The statements that are most likely to generate disputes are statements with
two characteristics. (i) The statement relates to the quality of goods or services
that are the subject of the contract. (ii) The statement is untrue.
Possible consequences of these statements can be divided into two classes.
First, there may be consequences relating to the main contract. These include
the following possibilities:
(1)
The statement becomes a term of the main contract and is not,
therefore, just huffing, an invitation to treat or a mere representation. This is
typically considered in the discussion of the terms of a contract (which is part
of defining the contract).
(2)
The statement is a contractual misrepresentation. This is typically
considered in the discussion of consent.
(3)
The statement constitutes common mistake or unilateral mistake for the
subsequent contract. This is typically considered in the discussion of consent.
(4)
The statement constitutes an express or implied notification, by a
purchaser, of the purpose for which goods and services are required. Such a
statement may trigger the insertion in the contract of a statutory term that the
goods
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or services
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are fit for that purpose. This is typically considered in
the discussion of the terms of a contract.
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(5)
The statement may be significant only in that it does not have
contractual or other legal consequences. For example is may be just huffing or
an invitation to treat and consequently not an offer. This is typically
considered in the discussion of formation of agreement.
Second, the statement may have some other remedial consequence besides the
main contract. For example it may give rise to an action in tort for negligence
or deceit. These other remedial consequences constitute the final part of this
analysis of contract.
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The Australian provisions performing these functions are Trade Practices
Act 1974
(Cth) s71,
along with the equivalent provisions in the sale of goods
legislation in the states and territories -
Sale of Goods Act 1923 (NSW) s 19, Sale of
Goods Act 1896
(Qld) s 17, Sale of Goods Act 1895 (SA) s 14, Sale of Goods Act 1896
(Tas) s 19, Goods Act 1958 (Vic) s 19, Sale of Goods Act 1895 (WA) s 14, Sale of Goods
Act 1954 (ACT) s 18, Sale of Goods Act 1972
(NT) s 19. These statutory provisions
largely codify the common law.
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See, for example, Trade Practices Act 1974 (Cth) s 74
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Note that under s 74b of the Trade Practices Act 1974 (Cth) the statement may
also found a statutory action against the manufacturer based on the goods not
being fit for the purpose.
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