3 Term.Breach of a term of the contract entitles the
injured party to claim damages and, if he has been
deprived of substantially what he bargained for, he will
also be able to repudiate the contract. The distinction
between a mere representation and a statement which
becomes a term of the contract used to be very import-
ant. Before 1967 damages were not available for a mis-
representation unless it was made fraudulently, and the
only remedy, rescission, could be easily lost. The injured
party, therefore, would be keen to establish that the
statement had been incorporated into the contract,
so that he could claim damages for a breach of a con-
tractual term. This generated a considerable body of
complex case law. The Misrepresentation Act 1967,
however, opened the way for an award of damages for
non-fraudulent misrepresentation and, as a result, the
distinction between terms and representations has be-
come much less important.
It should be noted that the civil remedies in respect
of false statements are complemented by criminal sanc-
tions in respect of unfair commercial practices under the
Consumer Protection from Unfair Trading Regulations
2008 and the Property Misdescriptions Act 1991. The
offences created by these statutory provisions will be
considered in more detail in Chapter 12.
Misleading advertising is also subject to administrat-
ive controls. Under the Control of Misleading Advertise-
ments Regulations 1988 (SI 1988/915) (which imple-
mented an EC Directive on misleading advertising), the
Office of Fair Trading may refer misleading advertising
to the High Court which may grant an injunction to
prevent publication. An advertisement is misleading
under the regulations if it deceives or is likely to deceive
those to whom it is addressed or whom it reaches and,
because of its deceptive nature, it is likely to affect their
economic behaviour, or it injures or is likely to injure a
competitor of the person promoting the advertisement.Types of contractual terms
The terms of a contract delineate the obligations of the
parties and these may vary greatly in importance. Tradi-
tionally, terms have been divided into two categories:
conditions and warranties.1 Conditions.A condition is a major term which is
vital to the main purpose of the contract. A breach of
condition will entitle the injured party to repudiate the
contract and claim damages. The breach does not auto-
matically end the contract and the injured party may
choose to go on with the relationship, despite the breach,
and recover damages instead.Part 3Business transactions
282
Figure 9.2Remedies for misrepresentation