Terminating Contracts Flashcards
What is a “condition”?
Goes directly to the root of the contract
Breach is normally treated as repudiating the contract
What is a “warranty”?
Less vital terms.
Do not repudiate the contract but can give rise to damages
What is an “innominate term”?
Between a condition and warranty
Whether it can repudiate a contract depends on the consequences of the breach
Bettini v Gye (1876)
Singer missed rehearsals
This was considered a “warranty”, not enough to repudiate the contract
Poussard v Spiers (1876)
Singer failing to arrive within the first week had repudiated the contract
This was considered a “condition”
Re Moore + Landowners Contract (1921)
Packaging of cans was incorrect
Did not change the economic value
Considered to be a “condition” repudiating the contract
This was because of s13 of the Sales of Goods Act
Wallis Son v Pratt and Haynes (1911)
Wrong seed delivered
This was contrary to the Sales of Goods Act s13 enabling it to be a “condition”
However they accepted it affirming the contract
Schuler AG v Wickman Machine Tools (1974)
‘It shall be a condition that…’
The use of the word condition is not conclusive
Wickman was able to claim damages for wrongful repudiation
Hong Kong Fir Shipping (1962)
Was a breach of the “seaworthiness” clause enough to repudiate the contract?
No- it did not deprive the parties of the whole benefit
Lord Diplock- it is the seriousness of the consequences rather than the importance of the term
Introduction of innominate terms
Bunge Cooperation New York v Tradax (1981)
Notice for readiness to load
Buyers terminated the contract due to no notice
In this case it was contextually so vital that it was held as a “condition”
A Fundamental Term
The Hansa Nord (1976)
Intermediate term
Delivery of pulp pellets
Some of the shipment deteriorated
They terminated the contract and then bought the same pellets for a cheaper price at an auction
The consequences were the same so they were unjustified in terminating the contract
Hochster v De la tour (1853)
Anticipatory breach
The innocent party need not wait for the breach to claim damages
White and Carter (Councils) v McGregor (1962)
Company that attached advertisements to bins
Council changed there mind just after signing the contract
The company affirmed the contract and carried it out for 3 years
They then claimed damages
Lord Reed - cannot perform just to claim damages and cannot compel another party to perform
Need to mitigate the loss
