Keenan and Riches’BUSINESS LAW

Chapter 9The terms of business contracts

Puffs, representations and terms

The first step in determining the terms of a contract is
to establish what the parties said or wrote. That is not
to say that all statements made during the course of

negotiations will automatically be incorporated in the

resulting contract. The statement may be a trader’s

puff, a representation or a term, and, if it turns out to be

untrue, the claimant’s remedy will depend on how the

statement is classified. The differences are as follows:

1 Trader’s puff.If a car is described as ‘totally imma-

culate’ and ‘incredible value’, this is nothing more than

typical advertising exaggeration. We are not expected

to take such sales talk seriously and, consequently,

there is no civil remedy if the statement turns out to be

untrue.

2 Representation.This is a statement of fact made by

one party which induces the other to enter into the

contract. As we have already seen in Chapter 7 ,

the remedy for a misrepresentation is determined by the

type of misrepresentation. You can refresh your mem-

ory by referring to Fig 9.2.

281

Nicolene Ltdv Simmonds(1953)

The claimants placed an order with the defendant for the

supply of 3,000 tons of steel reinforcing bars. The defend-

ant wrote to the claimants to accept the order adding

that ‘we are in agreement that the usual conditions of

acceptance apply’. There were no usual conditions of

acceptance, so the words were meaningless. The Court

of Appeal held that, as the rest of the contract made

sense, the meaningless clause could be ignored.

Figure 9.1The nature of pre-contractual and contractual statements