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Contract law

Contractual terms

Contractual terms and representations

A statement made during negotiation may be a term or merely a representation:

 It is important to know whether the statement is a term or a representation
because the remedies available to a wronged party will be different.

 If the representation is included in the contract as one of its terms and it is then
found to be untrue the party misled has a remedy for breach of the term as well
as for the misrepresentation.

 If the representation is not a term of the contract the party misled can only claim
remedies for the misrepresentation.

 A term is part of the contract.

 A representation is something said by the offeror to induce the offeree to enter
into the contract. It becomes a term once it is included in the written contract or
is an important part of the contract i.e. one on which the other party relies.

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