Types Of Terms (Contract Terms) Flashcards
What are terms of a contract
What the parties have agreed on between themselves they define the obligations of both parties
Condition
An important terms if this isn’t complied with then the main purpose of the contract has been destroyed the contract can be repudiated if a condition is not met
Case for condition
Poussard v spiers
Held:she had broken her contract as her role was central to the performance the contract could be repudiated
Warranty
A minor term if this is breached the contract does not come to an end but damages can be claimed
Warranty case
Bettinie v gye
Held: The singer was entitled to damages to cover his loss of earnings. The organiser couldn’t repudiate the contract as this was a warranty, not a condition.
Condition and warranty AO3
P: there is a lack of flexibility because judges are not able to reach the most appropriate outcome
DP: they may think a term is a warranty, but precedent may suggest the term is a condition. They must then follow this.
WDP: however, if you just were to interpret the terms subjectively, this would be an example of judicial creativity this would conflict with the rule of law as the law would no longer be certain
Innominate terms
It is unclear whether this is a condition or a warranty the judge will decide if this is a condition or warranty depending upon the consequences of the breach
Innominate terms AO3 positive
P: Innominate terms allow judges to reach just decisions by using professional judgment
DP: a remedy is provided for the parties allowing them access to justice
WDP:furthermore it prevents contracts from coming to an end unnecessarily thus avoiding absurd outcomes
Innominate terms AO3 negative
P: this is an example of judicial creativity as each case is decided individually
DP:lawyers are unable to advise clients on the likely outcome of cases as they must wait for the judges decision on what outcome the breach will be
WDP:furthermore this conflicts with the rule of law as the the law is uncertain
Substantial benifit
If the breach denies you of substantial benifit of the contract then it is a condition if the breach doesn’t deny of substantial benifit of the contract then it is a warranty
case for substantial benfit
hing king fir shipping co.ltd v kowaski kisen kaisha ltd
held: rather than checking to see if it is a term or a warranty the court should look to the effect of the breach an ask if the breach has substantially deprived the innoncent party of the whole benifit of the contract
substantial benifit AO3
P: the introduction of innonimate terms is a positive thing as they prevent a contract from being repudiated when it isnt necessary for this to happen and it also allows judges to reach the appropiate outcome for the case in court
DP: hong knong fir shipping co lyd v kowaski kisen kaisha ltd has assisted to make this area of law more certain
WDP: furthermore innonimate terms level the playing field where the parties deal on unequal terms and also prevents a party suing where the results of the breach are trivial
intention of parties
judges can take into account intention of the parties meaning if there is an error the judge can make a decision based on what is just rather following a rule which could lead to injustice
intention of parties case
arnold v britton
held: cases would be judged on the basis of what the reasonable person having all background knowledge would have understood the contract to mean tenant were liable for repairs
intention of parties A03
P: an objective test is applied in arnold v britton thks leads to consisten and fair outcomes as the same test is being applied to all cases rather than looking at each case subjectively which could lead to inconsisten decisions
DP: lawers are able to predict the likey outcome of cases this saves litigation time and court resources
WDP: however it is unfair to compare a lay person to someone having all the background knowledge of the issue at hand
