MGSC30H3 Chapter Notes - Chapter 9: Special Relationship, Rescission, Parol Evidence Rule
18 Apr 2014
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Document Summary
Pre-contractual and contractual statements: not every statement communicated during the negotiations process is a contractual term. A statement becomes a contractual term only if it is included in the agreement as a legally enforceable obligation. A contractual term is by its very nature, 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 inducing another party to enter into a contract. By definition, it does not impose a contractual obligation. Misrepresentation: the distinction between contractual terms and pre-contractual representations is especially important if a statement is false. If a non-contractual statement is false, we say that one of the parties has made a misrepresentation. Where a contractual statement is not fulfilled, we say that one of the parties is in breach of contract: this distinction is important because misrepresentation and breach of contract have different legal effects.
