LAW 122 Lecture Notes - Lecture 8: Parol Evidence Rule, Uberrima Fides, Efficiency Ratio
15 Apr 2017
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It"s hard to identify which part of the parties" statements are part of the negotiations and which are part of the actual contract. Therefore, we need to distinguish contractual terms and pre-contractual representations. A statement becomes a contractual term only if it"s included in the agreement as a legally enforceable obligation. A contractual term is a promissory statement. The person who makes it voluntarily agrees to do something in the future. A pre-contractual representation is a statement one party makes by words or conduct with the intention of including another party to enter into a contract. It doesn"t impose a contractual obligation nor form part of a contract. The distinction between both is important if a statement is false. If a non-contractual statement is false, we say one of the parties has made a misrepresentation. When a contractual statement isn"t fulfilled, we say that one of the parties is in breach of contract.
