Terms of the contract two preliminary issues: Two preliminary issues

Esso Petroleum Co Ltd v. Mardon [1976] QB 801, CA

• An Esso employee, whose job was to assess the potential output of petrol stations, advised Mr Mardon that a specific station would sell at least 200,000 gallons of petrol a year.
• Relying on this advice, Mr Mardon leased the station, but sold only 78,000 gallons in 15 month.

Analysis:

• A special relationship existed – the employee was an expert
• The statement was made by the employee
• Mr Mardon reasonably relied on his advice.

Important lessons

Important lessons

from these three cases

(1) Knowledge of the parties

(1) Knowledge of the parties

Knowledge of the parties is

an important factor

when seeking to decide

whether or not

the statement is incorporated

as a term

(2) The importance of the term

(2) The importance of the term