1 How do terms arise? 2 Types of terms 3 Misrepresentation 4 How does representation become misrepresentation? 5 Remedies for misrepresentation. Terms. Express terms. Offer + Acceptance. By statute. Implied terms. By court. By custom. 1 How do terms arise?. 1.1 Express terms
1 How do terms arise?
2 Types of terms
4 How does representation become misrepresentation?
5 Remedies for misrepresentation
Offer + Acceptance
By custom1 How do terms arise?
1.1 Express terms
1.2 Implied terms
Jetty(Pier) owner made a contract with ship owner allowing him to moor (unload) ship there.
They knew the ship would be grounded at low tide.
When the ship did ground, it was damaged by a ridge of rock beneath the mud. Ship owner asked for compensation.
Court of appeal: Y. It was necessary to imply such a term to make the contract commercially effective.
Case 2: Hutton v Warren (1836)
A lincolnshire farmer was asked to quit the farmer. He asked the owner to pay allowance for seeds and labor.
Court: Y. It was agricultural custom there.
Case 3: Bakery trade: a dozen means 13 rather than 12.
1.3 Exclusion of implied terms
(1) Terms implied by statute can’t be excluded.
(2) Terms implied by court can be excluded by express terms.
Not vitally important
Not depriving whole benefit
If depriving whole benefit2 Types of terms
2.1 Conditions and warranties
(1) Conditions: go to the root
(2) Warranties: don’t go to the root
2.2 Innominate terms
(1) The term with no name.
(3) Innominate terms have not replaced conditions and warranties.
Case: HK Fir Shipping Co v KK Ltd (1962)
KK, defendant chartered a ship from plaintiff for 24 months. The engines were in poor condition and the crew was inefficient. They lost 5 weeks immediately and another 15 weeks for carrying out the repairs. After repair they still had 20 months to operate. One term saying the ship should be “ in every way fitted for ordinary cargo service”. Defendant cancelled the contract. Plaintiff disagreed and argued it was merely warranty.
Court of appeal:
Innominate term, which could not be classified in advance. The defendant’s whole benefits of the contract were not deprived substantially. There unable call the contract off.
Remedy for misrepresentation
If untrue3 Misrepresentation
3.1 Written contract: terms and representations
(1) Express terms
(2) Statements not in written document are representations.
3.2 Oral contract: terms and representations
(1) Harder to tell a term from representation.
(2) Objective test: opinion of reasonable man
The statement is a term.
Case 2: Ecay v Godfrey(1947)
Case: Bannerman v White (1861)
White’s statement was a term.
Case 1: Chess v Williams (1957)
Williams’ statement was representation.
Harold’s statement was a term.
Case: Esso Ltd v Mardon (1976)
Such a term was implied that the opinion had been made using reasonable care and skill. Mardon was entitled to damages.
Statement of fact
Induced other party
Only 4 situations
(1) The statement must be one of fact.
Case1: Bisset v Wilkinson (1927)
Just an opinion.
The statement was misrepresentation.
(2) The statement must induce other party to make contract
Case: Attwood v Small (1838)
Not misrepresentation as Attwood didn’t rely on it.
(1) Silence normally can’t be misrepresentation.
(2) Exception: 4 situations
Failure to reveal such change was misrepresentation.
The solicitor’s silence was misrepresentation.
Rescind5 Remedies for misrepresentation
(1) 3 situations
(2) Two remedies
5.2 Negligent misrepresentation
(1) Made honestly but unreasonably
5.3 Wholly innocent misrepresentation
(1) Made honestly and reasonably.
(1) If the contract is affirmed
Case: Leaf v Int’l galleries (1950)
N. Too late to rescind it.
(2) If third party has acquired rights
Case: Universal Finance Co. Ltd v Caldwell (1965)
Telling police and AA was sufficient to rescind. If it failed to do so before resale, it couldn’t get the car back.
(3) If subject matter no longer exists.