ABSTRACT

In this chapter and Chapter 6, it is proposed to consider the issue of judicial construction of contracts with a view to the allocation of risks of loss. A preliminary issue is to identify those statements made in the course of negotiations which are to be classified as terms of the contract. In this regard, it is important to distinguish between terms and representations. Terms are promises which form part of the contract, the breach of which will give rise to an action for damages for breach of contract or, in some cases, repudiation of the contract. In contrast, representations are statements which are capable of inducing a contract and on the facts appear to have done so, but which do not necessarily become part of the contract itself.