MGSC30H3 Chapter Notes -Rescission, Uberrima Fides, Arbitration Clause
Document Summary
Not every statement communicated during the negotiation process is a contractual term. Contractual term is a provision in an agreement that creates a legally enforceable obligation. It is a promissory statement, the person who makes it voluntarily agrees to do something in the future. 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 does not impose a contractual obligation although it may induce the creation of a contract, it does not form part of that contract. If a non-contractual statement is false, the parties has made a misrepresentation. When a contractual statement is not fulfilled, we say that one of the parties is in breach of contract. Misrepresentation and breach of contract have different legal effects. Pre-contractual representations may result in a form of legal liability (actionable misrepresentation, but not in an action for breach of contract).
