Material statements made by the parties during negotiations leading up to a contract may constitute either contractual terms or mere representations . A contractual term is a statement by which the parties intend to be bound and which therefore forms part of the agreement. A mere representation is a statement by which the parties did not intend to be bound but which nonetheless induced the contract. 1
A mere representation is a statement:
(a) of fact, (b) made by one party to the other, (c) during negotiations leading to a contract, (d) which was intended to operate, and did operate, as an inducement to enter into
a contract, but (e) which was not intended to be a binding contractual term.