Conditions + Warranties Flashcards

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1
Q

Ways of classifying a term in a contract: 3 ways

A
  • conditions
  • warranties
  • innominate terms.
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2
Q

General principle if party breaches a condition?

A

innocent party = right to treat contract as repudiated + sue for damages immediately

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3
Q

Does the innocent party have to repudiate the contract if the other party breaches a condition?

A

No - can affirm it ie contract remains in full force.

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4
Q

Remedy if party breaches warranty?

A

sue for damages ony

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5
Q

what is the distinction between a condition and a warranty?

A

condition = important term ‘going to the root of the contract’

warranty = less important term not going to the root of the contract.

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6
Q

If the parties clearly intended at the time of contracting that any breach of the relevant term could result in the innocent party terminating, what type of term is this?

A

a condition (from the outset)

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7
Q

Terms at the outset which are neither conditions nor warranties are …?

A

Innominate/ intermediate nature

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8
Q

What Question do you ask when an innominate term has been breached?

A

Does breach deprive non-defaulting party of substantially the whole benefit that he should obtain from the contract?

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9
Q

If a party has committed a repudiatory breach, what classification of term have they breached?

A

a condition

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10
Q

What happens if there has been a breach of an innominate term?

A

the term will be treated as a condition

innocent party entitled to treat the contract as repudiated + claim damages.

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11
Q

What happens if the consequences of the breach are minor (of innominate term)

A

Will be considered as a warranty = innocent party entitled to claim damages only.

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12
Q

when considering classification of terms, what is the court’s starting position in considering whether the term in question has been classified as a condition or a warranty by…

A

i) statute;
ii) the parties or
iii) previous judicial decision(s)

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13
Q

If neither statute, the parties, or previous judicial decisions provide an answer, what will the courts do next?

A

look at:
- the contract
- the subject matter
- the surrounding facts

= to determine whether the parties intended for any breach of the term to entitle the innocent party to terminate the contract

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14
Q

If the court cannot determine the parties’ intention or determines their intention was that not every breach would lead to the right to terminate, what will they decide on the term?

A

term = innominate, and apply test from Hong Kong Fir (Do the consequences of the breach deprive the party not in default of substantially the whole benefit from the contract)

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15
Q

Where a requirement as to timing is essential to the contract, what will lateness amount to?

A

A repudiatory breach

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