Seminar 6 Contract Law

Three types of contract term

1) Conditions- a major term which is vital for the contract to go forth, remedies for breach of conditions include termination of a contract

2) A warranty is a term term which is ancillary to the main purpose. Remedies for a breach of a warranty include the right to sue for damages.

3) An innominate term is a flexible term, where the levels of damages awarded depending on the breach. If a serious breach remedies could be similar as if it was a breach of a condition.

Hong Kong Fir Shipping v Kawasaki Kisen Kaisha Ltd [1962] 1 All ER 474 CA Case summary

The owners were to "maintain her in a thoroughly efficient state in hull and machinery during service." The ship was delivered to the charterers in February 1957 in reasonably good condition, but chiefly owing to an inadequate engine room staff, there were serious breakdowns on the first voyage, resulting in lengthy delays and considerable expense on repairs. In June 1957, the charterers, who had no reasonable grounds for thinking that the vessel could be made seaworthy before September 1957, repudiated the contract. The ship was in fact made thoroughly seaworthy by the middle of September, and the owners sued the charterers for wrongful repudiation.

Although the owners were admittedly in breach of their obligation to deliver a seaworthy ship, seaworthiness was not a condition of the charterparty the breach of which entitled the charterers at once to repudiate; since, therefore, the delays caused by the breakdowns and repairs were not sufficient for the contract to be frustrated, the charterers' claim failed and the appeal must be dismissed.

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