Type of Terms Flashcards
Introduction?
Once the statements have been decided as terms and the implied terms have been implied, the courts must then decide on what types of terms the terms are as this has an impact on what the parties can receive.
Condition?
A condition is a term in a contract that is so important that failure to perform it would destroy the main purpose of the contract.
Poussard v Spiers - Going to the root of the contract.
If the conditions in a contract are not carried out, then the contract can be ended (repudiation) or continued with damages claimed.
Warrenty?
A warranty is a minor term in the contract, Only damages can be claimed for a breach of warranty. The contract is not ended and the main purpose of the contract can continue. The defendant cannot repudiate the contract - Bettini v Gye.
What is the New Approach?
Arcos v Ronaasen - Problems with the term based approach led to the introduction of innominate terms.
An innominate term is a term in a contract that is clearly not a condition or a warranty.
It is a breach based approach.
What is the test for innominate terms?
Hong Kong Shipping v Kawasaki - 2 Questions to decide whether condition or warranty.
1) How serious is the breach.
2) Has the party been deprived the whole contract.
What is the consequence of breaching an innominate term?
The Hansa Nord sets out the consequences for breaching an innominate term.
