6 Incorporation of terms
We have seen that a contract may be written or oral or a mixture of both. If
a problem arises, it may become necessary to know exactly what its terms
are. This may seem obvious in the case of a written contract, but it could
be, for instance, that a crucial term was forgotten to be included, or that
some terms were more important than others. With an oral contract, it is
necessary to discover what was in fact said. A contract may be partly oral
and partly written, for example where a ticket is bought for a train or bus,
where much of the negotiating was spoken face to face, but with the ticket
subject to a set of standard written terms. Here, as in other areas of contract
law, the court attempts to look through the eyes of a reasonable person to
give effect to the intentions of the parties.
Terms and representations
We need to know whether a statement is incorporated as a term of the contract,
or a mere representation – that is an observation made during the course of
negotiations. The importance of this is that the remedies available for breach of
a term of a contract are different from those for misrepresentation. Various
guidelines have been developed by the courts to help decide whether a
statement is really a term of a contract or a representation.
A representor with special knowledge
Generally more importance is placed on representations made by someone
who has expert knowledge on a subject than on a similar statement made
by an amateur. The following two cases illustrate this. In the first case the
defendant was an individual selling his car to a dealer. In the second case
the defendant was a dealer.
‘What exactly did we agree?’