Question

A. Does a contract have to be in writing? (1 mark) B. List three types of terms in a contract. C. Distinguish terms in a contract from a representation.

Answer 1

A.

An agreement enforceable by law is called a contract. The contracts either can be in a written form or in oral form and both are enforceable by law.

If the contracts cannot be performed within one year then it must be written form. The contracts which are performed within one year, there is no need to be in written form.

B.

A contract is a written agreement between two parties to provide goods or services. There are 3 types of terms in a contract :

(i) Warranty : A warranty means a guarantee or a promise which provides an assurance by the seller to the buyer that specific facts and conditions are true.

(ii) Condition :  A condition is a stipulation collateral to the main purpose of the contarct, breach of which gives rise to a claim for damages but not a right to reject the goods and treat the contract as repudiated.

(iii) Innominate term : An innominate term is a term of contract, which cannot be identified as either warranties or conditions and so they are identified as innominate until the contract has been breached.

C.

S. No.	Term	S. No.	Representation
1.	A term is a statement which is intended to form part of the contract.	1.	A representation is a statement made only to induce the other party to enter into the contarct.
2.	The shorter time that has passed from the moment the statement was made until the time the contract is formed, the statement is term of the contract.	2.	The longer time that has passed from the moment the statement was made until the time, the contract was formed, the statement is treated as representation.
3.	If a person has special knowledge and skills to ascertain the accuracy of a statement, it will be treated as a term.	3.	If a person lack of knowledge and skills and depends upon another statement received from others, his statement will be treated as a representation.