When entering into a business agreement, it is important to understand the difference between contractual terms and mere representation. Both types of statements can have legal implications, but they are not the same.
Contractual terms are statements that are included in the written contract and are intended to be legally binding. They outline the obligations and responsibilities of both parties in the agreement. If either party breaches a contractual term, there can be legal consequences, including the possibility of a lawsuit.
Mere representations, on the other hand, are statements that are made during the negotiation or discussion of the agreement but are not necessarily part of the written contract. They may be statements of fact, opinions, or promises made by one party to the other. Unlike contractual terms, mere representations are not always legally binding.
To determine whether a statement is a contractual term or mere representation, courts will look at the intention of the parties at the time the statement was made. If the statement was intended to be a binding part of the contract, it will be considered a contractual term. If it was not intended to be legally binding, it will be considered a mere representation.
It is important to be aware of the difference between these two types of statements because it can affect the enforceability of the agreement. If a statement is deemed to be a mere representation, it cannot be used as the basis for a claim of breach of contract. However, if it is deemed to be a contractual term, a party can take legal action if that term is not fulfilled.
In order to avoid any confusion or disputes, it is recommended that all important statements be included in the written contract. This ensures that there is no ambiguity about the intention of the parties.
In summary, contractual terms and mere representations are not the same. Contractual terms are legally binding statements included in the written contract, while mere representations are statements made during negotiations that may or may not be legally binding. It is important to understand the difference between these two types of statements to avoid any legal disputes.
