Conditions, warranties and innominate terms.

Question 1

What are Contractual Terms?

Answer 1

The foundation of agreement, defining the rights and obligations of parties.
Help determine the enforceability of contract & the remedies available when breached.
Terms can be categorised in certain categories:
Condition - fundamental term, crucial to contract performance
Warranty - subsidiary, less central to the contract
Innominate term - terms assessed based on impact of their breach

Question 2

Condtions

Answer 2

The Most Important Term: Condition is a fundamental term.
If breached, innocent party can terminate contract and claim damages for loss incurred.
Case: Poussard v Spiers - Singer’s failure to attend opening performances constituted a breach of condition allowing termination.
e.g. contract requiring the actor to paint white walls prior to entering.

Question 3

Warranties

Answer 3

A warranty is a secondary term that doesn’t go to root of contract.
If breached, the innocent party can claim damages only (contract remains in effect)
Case: Bettini v Gye - Singer failed to attend rehearsals, was considered a warranty breach, only damages could be awarded but termination was not justified.

Question 4

Innominate Term

Answer 4

Not strictly a condition or warranty; courts assess the breach’s impact.
If serious, treated as a condition (Termination + Damages)
If minor, treated as a warranty (Damages).
Case: Hong Kong Fir - Ship was unseaworthy for 20 weeks, but seeing it did not deprive the party of the whole contract benefit, only damages awarded

Question 5

How can you apply conditions, warranties + terms

Answer 5

1. Contract formation and terms
   - contract terms and there significance
   - Factoring to a warranty, condition + warranty
2. Assess breach of contract and determine legal remedies
3. Discuss key cases

Question 6

Poussard v Spiers

Answer 6

Singer’s failure to attend opening performances constituted a breach of condition allowing termination.

Question 7

Bettini v Gye

Answer 7

Singer failed to attend rehearsals, was considered a warranty breach, only damages could be awarded but termination was not justified.

Question 8

Hong Kong Fir

Answer 8

Ship was unseaworthy for 20 weeks, but seeing it did not deprive the party of the whole contract benefit, only damages awarded