ABSTRACT
The previous chapter examined how a binding contract was formed; this chapter will consider what the parties have agreed. What they have agreed to do form the terms of the contract.
9.2 Contract Terms and Mere Representations As the parties are normally bound to perform any promise that they have contracted to undertake, it is important to decide precisely what promises are included in the contract. Some statements do not form part of a contract, even though they might have induced the other party to make the contract. These pre-contractual statements are called representations . The consequences of such representations being false will be considered later (see 10.3 below) but, for the moment, it is suffi cient to distinguish them from contractual terms, which are statements which do form part of the contract. There are four tests for distinguishing a contractual term from a mere representation:
● Where the statement is of such major importance that the promisee would not have made the agreement without it, it will be construed as a term. In Bannerman v White (1861), the defendant wanted to buy hops for brewing purposes and asked the plaintiff if they had been treated with sulphur. On the basis of the plaintiff’s false statement that they had not been so treated, he agreed to buy the hops. When he discovered that they had been treated with sulphur, he refused to accept them. It was held that the plaintiff’s statement about the sulphur was a fundamental term (the contract would not have been made but for the statement) of the contract and, since it was untrue, the defendant was entitled to repudiate (see 11.11 below) the contract.
