Classification

Question 1

What is a condition of a contract?

Answer 1

A major term of a contract, where breach would defeat the purpose of the contract

Question 2

What is the effect of breaching a condition?

Answer 2

The contract can be repudiated (set aside) and may also be damages

Question 3

What case demonstrated the breach of a condition? What does it show?

Answer 3

Poussard v Spiers and Pond - shows that if breaching a term will defeat the purpose of the contract, this will be a condition (lead actress not showing up for performances)

Question 4

What is a warranty?

Answer 4

A minor term of a contract - the breach will not defeat the purpose of the contract

Question 5

What is the effect of breaching a warranty?

Answer 5

Can lead to damages, but the contract will continue

Question 6

What does the case of Bettini v Gye show?

Answer 6

If breaching the term does not defeat the purpose of the contract, this will only be a warranty (missing 3/6 rehearsals)

Question 7

Which 3 ways can courts use to distinguish between a condition and a warranty?

Answer 7

• does the term go to the ‘root of the contract’?
• does the statute specify the term as a condition or warranty? (if yes, this is conclusive)
• have the parties themselves specified what the term is?

Question 8

What does the case of Schuler v Wickman show?

Answer 8

Even if the parties have specified a term as a condition, this is unlikely if the term is unreasonable

Question 9

What is an innominate term?

Answer 9

Where a term is broad and so is not necessarily a condition or a warranty

Question 10

What is the effect of breaching an innominate term?

Answer 10

If the breach of an innominate term defeats the purpose of the contract, it can be repudiated however if it doesn’t, damages can be awarded

Question 11

What is the test to decide if an innominate term is serious breach or not? What case does this test come from?

Answer 11

Hong Kong Fir Shipping

- does the breach deprive the party of substantially the whole benefit of the contract? (does it defeat the purpose?)

Question 12

not often in scenarios

What terms were examined in the Bunge Corporation case and what was the decision?

Answer 12

‘readiness to load’ clauses - decided they would be conditions to keep the law on such contracts certain

Question 13

Why was the term ‘delivered in good condition’ innominate in the case of Cehave v Bremer?

Answer 13

Because the breach can be minor or major and therefore may or may not defeat the purpose of the contract