A Case Summary of Schawel v Reade [1913] 2 IR 81

Schawel v Reade [1913] is a notable case in English contract law that deals with the concept of a statement becoming a contractual term. Here’s a summary of the case:

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Facts (Schawel v Reade)

The plaintiff was interested in buying a horse for stud purposes from the defendant.

During the examination of the horse, the seller (defendant) made a statement to the plaintiff: “You need not look for anything: the horse is perfectly sound.”

Relying on this assurance, the plaintiff did not conduct any further inspection or checks of the horse.

The sale was completed about three weeks later.

After the purchase, the horse turned out to be unsatisfactory, and the plaintiff sought to claim damages from the seller.

Issue in Schawel v Reade

The key issue was whether the seller’s statement about the horse being “perfectly sound” constituted a term of the contract.

Judgment of the Court

The House of Lords held that the seller’s statement was indeed a term of the contract. The reasoning was based on the strength and importance of the seller’s assertion. The statement was made in a manner that implied the seller was providing a guarantee about the condition of the horse. The court concluded that the assurance was sufficiently emphatic to be considered part of the contract.

Significance

The case established that the more emphatic and significant a statement made during negotiations is, the more likely it is to be regarded as a contractual term.

A Contrasting View

In the given case of Schawel v Reade [1913], despite the three-week gap between the statement and the final contract, the Court determined it to be a term. However, in contrast, Routledge v McKay (1954) provides a different perspective on how the timing of statements impact their status as contractual terms. Here, a statement regarding the age of a motorbike being sold was not considered as a term due to the lapse of several days after it was made.

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