ABSTRACT
Once a contract has been formed, it is necessary to define the scope of the obligations which each party incurs.
(Incorporation of terms is covered in Chapter 4.)
THE DISTINCTION BETWEEN TERMS AND MERE REPRESENTATIONS Is a statement part of the contract? Statements made during negotiations leading to a contract may be either:
Terms:
Statements which form the express terms of the contract. As such they constitute promises as to the present truth of the statement, or as to future action. If such a promise is broken (for example, because the statement is untrue) this will be a breach of contract; or
Mere representations:
Statements that do not form part of the contract, but which helped to induce the contract. If these are untrue, they are ‘misrepresentations’.
