EXPRESS TERM
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Section 9 1950 : " Contract must be expressed or implied"
Tests/ Guidelines
Classification of term
Parole Evidence Rule
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Exception under S. 92
Collateral Contract
Time lapse
Routledge v Mckay : The court held that it was a term as the contract was entered one week after the negotiation.
Importance of the statement
court will consider the length of time between the making of the statement and the conclusion of the contract.
the greater the importance of the statement, the more likely it will become a term
Bannerman v White : it was a term as the buyer placed a great importance upon the truth of the statement
The writing factor
If the statement is importance, it would have been concluded in the contract.
Routledge v McKay : It was a mere representation since it was not included in the contract.
Special knowledge or skills
The statement is more likely to become a term if it is made by a person with special knowledge or skills
Tan Chong & Sons Motor Company Sdn Bhd v Alan McKnight. : Respondent's claim was allowed as the salesman had a special knowledge and skill in regards to the car compared to the respondent.
Condition
S 12 (2) SOGA 1957
Warranty
S 12(3) SOGA 1957
Bettini v Gye : The term regarding rehearsals was not a condition and did not go to the root of the contract. Thus, its breach did not entitle the defendant to rescind the contract.
Innominate or Intermediate term
Consequences depended on the actual outcome of the breach
Prohibits a person from adducing oral evidence where the terms of the contract have been put into writing.
S. 91 Evidence Act 1950 : Whenever the terms of the contract has been consented to adduce into written document, there shall not be any other evidence be given in proof except the document itself.
Section 92 Evidence Act 1950: When the written contract has been consented by both parties to be adduced in a written document, no other document can be accepted to verifying, invalidate and contradicting the document.
S. 92(a): Any fact may be proved which would invalidate any document or entitle any person to any decree of order relating thereto
S. 92(b): The existence of any separate oral agreement, as to any matter on which the document is silent and not inconsistent with its terms. (collateral contract)
S. 92 (c): The existing of any separate oral agreement constituting a condition precedent to the attaching of any obligation under any such contract.
Tindok Besar Estate Sdn Bhd v Tinjar Co : The Federal Court held that the evidence sought to be adduced did not come within provisos (a) or (b) of Section 92, but was evidence adding a new term to the agreement.
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To overcome parole evidence rule to admit pre- contractual statements which had not been incorporated into the written agreement.
Exist side by side with the main contract
Tan Swee Hoe Co Ltd v Ali Hussain Brother: It was held that a collateral contract exist. An oral promise, given at the time of contracting , which induces a party to enter into the contract, overrides any inconsistent written agreement.
Overrides inconsistent written term
Kandasami v Mohamed Mustafa : A collateral contract existed under which the parties agreed that the written agreement would have no effect.
Cannot destroy main contract
Industrial & Agriculture Distribution Sdn Bhd v Golden Sands Construction Sdn Bhd : The High Court granted only nominal damages and held that the defendant had failed to establish the existence of a collateral contract. The oral assurance asserted by the defendant could not amount to a collateral contract as it would destroy the main contract.
Promissory in nature
Has induced the party to enter into the contract.
Tan Swee Hoe Co Ltd v Ali Hussain Bros: The parties must have intended or must be taken to have intended that the oral promise was to form part of the basis of the contractual relations between them.