112 Chapter 4Misrepresentation, mistake, duress and illegality
The weaker the statement, the more likely it is to be a representation.The reliance shown to be placed upon the statement
If one of the parties demonstrates that the statement is considered to be vitally important
then the statement is likely to be a term.Schawel vReade (1913) (House of Lords)The claimant was considering buying a horse to be used for stud purposes. The defendant
said: ‘You need not look for anything; the horse is perfectly sound. If there was anything
the matter with the horse I would tell you.’ Three weeks later the claimant bought the horse,
which turned out to be utterly useless for stud purposes.
HeldThe defendant’s statement was a term. It was so strong that it was the basis on
which the offer and acceptance were made.Ecay vGodfrey (1947)The claimant bought a boat for £750. Before selling the boat, the defendant said that the
boat was sound and capable of going overseas. However, he also advised the claimant
to have it surveyed before making the purchase. The claimant bought the boat, without
having it surveyed, and soon discovered that it was not at all sound.
HeldThe statement that the boat was sound was only a representation. It was not a part
of the contract because it was a very guarded statement.Bannerman vWhite (1861)The claimant, a merchant who traded in hops, sent around a circular to all the hop farmers
with whom he dealt. The circular said that the claimant would no longer buy hops which
had been treated with sulphur, because the Burton-upon-Trent brewers would not use
them. When later buying a consignment of hops from the defendant, the claimant asked if
they had been treated with sulphur, adding that if they had he would not buy them at any
price. The defendant said that they had not been treated with sulphur, but in fact some of
them had.
HeldThe defendant’s statement was a term. The claimant had demonstrated that he
considered the statement to be vitally important.
CommentThe defendant’s statement was not a term just because the claimant con-
sidered it to be vitally important. It was a term because the claimant demonstrated that
he considered the term to be vitally important. The reasonable person cannot objectively
deduce what the parties are thinking unless the circumstances give some indication of
what they are thinking.