Statements made by the parties in the course of negotiations leading up to the formation of the contract are classified by the court as either representations or terms. A representation is a statement which induces the contract but does not form part of it, whereas a term is a promise or undertaking that is a part of the contract itself. If a representation proves to be false, the remedy will lie in an action for misrepresentation, whereas if a term is broken the remedy will lie in an action for breach of contract. In some cases, a misrepresentation later becomes incorporated into the contract as a term. In such a case the injured party will have two causes of action; one for misrepresentation and the other for breach.
Whether a statement is a representation or a term is primarily a question of intention. If the parties have indicated that a statement is to be regarded as a term, the court will implement their intention. In other cases, the following guidelines may be applied:
A statement is not likely to be a term if the person making the statement asks the other party to check or verify it, as where the seller of a boat stated that it was sound but asked the buyer to have it surveyed. If the statement is made with intention of preventing the other from finding a defect and succeeds in this, the court may consider it to be a term.
Where there is a distinct interval of time between the making of the statement and conclusion of the contract, this may indicate that the parties do not intend the statement to be a term.
A statement is likely to be a term if it is such that the injured party would not have entered into the contract had it not been made.
Where one of the parties possesses superior knowledge and skill relating to the subject-matter, the court may conclude that any statement made by such a party is a term.
Where the agreement has been reduced to a written document, statements appearing in the written contract will normally be regarded as terms. Subject to the matters discussed above, statements excluded from the written contract are likely to be regarded as representations. Nevertheless, the court will look to the intention of the parties to see whether they intended a contract partly written and partly oral.
Notes
statement – заявление, изложение, утверждение
representation – только сообщение/информация
induce – вызывать; индуктировать; побуждать
undertaking – обязательство, гарантия
undertake – обязываться; брать на себя
remedy – средство судебной защиты; средство защиты права
action – иск; судебное преследование
misrepresentation – введение в заблуждение
incorporate – включать; инкорпорировать, предоставлять права юридического лица
injured party – пострадавшая сторона
cause of action – основание для предъявления иска
have a cause of action – иметь основания для предъявления иска
intention – намерение, умысел, цель
indicate – показывать, указывать
implement – выполнять, осуществлять
guideline – деректива
verify – проверять, выверять, сверять
verification – проверка, подтверждение
survey – осматривать
conclusion of a contract – заключение договора
conclude a contract – заключать договор
subject-matter – предмет спора, договора и т.д.
conclude (about) – решать, делать вывод
be reduced to written document – быть составленным в качестве письменного документа
Exercises:
1. Find the equivalents of the following word-combinations:
1. заключение контракта; 2. в ходе переговоров; 3. составлять часть контракта; 4. обязательство; 5. введение в заблуждение; 6. средство судебной защиты; 7. иметь основания для предъявления иска; 8. выполнять намерения; 9. пострадавшая сторона
2. Find the definitions:
1. intention a. the process of taking a case or a claim to a court of law
2. undertaking b. something that you plan to do
3. to implement statement c. to find out if a fact, statement, etc., is true or correct
4. to survey d. to inspect or examine the condition of something
5. action e. a promise to do something
6. to verify f. to take action or make changes that you have officially
decided should happen
3. Fill in the gaps with prepositions where necessary and translate the sentences into Ukrainian:
____ the cause of negotiations; the remedy will lie ____ an action ____ misrepresentation; a misrepresantation later becomes incorporated ____ the contract; the injured party will have two causes ____ action; one ____ misrepresentation and the other ____ breach; the statement is made ____ intention ____ preventing the other ____ finding a defect; succeeds ____ the agreement has been reduced ____ a written document
4. Answer the following questions:
1. What is a statement?
2. What is a representation?
3. What will be the remedy if a representation proves to be false?
4. What will be the remedy if a term of a contract is broken?
5. What causes of action can an injured party have if misrepresentation is incorporated into the contract as its term?
6. Give examples when a statement is likely to be a term of a contract.