The difference between terms and representations 113The relative knowledge of the parties
A party who has more knowledge about the subject matter of the contract is likely to make
terms. A party with less knowledge is likely to make representations. For example, in Oscar
Chess LtdvWilliams (1957)a customer traded in a car to a car dealer, saying that the car
was a 1948 model. In fact, the car was a 1939 model. The customer did not know this
because the car’s documents said that it was a 1948 model. The customer’s statement was
only a representation because the dealer was as well placed as the customer to know the
true age of the car. By contrast, in Dick Bentley (Productions) LtdvHarold Smith (Motors)
Ltd (1965)a motor dealer sold a car to the claimant, saying that the car had only done 20,000
miles since having a new engine fitted. In fact the car had done 100,000 miles. The dealer’s
statement was a term. The dealer, with his greater knowledge of cars, had much more
chance of knowing that the statement was untrue than the claimant had.
It is important to remember that the tests we have used to distinguish terms and repre-
sentations are useful only to indicate what the parties seemed to have intended. In Heilbut,
Symons & CovBuckleton (1913)Lord Moulton said that the various tests were valuable
but not decisive. The real test was the apparent intentions of the parties, which could be
deduced only by looking at all of the evidence.
Figure 4.1 gives an overview of how terms and representations are distinguished.
Figure 4.1Was a statement a term or a representation?