Contract - Terms - 1 National University of Singapore...

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National University of Singapore Faculty of Law LAW OF CONTRACT 2004/2005 (III) TERMS OF CONTRACT 1. INTRODUCTION/EXPRESS TERMS (a) Distinction between puffery/representation/term: Mere puff (a statement no reasonable person would regard as serious commitment) has no legal effect mere puff. Mere representation is an inducement which the party making it did not undertake to make it good and may bear legal consequences. A term of the contract is legally binding upon both parties and is a statement made with the intention to promise. Test of objective contractual intention where the court will look into various factors: Lapse of time o Short interval between statement which was made and formation of contract increases likelihood of it being a term. Bannerman v. White Oral v. Written o An oral statement cannot be a term if it contradicts a written term in the contract. Parole evidence rule as provided for in Singapore Evidence Act Cap 97 o An oral statement made AFTER formation of contract and not written as a term in the contract is probably a representation. Bannerman v. White Importance o If the statement is so important that the party would not have entered the contract if it was not a term, it increases the likelihood of it being a term. Bannerman v. White Verification o If the party being induced by that statement attempts to verify it with the party making the statement, the statement is more likely to be a contract. (Ties-in with importance. Bannerman v. White ) Statement of opinion o A statement of opinion is unlikely to be a term unless the opinion was given with Special knowledge. Special knowledge 1 1
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o The general principle is that the maker of the statement is, vis-à-vis the other party in a better position to ascertain the accuracy of the statement or has the primary responsibility for doing this, the courts will tend to regard it as a term. As demonstrated here: o Statement less likely be a term where person to whom the statement is being made has special knowledge of the statement. Oscar Chess Ltd v Williams [1957] 1 All ER 325 o More likely to be a term if the maker of the statement has special knowledge of the subject matter of the statement. Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 2 All ER 65 Collateral contracts o Where there is necessary contractual intention, courts might construe a preliminary statement or assurance as a collateral contract or warranty, conferring a right to damages. Esso Petroleum. Ltd. v. Mardon [1976] QB 801 o The above is an exception to the Parol Evidence Rule. Parol evidence rule : One cannot adduce oral evidence to contradict the terms of a written contract. Now this rule is subject to numerous exceptions. (b)
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This note was uploaded on 02/07/2012 for the course LGST 101 taught by Professor Hsu during the Spring '11 term at Singapore Management.

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Contract - Terms - 1 National University of Singapore...

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