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Terms - Pre-Contractual Statements
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Terms - Pre-Contractual Statements
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Terms – Pre-Contractual StatementsPre-Contractual Statements
Mere Puff.
Advertising gimmick.
Wouldn’t normally give rise to any legal consequences.
Representation.
Statement of fact which falls short of being a promise.
Can help to make decision to enter a contract.
Remains outside of the contract.
Doesn’t contain a promise as to the truth of the statement.
A false representation, whilst falling short of being a term, may give rise to a remedy
in misrepresentation.
Term.
Does involve a promise as to the truth of the statement.
If a promise is broken, there is a breach of the contractual term.
How Do We Know? Test of Contractual Intention
Is there evidence of an intention by one or both parties that there should be
contractual liability in respect of the accuracy of the statement?
The test of intention is objective.
Heilbut, Symons & Co v Buckleton (1913).
The defendants, Heilbut et al, were merchants during the rubber trade boom of the
1910’s who claimed to underwrite shares in a rubber trading corporation (‘Filisola
Rubber and Produce Estates Ltd’).
The claimant, Buckleton, contacted this corporation to enquire about shares
purchasing, to which a manager at Hilbut et al responded positively, insinuating the
creation of a new rubber company, which persuaded Buckleton to make a sizable
purchase for shares in the organization.
The subsequently formed rubber production company proved to have far fewer
available resources than anticipated and thus suffered greatly in its initial
performance, causing Buckleton to sue for breach of warranty as the company’s
original representation had implicated far greater resources.
At first instance, the Court contended that Heilbut et al had made an innocent
misrepresentation, however, upon appeal it was determined that no fraudulent
misrepresentation had occurred as the defending party had not been ‘reckless’ as to
the truth of the statement regarding their resources pool and further there was no
clear intent that their remarks regarding their resources should amount to a binding
contractual promise to act in parallel to their written agreement.
, Thake v Maurice (1986).
Consumer Rights Act 2015, s50.
Every contract to supply a service is to be treated as including as a term of the
contract anything that is said or written to the consumer, by or on behalf of the
trader, about the trader or the service, if:
It is taken into account by the consumer when deciding to enter into the contract.
It is taken into account by the consumer when making any decision about the service
after entering into the contract.
Anything taken into account by the consumer as mentioned in subsection (1)(a) or
(b) is subject to:
Anything that qualified it and was said or written to the consumer by the trader on
the same occasion.
Any change to it that has been expressly agreed between the consumer and the
trader (before entering into the contract or later).
Without prejudice to subsection (1), any information provided by the trader in
accordance with regulation 9, 10 or 13 of the Consumer Contracts (Information,
Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) is to be
treated as included as a term of the contract.
A change to any of the information mentioned in subsection (3), made before
entering into the contract or later, is not effective unless expressly agreed between
the consumer and the trader.
See section 54 for a consumer’s rights if the trader is in breach of a term that this
section requires to be treated as included in a contract.
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