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Incorporation Of Supplementary Terms Notes

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INCORPORATION OF SUPPLEMENTARY TERMS

Those which increase the responsibility inherent in the contract's performance, typically through the addition of a positive guarantee of some kind.
Distinguish:
o Representations - these remain outside the contract

Warranties - contractual term, the breach of which allows a claim for damages.
The basic test for whether an assurance has become part of the contract is whether the parties intended that it should do so.
o Heilbut v Buckleton [1913] - shares in a rubber company.
 Holt CJ: no fixed test. "The intention of the parties can only be deduced from the totality of the evidence, and no secondary principles of such a kind can be universally true"
As a result a large number of subsidiary tests have developed:
o Bannerman v White (1861) - Plaintiff produced note assuring that no sulphur had been used on cultivating the crop. Held this was a term of the contract.
o Oscar Chess v Williams [1957] - part exchange, D got new car from P in exchange for his old 1948 model (confirmed date in reg book). Later transpired it was a 1939 model, P
sued.
 Held this was a representation, a statement of belief not a contractual promise. The plaintiffs knew that the defendant had no greater knowledge of the car's date of manufacture than they had themselves.
 Matter of intention, and placement of parties to provide guarantee.
 Morris LJ, dissenting, considered that the age of the car was a vitally important matter, and therefore a condition of the contract.
o Dick Bentley v Harold Smith (Motors) [1965] - Bentley asked car-dealer to find him a 'well-vetted' Bentley. D found one stating it had only done 20k miles since new engine was fitted. It had in fact covered many more.
 Held this was a warranty. Denning MR: If an intelligent bystander would reasonably infer that a warranty was intended, that will suffice.
 A statement will more readily be found to be a term of the contract if it is made by a person who, to the knowledge of both parties, is well-placed to guarantee its accuracy.
o Schawel v Reade [1912] - Prospective buyer of a horse was told by the seller that he need not continue to examine the animal because if anything were wrong the seller would have informed him
 Lord Moulton that there could be no clearer evidence that the statement was meant as a term of the contract.

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