Condition what is a condition?

A condition is a major term, it is an essential term which goes straight to the root of a contract. A condition is the most important type of contractual term. There a wide range of remedies available to the breach of a condition due to it's great significance. One has the right to claim damages and terminate the contact, although parties may also decide to affirm. The case of Poussard v Spiers [1876] 1 QBD 410 is a good example of the breach of a condition. Poussard was engaged to appear in an operetta from the start of its London run for three months. The plaintiff fell ill and the producers were forced to engage a substitute. A week later Poussard recovered and offered to take her place, but the defendants refused to take her back.

The court held that the defendant's refusal was justified and that they were not liable in damages. What chiefly influenced the court was that Poussard's illness was a serious one of uncertain duration and the defendants could not put off the opening night until she recovered. The obligation to perform from the first night was a condition of the contract. Failure to carry out this term entitled the producers to repudiate Poussard's contract.

What is a Warranty?

A warranty is a minor term which is ancillary to a condition. Due to it's lesser significance, there are fewer remedies available for a breach. One has the right to sue for damages only, termination of contract is not permitted. In regards to an insurance contract however, if it is listed as a warranty it is considered a major term due to the nature of the contract. Therefore, more akin to a condition.

The case of Bettini v Gye (1876) 1 QBD 183 provides an outline for the use of a warranty. Bettini, an opera singer, was engaged by Gye to appear in a season of concerts. He undertook to be in London at least six days before the first concert for the purpose of rehearsals. He arrived three days late because of a temporary illness. He gave no advance notice and Gye refused to accept his services.

It was held that the plaintiff had been engaged to perform for a 15-week season and the failure to attend rehearsals could only affect a small part of this period. The promise to appear for rehearsals was a less important term of the contract. The defendant could claim compensation for a breach of warranty but he could not repudiate Bettini's contract.

What is an Innominate term?

An innominate term is a term which cannot be defined as being either a condition or a warranty. Innominate terms were introduced to add a degree of flexibility to the courts. If the effects of a breach are vast, the courts may treat the term as a condition (although not making it one). If the effect of the breach is minor then the courts will treat the term as a warranty. The remedies available for the breach of an innominate term is down to the courts discretion. If it is a serious breach it does not automatically entitle the party to terminate the contract, similarly, if it is a minor breach it does not automatically entitle the party to damages. One might argue the use of innominate terms causes a great deal of uncertainty.

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.

Created By
Harriet Ealden


Created with images by C. K. Hartman - "Vintage Wallet Insert: Leather Wallet Warranty" • libertygrace0 - "Ship"

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