertise of the parties
The truth is that a collateral contract, which may be either antecedent or contemporaneous, being supplementary only to the main K, cannot impinge on it, or alter its provisions or the rights created by it; consequently, where the main K is relied on as the consideration in whole or part for the promise contained in the collateral contract, it is a wholly inconsistent and impossible contention that the order party is not to have the full benefit of the main contract as made… in that case, it is not collateral, but dominant…
Shepperd v Ryde Municipal Council (1952) The reluctance of courts to hold that collateral warranties or promises are given or made in consideration of the making of a K is traditional. But a chief reason for this is that too often the collateral warranty put forward is one that you would expect to find its place naturally in the principal contract. In this case, the rule is, the subject matter of the collateral contract was something separate to the main K and made it easier to establish the claim.
JJ Savage & Sons Pty Ltd v Blakney (1970) In consideration of whether there is a collateral contract, except for the promise’s reliance on the promise, the intention of the promisor, i.e., the representation is intended to be promissory and not merely representational, is also important. Thus, where there is a statement of opinion, it may be hard to prove the existence of a collateral contract.
Incorporation of Terms
****Signed contracts: the effect of signature:**
L’Estrange v Graucob [1934] In case in which the K is contained in a railway ticket or other unsigned document, it is necessary to prove that an alleged party was aware, or ought to have been aware, of its terms and conditions. These cases have no application when the document has been signed. When a document containing contractual terms is signed, then, in the absence of fraud and misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not.