The following Commercial practice note provides comprehensive and up to date legal information covering:
This Practice Note looks at statements made by one party to another prior to entering into a formal contract and gives an overview of the circumstances in which that statement could be said to form part of the contract or give rise to other remedies. For further information, see Practice Note: Contract interpretation—admissibility of pre-contractual negotiations and statements.
Statements are often made by one party to another as part of the pre-contract negotiations (for example as part of a sales process). Disputes can arise around whether, or which, statements are intended to form part of the contract or potentially give rise to other remedies. Depending on the facts, a pre-contractual statement might take legal effect (and give rise to remedies) as follows:
Contractual terms: In certain circumstances the statement may:
be construed to be a term of the contract. Written agreements will often contain exclusion clauses and/or entire agreement clauses in an effort to prevent pre-contractual oral statements being construed as a term of the agreement but this does not always succeed. BSkyB v HP Enterprise Services UK is a spectacular and expensive example of an entire agreement clause failing to exclude negligent misrepresentations
affect the interpretation given to a contract: notwithstanding the general exclusionary rule, there are some limited occasions
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