Question

Fynn enters into a contract to sell Toby his 1999 Commodore for $3,000. During negotiations leading up to the contract Fynn assured Toby that there was no rust in the car.

Examine the following three situations and:

• state whether Fynn’s statement about rust is a term of the contract or a representation (just write term or representation) and

• state the rule and the case that best support your decision.

1. Where three weeks pass before Toby accepts Fynn’s offer.

2. Where Fynn and Toby write down all the things they have agreed to (including the no-rust assurance) on a sheet of paper that neither sign.

Answer 1

This is Representation:

Rule and Case: Thus in this scenario, the rust statement looks to be the representation and not contract item, because this is the outcome of the negotiation and it is not mentioned in the contract terms and conditions. The definition for both term are as below

· Term of Contract: The terms of contracts are the thing agreed and written as the part of the contract. These are written and signed off by both the parties in the contract.

· Representation: This is the statement made by any of the party, but it is not written as part of the contract and not signed off by both parties. There is no guarantee given by the person stating this statement.

· Scenario: Fynn enters into a contract to sell Toby his 1999 Commodore for $3,000. During negotiations leading up to the contract Fynn assured Toby that there was no rust in the car.

· Examining the following three situations a below

1. Where three weeks pass before Toby accepts Fynn’s offer: This is the situation in which three week are passed, thus the rust can develop in this three week, hence Fynn’s statement was valid three week before. Hence this case proves that it is a representation and not contract term. A rust condition changes with time passage.

2. Where Fynn works as a salesperson at a local used car yard: Fynn works as a sales person at local used car yard, then Fynn will be able to make statement that the car do not have rust and Fynn can remove the rust if available any, which may develop over the time passage. Thu this shows that it is a representation and not contract term.

3. Where Fynn and Toby write down all the things they have agreed to (including the no-rust assurance) on a sheet of paper that neither sign: This case shows that the terms and conditions what they have agreed including rust, are not added in the contract term and signed off, hence it is a representation and not contract item.