Contractual Terms 2 - Conditions/Warranties/Innominate Terms

Define a warranty.

A warranty is a basic contractual term of minor significance, considering the contract in its entirety.

What remedy is available for breach of warranty.

Damages only.

What 5 factors will the court consider in determining whether there has been a warranty or representation?

1. the stage the representation was made.

2. if the contract is later put into writing and the statement is omitted.

3. if representor has some special skill.

4. importance of the statement.

5. if there is any indication from the maker that the statement can be relied upon and need not be verified.

Define a condition.

A condition is an essential term key to the contract’s purpose.

What remedy is available for breach of condition?

elect to sue for damages and/or repudiate the contract

Define a promissory condition.

a promise to bring about a particular event.

Regarding promissory conditions, what was held in Re Moore v Landaver?

a clause which stated there were 30 pieces of fruit in a tin was a condition so when the fruit was delivered in tins of 24 pieces, the buyer was entitled to terminate, despite no actual loss.

Define a contingent condition.

the contract only comes into existence on the occurrence of an event or ends on the occurrence.

Define an innominate term.

not labelled as a condition or a warranty, and the remedy will depend on the seriousness of the breach.

What remedy is available for breach of an innominate term?

depends on the seriousness of the breach.

How was an innominate term defined in Bunge Corporation v Tradax [1981]?

the parties have not made a condition and a breach of it may be attended by trivial, minor or grave consequences.

What was the test for determining an innominate term in Hong Kong Fir Shipping Company [1962]?

the nature of the term could be determined by reference to the effect of the breach.

What was held in Westpark Investments v Leisureworld?

the court held as there was still a substantial benefit from the contract, i.e., the lease from the plaintiffs which he operated an entertainment centre. It was not a breach of a condition and the remedy was in damages.