What is the key difference between a term of contract and a representation?

The key difference between a term of contract and a representation is that a term is a fundamental part of the contract that is legally binding and forms the basis of the agreement between the parties. A representation, on the other hand, is a statement made by one party to the other during negotiations that is not intended to be a formal part of the contract and may not be legally binding. Representations are generally considered to be statements of fact or opinion that are made to induce the other party to enter into the contract, but they do not have the same legal significance as terms of the contract. If a representation turns out to be false, it may give rise to a claim for misrepresentation, but it does not automatically invalidate the entire contract like a breach of a term would.

Term of Contract:

- A binding agreement that creates legal obligations for both parties to the contract.
- Typically outlined in the written contract document.
- Failure to fulfill a term can result in legal consequences (e.g., breach of contract).

Representation:

- A statement of fact or intention made by one party to the contract before or during the formation of the contract.
- Not considered a binding obligation, but may be used to induce the other party to enter the contract.
- If a representation turns out to be false, it may constitute misrepresentation or fraud, but does not automatically result in a breach of contract.

Key Difference:

The key difference is that a term of contract creates a legal obligation, while a representation does not. Breaching a term of contract can lead to legal action, whereas misrepresenting a fact or intention typically does not result in a breach of contract itself.