Types Of Terms

Question 1

Traditional approach: the traditional approach considers how important the term is for fulfilling the essential part of the contract

Question 2

Traditional approach: a condition is a term within a contract that is central to its performance. A breach of this allows the innocent party to rescind/repudiate the contract

Answer 2

Poussard and Spiers v Pond

Question 3

Traditional approach: in commercial contracts, if there is an ‘expected readiness’ term this is a condition

Answer 3

The Mihalis Angelos

Question 4

Traditional approach: a warranty is a minor term in a contract that is not central to its performance. A breach of this allows the innocent party to claim damages

Answer 4

Bettini v Gye

Question 5

Traditional approach: the traditional approach to classifying a term is unfair, as the consequences of a breach can be minor, but if it is central to the contract, the innocent party can rescind it

Answer 5

Arcos v Ronaasen

Question 6

Modern approach: this focuses on the consequences of the breach of a term through innominate terms

Question 7

Modern approach: an innominate term is not identifiable as either a warranty or condition. The consequences of the breach of the terms dictate how it is to be treated. In determining the breach consider whether a party has been substantially deprived of the whole benefit

Question 8

Modern approach: if the breach has a serious effect it is a condition, but if it has a minor effect it is treated as a warranty with the same consequences as the traditional approach

Answer 8

The Hansa Nord

Question 9

Modern approach: the term is treated as a warranty as this did not substantially deprive the D of the whole benefit of the whole contracts

Answer 9

Hong Kong Fir Shipping

Question 10

Modern approach: where the parties have described a term in a contract as a condition, the courts may be willing to treat it as an innominate term/warranty where the consequences of the breach is minor

Answer 10

Schuler v Wickman

Question 11

Modern approach: where the intentions of the parties are clear within the contract regarding time is of the essence for best repayments and the consequences for breaching this term understood, the term is treated as a condition even when the breach is minot

Answer 11

North Lombard Central PLC v Butterworth

Question 12

Modern approach: the culminate effects of the breaches can be considered if there is more than one

Answer 12

Rice

Question 13

Modern approach: the culminate effects of the breaches can be considered if there is more than one especially if the breaches have resulted in the agreement not being substantial performed or is treated as a condition

Answer 13

Rice