3.1: Types of Terms

Question 1

What is an express term?

Answer 1

Parties have expressly agreed upon together, usually written into the contract

Question 2

What is an implied term?

Answer 2

Something not written into the contract, but can be implied either by statute, by the courts based on the facts of the case or base on customs and trade usage

Question 3

What is a condition?

Answer 3

Most important term, goes to the root of the agreement, if not met or broken the contract can be repudiated

Question 4

What case shows a condition being broken?

Answer 4

Poussard v Spiers

Question 5

What is a warranty?

Answer 5

Minor terms in a contract, less important than a condition, if breached the other party can only claim for damages

Question 6

What case shows a warranty being breached?

Answer 6

Bettini v Guy

Question 7

What is an innominate term?

Answer 7

Term without classification, court looks at the consequence of the breach in order to decide a remedy

Question 8

In what case did the courts decide an innominate term was only a breach of a warranty?

Answer 8

Hong Kong Fir Shipping Co Ltd. v Kawasaki Kisen Kaisha

Question 9

What is the difference between a representation and a term?

Answer 9

A term is part of the contract, a representation is not, this is important when deciding if something said in negotiations is a term or not

Question 10

What will the courts consider when deciding if something is a term or representation?

Answer 10

• Time between the statement and making of the contract
• If the statement was oral but not put in the contract
• Representation from an experienced party to an inexperienced party is likely to be a term (Dick Bentley v Harold Smith)
• Oral statement can be a term if of central importance and has been relied upon (Bannerman v White)