R, a car dealer, agreed to sell a car to S for HK$50,000 after S had examined the car on the garage forecourt. The document on the car windscreen indicated the price and in large letters said, ¡°All our cars are in tip top condition!¡± Later in small print was a clause which read, ¡°We accept no legal responsibility for the condition of the vehicle. For terms of sale see the notice in the office and the details in the sale agreement.¡± In the office, where there was a large notice on the wall indicating all the major provisions, S signed the agreement to purchase the car. It contained the following provisions:
¡°It is agreed that there is no warranty, condition, or statement about the condition of the car and that no statement was made which persuaded the purchaser to enter into the contract.¡±
¡°It is agreed that the maximum damages payable for breach of contract shall be HK$2,500¡±
¡°There is no express term, implied term (statutory or otherwise) or warranty or statement about the vehicle which is to have any legal effect. There is no promise about the condition of the vehicle.¡±
Two days later, when S¡¯s wife was driving the car which S had given to her as a birthday present, the car crashed because the brakes were defective. Mrs S was injured and off work for six months causing her to lose HK$100,000 in wages. The car was a write off.
Advise S.
Whether the statement in large letters ¡°All our car are in tip top condition!¡± is a representation or a term depend on the intention with which the statement was made. If it was intended to be a binding part of the contract it is term; otherwise it is a representation. To test this intention the following test can be applied:
1) Special knowledge or skill of the part ...