Collateral contracts
A representation may in some circumstances form part of a collateral
contract, where it would not be included in the main agreement – City and
Westminster Properties Ltd v Mudd.
Questions
1 Smith is talking to Jones one day about motor-cycles, and says that he has a model which
is two years old and has done 8,000 miles. Jones decides to buy the cycle and they draw
up a written agreement which states their names and addresses, the date, the type of
motor-cycle and the price. Jones pays and takes the motor-cycle away.The next day
Jones goes on holiday and checks in at the Seaview Hotel. He leaves his belongings in
the hotel bedroom, placing some valuables in the safe provided. On his return the safe
has been opened and the contents removed.The hotel claims no responsibility because
of a term on the back of the bedroom door exempting them from liability for theft of
clients’ belongings. On his return, a week later, Jones has the motor-cycle serviced, and
is informed by the mechanic that the machine is older than he believed.
Advise Jones regarding any claim he may wish to make against Smith regarding the
motor-cycle and against Seaview Hotel regarding the valuables which were taken from
the safe.
2 There are occasions when terms are implied into contracts which have not been
discussed by the parties. Critically consider the circumstances in which this is likely to
occur.
OCR 2006
3 ‘What a man sees and signs is what he has agreed.’ To what extent is this an accurate
statement of the incorporation of contractual terms?
4 Alex buys a camera from Brillpics Ltd which is described on the packaging as ‘ideal for
all season general purpose photography.’ After using the camera on a ski-ing holiday Alex
discovers that his pictures are all very faint.When he returns to Brillpics Ltd the
manager says that the camera was not intended for use in low temperature winter
conditions, and that he should have bought a more expensive model. Alex also buys a
second hand motor cycle from a fellow holiday maker, Callum. Alex purchases this
knowing that Callum is an experienced engineer. However, on his first long journey Alex
finds that the engine runs erratically and that the motor cycle will only move slowly.Alex
now wishes to return the motorcycle to Callum.
Advise Alex of any remedies which may be available to him regarding the camera and
the motor cycle.
OCR 2002
108 Contract law