Classification of Terms conditions, warranties &Innominate terms

Types of terms

  1. Conditions
  2. Warranties
  3. Innominate terms

Conditions

  • This term is essential as it is at the route or heart of a contract.

Remedies available for breach of this term include:

  1. The right to claim damages
  2. The right to terminate a contract

Case example

  • Poussard v Spiers (1876) 1 QBD 410:
  • Madame Poussard entered a contract to perform as an opera singer for three months. She became ill five days before the opening night and was not able to perform the first four nights. Spiers (producers) then replaced her with another opera singer.
  • Held: Poussard was in breach of condition and Spiers was entitled to terminate her contract as she missed the opening night, and a great amount of importance was placed on that night.

If parties label a term a condition, then the court may uphold this, although not always.

Warranties

Warranties are subsidiary terms, and are therefore minor.

  • If a person breaches a warranty, then that person is only entitled to claim damages, and cannot terminate the contract.
  • A warranty is only equivalent to a warranty depending on the nature of the contract. e.g. an insurance contract.

Case example:

Bettini v Gye (1876) 1 QBD 183:

  1. Bettini agreed by contract to perform as an opera singer for a three month period. He became ill and missed 6 days of rehearsals. The employer sacked him and replaced him with another opera singer.
  2. Held: Bettini was not in breach of warranty and therefore the employer was not entitled to end the contract. Missing the rehearsals did not go to the root of the contract.
  • Some terms implies by statute are classified as either a condition or warranty .e.g ss.12-15 Sale of Goods Act 1979 are all conditions/ Impact of Consumer Rights Act 2015

However, sometimes it is often difficult to determine how serious a breach is because the nature of a term may be broad. As a result to make the process of taking legal action much smoother, the courts have created:

Innominate Terms

  • These are intermediate terms, and the importance attached to such terms depends on the nature and effects of a breach made in a contract.
  • This category appears if it is not possible to state at the outset with absolute certainty, the consequences of a particular breach of a term.
  • If someone breaches this term, the consequences could be serious.
  • If the effects of a breach are serious, then the courts will view it as acting like a condition in that particular situation. This however, does not mean that it is a condition.
  • If the effects of a breach are minor, it acts like a warranty. This relates to qualitative rather than quantitive terms, thus creating flexibility.
  • The status does not depend on the status of the term, but on the effects of the breach. The court has greater remedial flexibility and can focus on the consequences of the breach.

Benefit of Innominate Terms (flexibility)

  • The courts have a greater degree of remedial flexibility.
  • It can focus attention on the consequences of the breach.

With innominate terms, the right to terminate the contract is directly related to the factual consequences of the breach. i.e:

  • If there is any detriment caused or likely to be caused to a party
  • If there has been a delay
  • If there is a cost of fixing the problem
  • One must consider whether the breaching party is enjoying several opportunities that the suffering party are not.
  • If damages are given, will this be enough to compensate the claimant?
Created By
Jazzmine Adjei-Ampofo
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