“The terms of a contract give substance to a parties’ obligation.” (Taylor & Taylor. Contract Law Directions (2007))
Every contract contains terms. The nature and extent of these terms defines each party’s obligations and rights under the contract.
It can sometimes be difficult to decipher what are the terms of a contract. This is particularly so with oral contracts. The problem is that not all pre-contractual statements are terms. They could be representations or mere “puffs”.
Every contract contains terms. The nature and extent of these terms defines each party’s obligations and rights under the contract.
It can sometimes be difficult to decipher what are the terms of a contract. This is particularly so with oral contracts. The problem is that not all pre-contractual statements are terms. They could be representations or mere “puffs”.
A mere puff is a statement often associated with advertising. Another way of explaining this is “salesman’s hype” or hyperbole. These are statements that plainly exaggerate and are not intended to be taken seriously. The important point about them is that they have no contractual effect and no legal consequences.
Representations
A representation is a statement that is intended to induce someone into a contract. It is not a term of the contract; therefore it does not have contractual force. Unlike a mere puff, representations do have legal consequences. The area of misrepresentation is outside the ambit of this syllabus, but you will study this on the LLB.
How to distinguish between terms, puffs and representations
Unfortunately, there is no set formula to identify terms. The courts will make a decision using the objective approach to assess the intentions of the contracting parties.
“The intention of the parties can only be deduced from the totality of the evidence, and no secondary principles of such a kind can be universally true.”( Heilbut, Symons & Co. v Buckleton [1913] AC 30)
Express terms and implied terms
Many contracts are made up of a mixture of express and implied terms.
Students often make the mistake of thinking that express terms have to be written. This is not the case. An express term is one that is expressed in some way.
Terms can be implied into a contract in a variety of ways. Probably the most important in practise are those implied by statute.
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