(a) Contractual terms are statements which form part of the contract. Parties to a contract will normally be bound to perform any promise that they have agreed to and failure to perform will lead to an action for breach of contract, although the precise nature of the remedy will depend upon the nature of the promise broken. Additionally, some terms will be automatically included in contracts by operation of statute and may not be excluded.
Some statements do not form part of a contract, even though they might have induced the other party to enter into the contract. These pre-contractual statements are called representations and the event of their being broken leads to different remedies than operate in regard to breaches of terms. It is important, therefore, to decide precisely what promises are included in the contract. Once it is decided that a statement is a term, rather than merely a pre-contractual representation, it is further necessary to decide which type of term it is, in order to determine what remedies are available for its breach. Terms can be classified as one of three types. |
