Schawel v Reade [1913] 2 IR 81:

Material Facts:

The claimant purchased a stallion from the defendant for stud purposes, and informed the defendant of this purpose. Prior to the purchase, and whilst examining the stallion, the claimant was informed by the defendant that there was no need for such examination since the horse was sound and fit for purpose. Pursuant to this information from the defendant, the claimant stopped his examination and purchased the stallion about three weeks later. It later turned out that the stallion was unfit for stud purposes.

Issues:

1. Whether or not the defendant’s assurance on the health of the stallion constituted a term of the contract.

Holding:

1. That the defendant’s assurance constituted a term of the contract.

Ratio Decidendi:

The court believed that the defendant was aware of the claimant’s purpose for purchasing the stallion and consequently gave his assurance of the stallion being fit for the same purpose which the claimant relied upon.

Comment:

The time for contracting was interpreted to include the period prior to the actual payment (when negotiations and the examination of the stallion began 3 weeks prior to actual payment). This ruling is essential because it recognizes as terms of contract statements made during negotiations and before the conclusion of the contract.