1.) What do you understand by a ‘condition’, ‘warranty’ and ‘innominate term’What are the remedies available for breach of these different types of term?

A condition is an act or an event that affects the parties' contractual duties.These conditions are categorized by the point in time that the condition must occur. A condition may be either express or implied. An express condition is clearly stated and embodied in specific, definite terms in a contract, lease, or deed.If a condition is breached the innocent party is entitled to repudiate (end) the contract and claim damages. Poussard v Spiers (1876) is a good example of breach of contract , Poussard was hired to sing at an opera by Spiers for a period of three months , she became ill 5 days before the opening night and could not perform , Spiers was allowed to terminate the contract as this was a breach of contract.

A warranty generally means a guarantee or a promise which provides assurance by one party to another that specific that specific facts or conditions are true or will happen.If a warranty is breached the innocent party may claim damages but can not end the contract. For example in Bettini v Gye (1876) Bettini was hired to sing as an opera singer but was after not showing up for rehersals it was held that the employer was not allowed to fire him as missing the rehearsals did not go to the root of the contract.

The innominate term approach was established in the case of Hong Kong Fir Shipping. Rather than classifying the terms themselves as conditions or warranties, the innominate term approach looks to the effect of the breach and questions whether the innocent party to the breach was deprived of substantially the whole benefit of the contract. Only where the innocent party was substantially deprived of the whole benefit, will they be able to treat the contract as at an end.

(2) Provide a case commentary on Hong Kong Fir Shipping v Kawasaki Kisen KaishaLtd [1962] 1 All ER 474 CA.

Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26 Court of Appeal

A ship was chartered to the defendants for a 2 year period. The agreement included a term that the ship would be seaworthy throughout the period of hire. The problems developed with the engine of the ship and the engine crew were incompetent. Consequently the ship was out of service for a 5 week period and then a further 15 week period. The defendants treated this as a breach of condition and ended the contract. The claimants brought an action for wrongful repudiation arguing the term relating to seaworthiness was not a condition of the contract.Held:The defendants were liable for wrongful repudiation. The court introduced the innominate term approach. Rather than seeking to classify the term itself as a condition or warranty, the court should look to the effect of the breach and ask if the breach has substantially deprived the innocent party of the whole benefit of the contract. Only where this is answered affirmatively is it to be a breach of condition. 20 weeks out of a 2 year contract period did not substantially deprive the defendants of whole benefit and therefore they were not entitled to repudiate the contract.

Seminar group : 11am thursday Dr Monica Ingber (I dont know the number)


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