LAW 122 Chapter 9: Chapter-9-Representations-Terms.doc

• School: Ryerson University
• Department: Law and Business
• Course: LAW 122
• Professor: Henry Ojambo

Document Summary

Not every statement communicated during the negotiation process is a contractual term. A statement becomes a contractual term only if it is included in the agreement as a legally enforceable obligation. The person who makes it voluntarily agrees to do something in the future. In contrast, a pre-contractual representation is a statement one party makes by words or conduct with the intention of inducing another party to enter into a contract. It may induce the creation of a contract, but it does not form part of the contract. The distinction b/t the contractual term and pre-contractual representation is especially important if a statement is false. The distinction is important b/c misrepresentation and breach of contract have different legal effects. Pre-contractual representation may result in a form of legal liability, such as actionable misrepresentation, but not in an action for breach of contract.