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5. The Terms of the Contract

This chapter discusses the nature and import of contractual terms and the form which they may take. First, it distinguishes the terms of a contract from representations, which are statements made by one party to the other that are not intended to be an integral part of the agreement. Similarly, collateral warranties, which are preliminary assurances that are contractually binding, but not as part of the principal agreement, are distinguished from representations which are not contractually binding. Second, the importance of different types of terms is examined by reference to the distinction between conditions, warranties, and innominate terms. Third, the implication of terms into contracts is explored. Finally, the chapter considers the interpretation or construction of terms.