Types/Classification Terms A03 1/4

Question 1

Sentence/Points

Answer 1

1. Condition creates certainty
2. Freedom in specifying
3. Innominates unclear (H) label and Diplock
4. Unfair when breach and not sub deprived (H) still benefited

Question 2

Point 1: Condition

Answer 2

• A01: A condition is a term which goes to the root of the contract (Poussard v Spiers)
• This is a fair classification of terms
• The classification of a term as a condition is still relevant today because judges will interpret terms based on the intentions of the parties. So if they have stated a term is a condition then it will be treated as such.
• Specifying statutory implied terms as conditions makes it easier for consumers to enforce their statutory rights and consumers are not put in the a position of having to argue

Question 3

Point 2: Freedom Specify

Answer 3

• A01: If a condition is breached the other party has the right to repudiate the contract (Poussard v Spiers)
• This respects the freedom of contract
• Allows parties to maintain control and predictability in a contract by determining in advance what will happen in certain events
• (H) Allowing the parties to specify a term prevents the courts from looking at the consequence as a whole for both parties, thus preventing termination for a trivial or technical breach

Question 4

Point 3: Innominate

Answer 4

• A01: An innominate term is one without classification, courts will look at the consequence of the breach when deciding a remedy (Hong Kong Fir v Kawasaki)
• Innominate terms unclear
• Lack of certainty in contract - parties unsure whether courts will apply it as condition/warranty
• (H) Good because it encourages parties to ensure all terms are clearly labelled and set out as condition/warranty
• Also: Lord Diplock - contracts often don’t specify the consequence for breaching each term which is why it’s necessary to have an innominate term

Question 5

Point 4: Breach not Sub

Answer 5

• A01: In Hong Kong Fir v Kawasaki the courts decided 18 weeks out of 2 year contract did not substantially deprive the C of the whole benefit and so couldn’t repudiate the contract
• Innominate terms leave C in financial difficulty like in Hong Kong
• Because only repudiate if they have been “substantially deprived of the whole benefit” so can still be somewhat deprived but not be entitled to repudiate
• (H) This is irrelevant because if they have not been substantially deprived they then must still have benefited from the contract so haven’t been placed in financial difficulty

Question 6

Additional Points

Answer 6

“sub deprived of benefit” is subjective

Question 7

Reforms

Answer 7

Abandon innominate terms and insist that they be labelled as condition/warranty