Types of Term Flashcards
- The terms of a contract are what the parties to the contract have agreed. These terms can either be…
The terms of a contract are what the parties to the contract have agreed. These terms can either be specifically agreed between the parties, known as express terms, or implied in the contract.
- There are two approaches to classification of terms – Term Based (Traditional) and Breach Based (Modern)…
There are two approaches to classification of terms – term based and breach based.
Term based means using the traditional method of categorising a term as either a condition or warranty.
The more modern breach based approach recognises that the effect of breach of a term will vary depending on the seriousness if the breach, hence the introduction of an “innominate term”.
- Conditions can be defined as such by the parties identifed due to…
Conditions can be defined as such by the parties, Identified Due to Customary Trade Usage (Bunge v Tradax, Lombard v Butterworth), or Implied By Statute, for example under the Sale of Goods Act 1979.
However, simply naming a term a condition does not necessarily make it so, as in Schuler v Wickman.
- A Warranty is a…
A WARRANTY is a minor term of the contract where failure to perform it does not destroy the whole contract. When a warranty is breached, the contract can continue to be performed and so the victim cannot repudiate the contract, but can sue for damages, (Bettini v Gye).
- In recent years the courts have identified the INNOMINATE TERM as a term in a contract that is…
Here…
In recent years the courts have identified the INNOMINATE TERM as a term in a contract that is not clearly a condition or a warranty. As set out in Hong Kong Fir Shipping v Kawasaki and The Hansa Nord, when an innominate term is breached, the victim may repudiate the contract and sue for damages if the consequence of the breach is so serious that it deprives them of substantially the whole benefit of the contract.
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