Contract Law for BeginnersClassification of terms International Law 2
Welcome! The purpose of this page is to help any person understand a little bit about contracts. As you know contracts are all around us and can be a bit tricky, not to mention sometimes annoying. but fear no more. after three simple definitions about the terms of a contract you will feel like a pro! Let's begin!
A condition is a major term of the contract. a party guarantees something which has to be true or promises it will be true. this term goes to the "heart" or "root" of the contract. therefore there are serious consequences if someone breaches this term. you can sue for damages and termination of contract. to put it into practise for easier understanding - in poussard v spiers a singer was ill and could not perform in the opera. her contract was terminated because the performance on the opening night was the most important night and she was absence - she breached a condition of the contract.
this is a minor term of the contract. it is collateral to the main purpose. however it does not mean the contractual obligations are discharged. the term can be merely ancillary to the main thrust of the contract. here if it is breached you can sue only for damages again it will be easier to explain it with an example - in bettini v gye the requirement for a 6 day rehearsal was a mere ancillary and it could be only sued for damages.
This is where it gets tricky. when distinguishing a condition from a warranty it raises the importance attached to the terms when considering against the total contract. if there is no express definition what the term is, the courts have classified this as an innominate or intermediate term. when dealing with breaches it considers the affect of the breach itself and then decides on the remedy - damages or termination of contract. a test is made to determine whether the innocent party was so deprived of the benefit of the contract that it deserves a termination or if it was not that significant it only deserves damages. as you can see it is really hard. there is a distinction between a condition and an innominate is that a condition is repudiatory, but a innominate term can be as well if the breach deprives the party of the whole of the benefit. an innominate term can be broken in a trivial manner which grants damages or it can breached fundamentally and give the right to terminate the contract. I hope i did not lose you.
hong kong fir shipping co. ltd v kawasaki kisen kaisha ltd  1 all er 474
from this case the concept of innominate terms originated. the case regarded a ship chartering. the ship was required to be 'in every way fitted for ordinary cargo' and the ship had to be 'seaworthy'. the courts discharged this definition and it was not defined as a condition however it did deprive the innocent party from the whole benegit. it can be argued that this case brings a larger level of uncertainty. the parties will not know their rights until they go to court.