TERMS OF CONTRACT REPRESENTATION CONTENTS

1.0       Introduction

2.0       Objectives

• Main Content
• Representation
• Contract term and representation

4.0       Conclusion

5.0       Summary

6.0       Tutor-Marked Assignment

7.0       References/Further Readings

 INTRODUCTION

A representation is a statement made by one party to the other before or at the time of contract, with regard to some existing fact or to some past event, which is one of the causes that induced the making of the contract. It follows from this definition that a statement is not a representation if it is one of law, opinion, intention or of future event. Nor is a representation material if it does not induce a contract, for example, if the party to whom it is made (the representee) did not believe it, or ignored it, or did not hear or understand it, or forgot all about it.

 OBJECTIVES

At the end of this unit you should be able to identify what statement amount to representation in a contract.

You should also know what the effect of representation is in a contract.

 MAIN CONTENT 

• Representation & Terms

A representation does not induce a contract if the representee afterwards make his own investigation to test the truth of the statement, Attwood v Small (1838) 6 C1. And Fin 232. However, a representation induces a contract a contract if, though given an opportunity to test its veracity, the representee does not utilize that opportunity, Redgrace Hurd (1881) 20 Ch. 1; Sule v Aromire (1951) 20 N.L.R. 20. But as long as a representation is one of the factors that induce a person to enter into a contract, it is immaterial that there were other including factors as well. Thus, in Edginton v. Fitzmaurice (1885) 29 Ch. D 46, the plaintiff was induced to tale debentures in a company partly by misstatement in the prospectus and partly by his own incorrect belief about how the debentures would be secured.

Not everything that’s said during the negotiations for a contract end up being actual terms of the contract; some information only amounts to a representation. Suppose you buy a car from a second-hand car dealer. He tells you the car has alloy wheels. You buy it, but you later discover the wheels aren’t alloy, and they are starting to rust. If the car having alloy wheels was a term of the sale contract, then clearly the dealer has breached the contract and you can sue him. But if it was just a representation, you might have more difficulty suing him. Remember, if it’s a term, the buyer always wins and always gets damages!

These four factors can help us distinguish between a term and a representation: Relative knowledge: Does one party have expert knowledge of the subject matter? In our example, if a car dealer tells you something about a car, it’s more likely to be a term; but

if you tell the dealer something, it’s more likely to be a representation.

Reliance: Did one party obviously rely on what was said when they entered into the contract? If you were particular about wanting a car with alloy wheels, if you told the dealer that and if you made it clear you were buying the car because of its alloy wheel- then it’s more likely to be a term of the contract.

The strength of the statement: If it’s strong, it’s more likely to be a term (unless both parties understood that it wasn’t!). In one well-known case, the seller said, “there’s no need to inspect the horse, I assure you it’s a good horse”. That’s a pretty strong statement, and the court held it to be a term of the contract.

Timing: Did the statement immediately precede the making of the contract? If the seller said “this car has alloy wheels” and you immediately said “I’ll buy it right now”, then the alloy wheels are more likely to be a term of the contract.

 Exemption Causes And Unfair Terms

Sometimes a party to a contract will include a term designed to exclude or limit his liability in the event of a breach of contract. Such a term might read “X plc is not liable for any property damage however caused”, or X plc will only accept liability up to the amount of £50”. This might be a problem if one party is, for example, a big company,  and the other is an ordinary customer: the parties have unequal bargaining power, so the stronger party might be able to take advantage of the weaker party. The law does its best to level the playing field here. If a party is trying to rely on an exemption clause, they have to show that the other party specifically agreed to it at the time the agreement was reached. We also have the Unfair Contract Terms Act 1977, the main provisions of which are:

You can’t exclude liability for personal injury which results from your negligence. Exemption clauses have to be reasonable. It the court thinks the term in question is unreasonable, that term will be void. You can’t exclude liability for defective goods supplied  to  a  consumer  (that  it,  a  non-business  user).  Contracts  can’t  be  altered unilaterally, i.e. without the agreement of the other party. In case you’re wondering what ‘reasonable’ means here, that Act actually tells us that: the term must be “a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or it in the contemplation of the parties when the contract was made”. Clear as mud? Again, it comes down to making a judgment on the specific facts of each case.

  Conditions

Conditions are terms that that are considered to be critical to a contract, the breach of which may entitle a party to terminate the contract and seek redress from the courts. Poussard v. Spiers and Pond (1985-76) L.R. 1 Q.B.D. 410.

Warranties: Warranties are generally considered to be terms that while of importance in their own rights does not destroy a contract cannot be terminated by the injured party. Ter Neuzen v. Korn (1995) 3 S.C.R. 674

Exemption Clause: It is now common in contracts to see a party seeking to limit or remove liability with respect to particular aspects of that party’s performance of its contractual obligations. A party relying on an exemption clause that limits or excludes liability must from the start demonstrate that the clause is incorporated in the contract (by signature, notice or course of dealing) governing his performance of the contract and that it provides protection against the consequences of the breach of contract for which he is accused. Unfortunately if these considerations are established in favour of the person in breach, there are still several hurdles that must be overcome in order to establish the operability of the exemption clause. The law of exemption clauses has been revolutionized by Unfair Contract Terms Act, which precludes exemption clauses which purport to exempt liability for personal injuries caused by someone acting negligently. Further, where damage has been caused to property excluding liability on the party of a negligent party, this can only be relied upon where notice of the exemption clause has been reasonable. Roger Rahamut and National Insurance Property Development Company Limited v. Airport Authority of Trinidad and Tobago H.C.A. No. S-732 of 1995

 Contract Term And A Mere Representation

The remedy available between a term of the contract and a mere representation when a breach occurs is an important distinction in the two terms. In a contract, a breach of the terms will entitle the aggrieved party to sue and obtain a remedy in damages. The party aggrieved may also obtain remedy of both damages and repudiation of the contract.

Where there is a mere representation, there is no real remedy, but the aggrieved party can bring an action for misrepresentation. Misrepresentation can be made fraudulently or innocently. It can also be made negligently. 

Misrepresentation is fraudulent where a person deliberately told a falsehood, which induces the plaintiff to enter into the contract, and the remedy will be in damages. At common law, there is no remedy for innocent misrepresentation, but there is some remedy in equity. The decision in Hedley Byrne & Co. v. Heller and Partner (1964) AC 465; Agbonmgbe Bank Ltd v. C.F.A.O Ltd., (1966) 1 All NLR which was applied to the same situation involving negligent misconduct, created ‘negligent misrepresentation’ as a third category of misrepresentation known as negligent misrepresentation. The House of Lords held that in certain circumstances, damage could be obtained for negligent misstatements. In the case, Hedley Byrne, a firm of advertising agents, who had placed orders for £8000-£9000 on behalf of a client, wanted to know whether the company, Eastpower, was credit-worthy and they ask their bank. The National Provincial Bank to find out. The National Provincial Bank got in touch with Hellers and Partners and informed ‘in confidence and without responsibility on our part’ that Eastpower were good for £10, 000 per annum on advertising contracts. Relying on the statement, Hedley Byrne placed further orders on television and in newspaper on behalf of Eastpower Ltd. and as a result, lost £17, 000, when shortly thereafter, Eastpower went into liquidation. The Court of Appeal held in the circumstances that the respondents owned a duty of care to the appellant and these had been a breach of this duty by negligence applicable in preparing the financial report. The court laid down the principle applicable to negligent misstatement thus:

“If in the ordinary course of business or professional affairs, a person seeks advice or information from another, who is not under contractual or information from another, who is not under contractual fiduciary obligation to give the advice or information, in the circumstances in which a reasonable man so asked would know that he was being trusted, or that his skill or judgment  was being relied on, and the person has chosen to give information without clearly so quantifying his answer to show that he does not accept responsibility, the person relying on accepts a legal duty to exercise such as the circumstance require and for a failure to exercise that care, an action for negligence will lie if damage result”. 

To determine whether a statement is a term or mere representation will depend on:

• The stage of the transaction the crucial statement is made, statement made at the preliminary stages of the negotiation would not be regarded as a terms of the contract, but mere representations:- The test is not consistent. In Routeledge v. Mckay (1954) 1 WLR 615 the court held that the statement was a mere
• Where the oral statement was later reduced into writing. The connection is that where there was an oral agreement, which was subsequently reduced into writing, any terms contained in the oral agreement not contained in the written document will be regarded as a mere representation.
• Where the person who made the representation has special or superior knowledge, skill as compared to the other party, the statement is to be taken as a term of the contract. Conversely, where a person with less knowledge makes the representation, it is regarded as a mere representation.

Some judicial decisions had thrown some light on the way of distinguishing mere representation from the ‘term’ of the contract. For instance, a statement will not be regarded as a term of the contract if the person who made the statement requires the other party to verify the truth of the statement. This is illustrated in Ecay v. Godfrey (1947) 80 LI. L Rep. 286. In this case, a seller of a boat said it was sound but advised the buyer to examine it. The court held that the advice negative any intention to warrant the soundness of the boat. In another case of  Shawel  v.  Reade  (1931)  21.  R.  81  see  all  Bannerman v. White (1861) 10 CB. 844, the plaintiff wanted to buy a horse for breeding purposes and started examining the horse for sale. The defendant interrupted him saying ‘You need not look for anything’ the horse is perfectly sound’. The plaintiff bought the horse and three weeks later, he discovered it was not suitable for stud purposes. The court held that statement was a term of the contract.

 The Nature Of Contractual Terms

The nature of the contractual terms differs from one contract to the other and they are not of equal importance. A term may be of major importance and any breach could lead to a discharge, while other terms may be relatively minor, whose breach could only result in the award of a mere damages. For many years, various terms have been used to represent the various categories of contractual terms and liabilities. The following terms are common:

 Condition Precedent and Subsequent

A condition can either be a:

• Condition Precedent, that is the sine qua non to getting the thing or condition subsequent which keeps and continues the thing. One of the fundamental principles of the law of contract is that the parties must reach a consensus in respect of the terms thereof, otherwise the contract cannot be regarded as binding and enforceable. It was held in Tsokwa Oil Marketing Co. v. B.O.N Ltd. Nigerian Bank for Commerce and Industry v. Integrated Gas (Nig.) Ltd. (2000) 8 NWLR (pt. 613) 119, that where a contract is subject to the fulfillment of certain specified terms and conditions, the contract is not formed and not binding unless and until those terms and condition are complied with. Once a condition precedent is incorporated into an agreement, the condition must be fulfilled before the effect can Tsokwa Oil (200) NWLR 11 (pt. 777) 163, Sparkling Breweries Ltd. v. UBN (2001) 15 NWLR (pt. 737) 539 Okechukwu v. Onuorah (2000) 5 NWLR (pt. 691) 597.
• Case, the whole negotiation on the contract connotes that it was made conditional. Exhibit 75 gave terms and conditions to be met and all the parties agreed thereto which discussed the appellants claim. The appellant appealed to the Supreme Court. The Supreme Court held that the whole negotiation connotes that it was made conditional on Exhibit 75 and the appellant ought to show how it met all the conditions.

 Condition and Warranties

There are the oldest terms commonly used. A condition is used in different senses and interchangeably. In the old case of Re Lees ex. P. Collins (1875) 10 Ch. App. 167. (1876) 7 QBD 410, it was said that there were twelve different senses in which a condition can be used. For example, it may be a condition precedent, a condition subsequent, a condition inherent.

A condition precedent occurs where an agreement is subject to the preparation of a formal agreement. Such agreement is not binding until a formal agreement is drawn up and signed.

In Pym v. Campbell (1856) 6 E&B 370 an agreement to buy an invention was made subject to the approval of a third party, an engineer. The court held there was no binding contract until that approval was obtained from an engineer. 

A condition may also be a condition subsequent. The unreported the case of African Continental Bank Ltd. v. Okonkwo (Unreported) High Court of Bendel State, suit No A/20/80 per Akpovi J is illustrative. The defendant applied to the plaintiff for a loan of £20, 000 while his application was under consideration, the plaintiff invited an estate valuer to value the property which the defendant was offering as security for the loan. The valuer charged a fee of a £985 for his services and this was debited to the defendants account when subsequently, the application for a loan was not approved, the defendant refused liability for the valuers fee. The court held that the defendant was right in repudiating liability for the fee. 

The judge said that it would be unfair to the defendant to made to pay for the valuation of his property against a loan which was never granted. The term ‘conditions and warranties’ are used as terms into contract and are used for the same purpose. The two terms are clearly distinguished in the Sale of Goods Law where a condition is defined as a stipulation in a contract as repudiated and a warranty as a stipulation, the breach of which may give rise to a claim in damages but not a right to reject the goods or treat the contract as repudiated. In another way, the prescription of remedies for breach of conditions and breach of warranties indicates that a condition is a major term that attracts repudiation and damages, while warranty is a minor term which attracts the remedy of damages only. The interpretation section of the Sale of Goods Edict describes a warranty as collateral to the main purpose of the contract. A condition is described as a term which goes to the root of the contract.

Whether a term is a condition or a warranty depends on the intention of the parties. A neat illustration of the description of a condition and warranty is found in the contracting cases of Poussard v. Spiers (1876) 1 QB 410 (condition) and Bettini v. Gye (1876) 1 QBD 183 (warranty). 

In Poussard v. Spiers (1876) 1 QB 410, an actress was engaged to play a leading part in a French operatta at the beginning of the run. As a result of illness, she was unable to take up her role until a week after the performances had started. In the meantime, the producers engaged a substitute to replace her and she instituted an action for breach of contract. The court held that her failure to appear for her final rehearsal constituted a breach of condition and that the defendants were entitled to treat the contract as discharge.

In contract, in Bettini v. Gye (1876) 1 QBD 183 the defendant entered into a contract to engage the plaintiff as a singer in operas and concert for a period of 3 months. The plaintiff undertook to be in London on at least six days before the commencement of her engagement for rehearsals she, however, arrived two days before the engagement commenced and the defendant repudiated the contract. It was held that the term as to rehearsals was a warranty and the defendant could sue for damages, he could not repudiate the contract. It is noteworthy that the fact that parties have described a term in the contract as a condition is not conclusive, if in fact, it is a warranty.

 Innominate Terms

The court have evolved a new term which is a hybrid between a condition and  a warranty, the breach of which could lead to either damages or to a repudiation depending on the breach. The court will look at effect of the breach, where it is so devastating as to deprive the injured party of the whole benefit which was the intention of the party, the remedy will be repudiation, otherwise, it would be damages. 

The leading case on the innominate terms is Hong Kong Fir Shippings Co. Ltd. v. Kawasaki Kison Kaisha Ltd. (1962) 2 QB 26, ‘the defendants chartered a ship from the plaintiffs for a two years. The vessel was delivered and it sailed from Liverpool to Newport in USA, and loaded a cargo of cool for Osaka in Japan. The engine room staffs were incompetent and the engine was old. The ship broke down and for five weeks the vessel was held up. It was discovered that repairs would be needed for another 15 weeks. The Chartered repudiated the contract. The court found that the ship was not seaworthy, but the breach did not entitle the charters to rescind the contract. According to the court although, there were many other contractual undertakings which could not be identified per se as either conditions or warranties, there were many other contractual undertakings of such a complex character which could not be categorized as either conditions or warranties, it is this third group of case to the innominate terms belong. In marine contract, the seaworthiness test was an undertaking which is a clause within the third category, so also te issue of roadworthiness in vehicles. The test of substantial benefit applies to this third group. The breach only entitled the charterers to damages but not repudiation of the contract.

The doctrine of innominate terms was again recognized in Cahave v. Bremer (1976) QB 44 (1975) 3 All ER 739, a German company sold 12, 000 tons of United States citrus pulp pellets to be used as cattle food for £100, 000. The contract provided that the goods were to be delivered in good condition, on arrival in Rotterdam from USA, the goods was found with a small proportion of the cargo had become bad as a result of overheating. 

The buyers rejected the goods and claimed a refund of the purchase price. The court ordered the sale of the whole cargo which was bought by third party for £30, 000 and resold to the buyer for that price. The Court of Appeal held that apart from conditions and warranties, there was a third term, the effect of depended on the gravity of the  breach.

If the breach goes to the root of the contract, the injured party is entitled to treat himself as discharged. According to Lord Denning, the task of the court when faced with a breach of contract is to see whether the stipulation breached on its true construction is a condition strictly so called, that is which entitled to treat the injured party to treat the contract as discharged. Secondly, if it is not such that goes to the root of the contract, the other party is entitled to treat himself as discharged so, the court is applying the test to the clause stipulating that the shipment was to be good condition was neither a condition, nor a warranty, but an intermediate term, and since the breach did not go to the root of the contract, the buyer was not entitled to repudiate the contract.

In the interest of certainty, and in the light of recent decision, the traditional classification into conditions and warranties are still relevant and applicable to a large number of situation Maredelanto Campania Nariera SA v. Berbau Handel GMbtt (1971) 1 QB 164 (1970) 3 All 125. Therefore, once a clause in a contract is accepted as condition per se it will remain and cannot be classified under the third category. In Bunge Corporation, New York v. Tradex Export SA Panama (1981) 1 WLR 711, (1981) 2 All ER 540 HL a seller of goods was held entitled to repudiate the sale agreement because the buyer who was required to give the seller at least 15days notice of when a vessel to ship the goods would be ready, gave 13days notice. It was held that the notice as to the date of readiness was a condition, and short notice, even one day was a breach of condition. 

It is noteworthy that when a court decides that a breach is either a breach of condition or warranty, the court will examine the quality of the term broken, and in basing it judgment on this. Whereas, when the court holds that a term is an intermediate term, the court considers the effect of the breach and bases its judgment on it too.

“It must also be borne in mind that where parties stipulate what the consequence of a particular clause in a contract is, the court will accept and enforce it. However, it is not, sufficient to call a clause ‘condition’ and another ‘warranty’.

It is for the court to classify the terms. Parties may refer to a clause as a condition when on a close examination, it may be warranty or any other terms in particular, in insurance contracts.

 Implied Terms

The courts have frequently found it necessary in construing the terms of a contract to assume the existence of certain terms, not expressly included by the parties in order to give the contract what is popularly referred to as business efficiency. In Iboma v. Shell Petroleum Dev. Co. (Nig.) Ltd. (1998) 3 NWLR (pt. 542) 493, the Court held that there are certain contracts where terms may be logically implied from the express terms of the contract or where no such express words are available, implied terms may be imported into the contract in so far as they do not contradict the express terms of the particular contract. In order to make a contract capable of being performed effectively, there are three ways terms are implied into the contract.

These are:

• Terms implied by the custom or trade
• Terms implied by statute
• Terms implied by courts

 1. Terms Implied by custom or trade

Terms are implied into a contract by adducing evidence of local custom or trade usage, though such terms have not been expressly mentioned in the contract. The principle was clearly stated in Hutton v. Warren (1936) M & W 466 at 475 by Park B many years ago:

“It has long been settled, that in commercial transactions, extrinsic evidence of custom and usage is admissible to anne incidents to written contracts in matters, with respect to which they are silent. The same rule has been applied t contracts in other transactions to life, in which known usages have been established and prevailed, and these have been done upon the principle of presumption that in such transactions, the parties did not mean to express in writing the whole of the contract by which they intended to be found, but to contract with, reference to those known usages” Ibid at p 475.

In the case of British Crane Hire Corporation v. Ipswich Plant Hire Ltd. (1975) QB. 303, the plaintiffs and the defendants were both in the business of hiring out heavy earth- moving equipment. The plaintiffs, in usual practice, sent a printed form of agreement to the defendant for signature. Under the conditions in the printed but unsigned form which was similar to those used by all firm in the crane hiring business, hirers are liable to indemnify the owners against liabilities in the sort of situation that had occurred. The defendant resisted the incorporation of this term into the contract. The Court of Appeal held that the terms had been incorporated, as both parties were in the trade and they knew firms in the plant hiring trade always imposed such conditions in regard to the hiring of plant. Lord Denning stated.

“It is clear that both parties knew quite well that conditions were habitually imposed by the supplier of these machines and both parties knew the substance of these conditions! From this decision, it is clear that a custom is applied only when it has been expressly or impliedly excluded by the contract. Where the usage is notorious, that both parties are either familiar with it or must presume to be familiar with it, an alleged custom can be incorporated into the contract only if there is nothing in the express or necessarily implied terms of the contract to prevent such exclusion. London Export Corporation v. Jubilee Coffee Roasting Co. (1958)2 All ER 411.

The case of Gottschalk v. Elder Dempster & Co. Ltd (1917) 3 WLR 16 is also illustrative under a contract of carriage of goods by sea, the terms which were contained in a bill of lading. The defendant undertook to consign some packages from Liverpool to the plaintiffs in Lagos. The plaintiffs safely delivered the package to the customs shed on arrival, one of them was missing when the plaintiff took the delivery and he sued for loss.

The plaintiff sought to rely on a custom at the port according to which the defendants would have contained after the discharge of goods. The court held that no evidence of custom can override the terms of written contract. If an alleged custom is not sufficiently well established, as to be known or presumed know to all engaged in the relevant trade, it cannot be applied to a contract in which notice of it has not been given to one of the parties.

In Bank of the North v. Poland (1969) 3 ALR 217 the plaintiffs were bankers in Kano and defendants were Lloyd’s in London. There was insurance between the plaintiff and defendant. The effect of the express terms of the policy was to give the plaintiff a right to claim payment in Kano for losses in Nigeria. In challenging the jurisdiction of the Nigerian Court, the defendants denied that they were liable to pay in Nigeria. They adduced evidence to established that by custom and usage of Lloyd’s, insurance money could not be paid directly to the assured in Nigeria an can only be obtained payment in London through approved brokers. The court held that the alleged Lloyd’s customs or usages were not part of the contract. In the absence of the knowledge of the customs and assent to them, they could not be incorporated into the contract. It was said Lloyd’s customs had not yet acquired sufficient notoriety and general acceptance to be applicable to all transaction with Lloyd’s underwriters.

In employment contract, custom and usages have developed extensively. There is a rule that a person who employs a person has the power to terminate his employment where there is no express provision to the contrary. Another rule is that an employee who is paid on a monthly basis is entitled to one month’s notice on termination. However, in Ahuronye v. University College, Ibadan (1959) WR NLR 232 it was held that when a servant is engaged for an indefinite period, it is common knowledge that neither the master nor the servant contemplates an engagement for a year certain. It was presumed that the plaintiff was employed on the same term as other employees and the plaintiff employment was determinable by one month’s notice.

 (ii) Terms implied by Statutes.

Certain statutes imply terms into particular types of contract. This was done to protect the weaker party and in this case, the buyers, in contract for the sale of goods. The Sale of Goods Edict, in the English Sale of Goods Act, 1893/1979 was regarded substantially a codification of the existing common law of sale. Certain sections contain terms which are implied in all contracts as to the title, description, suitability for particular purpose sample and merchantable quality. 

Though, each State of Federation enforce its own Edict on sale of goods, the principle of law arising from the interpretation of the provisions of these laws are uniformly applied in all the 36 States of the Federation and the Federal Capital, Territory Abuja, 

The implied terms are:

 (a)    Implied Terms as to Title

The Sale of Goods Edict provides that in a contract of a sale, there is an implied condition on the part of the seller that in the case of a sale, he has a right to sell the goods and in case of agreement to sell, he will have right at the time when the property is to pass Section 14. of Kaduna State Edict, 1990.\

In interpreting the section, the seller is deemed to give an implied warranty that the buyer shall enjoy quiet possession of the goods Section 142(a) of Kaduna State Edict, 1990. Another warranty is that the goods are free from any charge or encumbrance in favour of a third party. Thus in Akosile v. Ogidan (1950) 19 NLR 87. See also Roland v. Dival (1923) 2 KB. 500, Niblet v. Confectioners Materials (1921) 3 KB 387 the defendant bough a car from a European for £3-5 and sold it to the plaintiff for £340. The European was subsequently convicted of stealing the car and the car was removed by the police. The plaintiff brought an action for the recovery of £340 the purchase price from the defendant. The defendant relied on the doctrine of caveat emptor. The defence was rejected and held not applicable. The court held that the plaintiff was entitled to the refund of the purchase price.

 (b)   Sales by Description

The Sale of Goods Edict provides that where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description. Section 15-Kaduna Sales of Goods Edict, 1990.

The provision applies where the buyer has not got the opportunity to see the goods and he relies on the seller’s description. Thus, in Varley v. Whipp (1900) I QB 513 an old reaping machine was described by the seller as new. The buyer relied on the description and bought the machine without seeing it. The court allowed him to rescind the contract and recover his money. 

The same rule is still applicable where the buyer has not seen the goods but he relies on the seller’s description. In Ogwu v. Leventis Motors (1963) NRNLR 115 the appellant contracted to buy a year old second hand lorry and he was given a four years old lorry. On discovering the error after the lorry has broken down on several occasions, the purchaser was allowed to return the lorry and claim his money.

In a sale by sample, the goods can be regarded as a description bulk of the goods. This illustrated in the case of Boshalli, v. Allied Commercial Exporters Ltd. (1961) 1 All NLR. 917. The appellant in Nigeria contracted to buy cloth materials from the respondent IN England. Though, it was a contract of sale by description, the description was followed by a sample labeled and identified as the goods earlier described. When the sample taken from the bulk shipped was found inferior to the first sample, it was held that this constituted a breach of the condition as to description.

 CONCLUSION

A representation which has induced the formation of a contract may itself be a term of that contract, that is, be an integral part of it, or it may form no part of it. If a representation has been made a term of the contract, it is called contractual representation; however, if it is not a term of the contract, it is technically know as ‘mere representation’.

 SUMMARY

In this unit we learnt what is representation, and how you can distinguish it from term. You should also bear in mind that the remedy available between a term of contract and a mere representation. And most importantly the factors that you will consider before you can say whether a statement is a term or mere representation.

TUTOR-MARKED ASSIGNMENT

1. What constitute representation?
2. What is the different between a term and representation?
3. John, a postman, buys a new computer from a department store. A prominently displayed notice in the store says that refunds will not be given on any goods bought. The shop assistant points the notice out to John before the contract is made. When John gets the computer home he cannot get it work. He asks a friend, Martha, to help him. Martha discovers that the computer is faulty. She also agrees to give John her old computer. Consequently, John no longer wants the bought computer. John takes the computer back to the store. However, the store refuses to refund the purchase price because the fault on the computer could easily be fixed and because the notice said that no refunds would be given. Advise John of his legal position.

 REFERENCES/FURTHER READINGS

OLUSEGUN YEROKUN, Modern Law of Contract, 2^nd ed., Nigerian Revenue Project Publishers (2004)

T.O DADA, General Principles of Law, 3^rd ed., T.O. Dada & Co. (2006)

I.E. SAGAY, Nigerian Law of Contract, 2^nd ed., Spectrum Law Publishing (2001)

EWAN MACINTYRE, Business Law, 1^st ed., Pearson Education Limited (2008)