Types Of Terms Flashcards
What are the terms of a contract ?
They are what the parties to the contract have agreed.
What are the 2 types of terms in a contract ?
Express terms , so specifically agreed between the parties, or implied in the contract.
What are the 2 approaches to classifying terms in contract law ?
Term based approach , which means suing the traditional method of categorising a term as either a condition or warranty. Breach based approach recognises that the effect of breach of a term will vary depending on their seriousness of the breach, hence the introduction of an “innominate term”
What is a condition ?
A condition is a central term of the contract that is so important that a failure to perform it would destroy the purpose of the contract.
What happens when a condition is breached + case ?
The victim may repudiate (end) the contract and sue for damages ( POUSSARD v SPIERS ).
What are 3 ways a term can be classified as a condition + cases ?
By agreement between the parties , identified due to customary trade usage (BUNGE v TRADAX, LOMBARD v BUTTERWORTH, TOPALSSON v ROLLS-ROYCE ), or implied by statute e.g. under the Sale of Goods Act 1979.
Does naming a term a condition make it one + case ?
Simply naming a term a condition does not necessarily make it so, (SCHULER v WICKMAN).
What is a warranty ?
It is a minor term of the contract where failure to perform it does not destroy the whole contract.
What happens when a warranty is breached + case ?
The contract can continue to be performed and so the victim cannot repudiate the contract, but can sue for damages ( BETTINI v GYE ).
What is an innominate term ?
A term in a contract that is not a condition or a warranty.
What happens when an innominate term is breached + case ?
As in HONG KONG FIR SHIPPING v KAWASAKI and THE HANSA NORD, the victim may repudiate the contract and/or sue for damages depending on the effect of the breach.
How do the courts determine if an innominate term is a condition or warranty ?
If it is so serious that C is deprived of the whole benefit of the contract, it’ll be treated as a condition. If the effect of the breach is such that C may still get some benefit, it’ll be treated as a warranty.
What terms are classed as conditions in the interests of ensuring commercial certainty + case ?
Expected readiness clauses ( MIHALIS ANGELOS ).
