Effect of Oral Statements on Written Contracts: Misrepresentation or Contract Term?, Exams of Contract Law

Download Effect of Oral Statements on Written Contracts: Misrepresentation or Contract Term? and more Exams Contract Law in PDF only on Docsity! Misrepresentation How can a precontractual oral statement form part of a written contract? 1. As a term included in the contract 2. As a misrepresentation 3. Collateral Contract – irrelevant 4. In tort – 2nd year. Whether something is a term or a representation relies on what the parties really meant when they said it. The factors and presumptions that the court asks are: 1) Statement is reduced to writing - A written statement is more likely to be a legally binding contract than a simple verbal promise. 1934's L'Estrange v. F Graucob Ltd. case is a significant legal precedent. When the statement is included in a signed document, the presumption is strengthened. Parties can claim that there was an oral agreement that goes against what is written down if a statement is written down. According to the "parole evidence" norm, such assertions are not admissible in court. It is possible to contend that an unwritten word is a form of representation. 2) Specialist knowledge or abilities - If the speaker contends or possesses specialised skills or knowledge, the statement may be considered a term. Dick Bentley Productions Ltd. v. Harold Smith (Motors) Ltd. (1965) and Oscar Chess v. Williams (1957) are two well-known cases that illustrate this concept. Dick Bentley's statement was determined to be a term because it came from a car salesperson who claimed to have specialised expertise or experience. Oscar Chess, a private vendor with little knowledge of the issue, made the assertion. 3) Intention - The courts will make every effort to implement the intentions of the litigants. The implementation of this measure will ensure its fairness. As the case of Heilbut, Symons & Co v. Buckleton [1913] demonstrates, there are several factors concerning the timing and manner of a statement's utterance that assist courts in determining whether said statement constitutes a term or a claim. 4) Lapse of time - The chances that a statement will be seen as a claim go up as the time between making the statement and making the contract goes up. The 1954 case of Routledge v. McKay demonstrates that a statement made anterior to the finalisation of a contract is unlikely to be regarded as a contractual term. Even if the answers are all yes, the chances of damage are too low. Instead, we will move under misrepresentation. Once it becomes clear that a breach of contract has occurred due to a promise rather than a contractual term, the aggrieved party retains the right to file a lawsuit for misrepresentation. As it is based on fallacies, this factor exacerbates the situation and hinders post-event consensus among individuals. It is a statement made with the intention of persuading the other party to consent to the contractual terms through deception. The contract becomes unlawful, allowing the aggrieved party to terminate its obligations under the agreement. Three conditions must be met to establish that a person has provided fraudulent information. 1. A clear false statement must have been made. Establishing a sufficient level of certainty is essential for ensuring contractual compliance. The terms in question must be sufficiently explicit for a party to establish the validity of their claim. In Dimmock v. Hallet (1886), the court determined that the term "improvable" used to characterise the land was ambiguous and therefore insufficient to serve as a legal claim. 2. The fraudulent statement has to be legal or factual. Only assertions that can be classified as true or false at the time they are made: Mellish LJ argued in the case of Beattie v. Lord Ebury (1872) that a statement regarding the future occurrence of an action cannot be regarded true or false at the time it is made. Bissett v Wilkinson [1927] shows why a sheep farm seller's statement is not factual. The vendor told the buyer that the land could support 2,000 sheep in his professional opinion. The vendor was ignorant of the land's capability because it had never been used for this purpose. Action against the vendor failed. The statement was taken as a genuine opinion. If it can be shown that a reasonable person with the same knowledge as the person making the statement could not have truly maintained such a view, then a statement of opinion may be misrepresented. When there are disparities in terms of competence, comprehension, and bargaining power, there is misrepresentation. In Esso Petroleum Co Ltd v. Mardon (1976), Esso and Mardon entered into an agreement for the sale of a fuel station. Esso estimated that the petrol station would sell 200,000 litres of unleaded annually. The fact that the petrol station was inaccessible from the main road passed unnoticed. Mardon acquired a station, but consumer interest and subsequent sales were below expectations. As a result of their knowledge, they provided false information. In this scenario, Scoop's was in the earliest phases of establishing itself as a web developer and faced uncertainty regarding the best course of action. Regarding the increase in prospective clients, he provided false information. 3. The deceptive statement must induce the other party to enter the contract. The agreement ought to be based on the false assertion. Was the presence of the name "Bugatti 1939" and the assurance that the Rolls Royce was in outstanding condition sufficient to convince Gareth to sign the contract? If the action was indeed the impetus, it is highly probable that the individual's claim will fail once the pertinent facts are revealed. According to the precedent established in Edgington v. Fitzmaurice (1885), it is necessary to show that the false statement at issue directly influenced the other party's decision to engage into a legally binding contract. It is required to demonstrate that the statement influenced the other party's decision to engage into the contract. Although it may not have been the sole factor in the individual's decision to enter into the contract, it is reasonable to conclude that it played a significant role (Raiffeisen Zentralbank Osterreich AG v. Royal Bank of Scotland plc, 2010). Types of misrepresentation: Fraudulent: The tort of deceit allows damages for fraudulent misrepresentation. In Derry v Peek (1889), fraud and negligence were clearly distinguished. To prove fraud, the defendant must know the statement is false, not believe it, or be irresponsible. Lord Herschell defines fraud as the act of making a false statement with the intent to deceive or making a false statement unknowingly. Fraudulent: According to the 1967 Misrepresentation Act, the term "fraud" is statutorily defined. The legislation allows individuals who have suffered injury to file a lawsuit. The individual making the assertion must demonstrate a sincere belief in its veracity and provide a solid rationale to support it.