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Terms - Classification and Implication
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Terms - Classification and Implication
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Terms – Classification of Terms & Implied TermsA Term May Be a…
Condition – a right to sue for damages and to terminate the contract.
Warranty – only a right to sue for damages.
Innominate/intermediate – legal remedy depends on the factual consequence of the
breach.
Bentsen v Taylor Sons & Co (1893)
‘There is no way of deciding that question [whether term is condition or warranty]
except by looking at the contract in the light of the surrounding circumstances and
making up one’s mind whether the intention of the parties, as gathered from the
instrument itself, will best be carried out by treating the promise as a warranty,
sounding only in damages, or as a condition precedent, the failure to perform which
the other party is relieved of his liability…’ - per Bowen L.J.
How Do We Tell the Difference?
Condition – a statement of fact or a promise which forms an essential term of the
contract – where failure of performance would lead to the essence of the contract
being destroyed.
Behn v Burness (1863).
‘The statement is more or less important in proportion, as the object of the contract
more or less depends upon it…’ – per Williams, J.
Warranty.
Charter v Hopkins (1996).
‘…an express or implied statement of something which the party undertakes shall be
part of the contract, yet collateral to the express purpose of it…’ – per Lord Abinger.
Two Cases
Poussard v Spiers (1875).
The Claimant (Poussard) was an opera singer. She was contracted by the defendant
to perform in that capacity for a duration of three months. This was to subject to
certain conditions, such as a salary of £11 per week, a start of “on or about” the
14th of November and an option to re-engage the Claimant’s services for another
three months for a salary not exceeding 14 pounds per week.
Instead of the 14th of November however, the launch performance was subsequently
scheduled for the 28th of November, to which the Claimant gave no objection.
However, she fell ill just before the start of the opera and could not sing for the first
three days. The defendant hired another singer as potential cover and then actual
cover when the claimant could not sing for the first three days of performances.
, Once the Claimant was well again, she wanted to take up her position in the
performance but this was refused by the Defendant.
An action for wrongful dismissal was then launched against the defendant.
At trial, the jury found in favour of the defendant and awarded them the right to
claim £83 from the Claimant, as it had been reasonable to hire her replacement. The
Claimant appealed against this.
It was held that failure to turn up did amount to a breach of a condition of the
contract as this went to its very root and that Spiers were therefore free to rescind
the contract.
The obligation to appear in the operetta from the first night was a condition – the
breach of which entitled the producer to dispense with her services.
Bettini v Guy (1875).
The claimant, Alessandro Bettini (a tenor) entered into an agreement with the
defendant, Frederick Gye. The terms of that agreement were that Bettini would not
perform within 50 miles of London in any venue, apart from the Royal Italian Opera
Covent Garden within the time period of 1 January 1875 to 1 December 1875.
Further, between 30 March 1875 and 13 July 1875, Bettini would perform for Gye in
return for £150 per month. The agreement also stipulated that Bettini must be in
London 6 days before rehearsals “without fail”.
Bettini however arrived two days before his performance period was to begin. Gye
however declined to have him perform at his opera.
Blackburn J held that this requirement did not amount to a condition, but was
instead a warranty which meant that Gye could not terminate the contract on that
basis. A breach of this warranty is not a repudiation of the contract, and Gye would
only have an action in damages.
In order for to determine whether the contract was repudiated, the court needed to
ask whether what was breached was a term.
‘Going to the root of the matter, so that a failure to perform it would render the
performance of the rest of the contract by the plaintiff a thing different from what
the defendant has stipulated for’ – Blackburn J.
The rehearsal clause was not vital to the main performance agreement and was
therefore only a breach of a warranty.
Wallis, Son & Wells v Pratt & Haynes (1910)
‘Not all obligations arising from a contract are of equal importance. Some will go
directly to the substance, i.e. they are essential to its very nature and their non-
performance may be rightly considered as a substantial failure to perform the
contract at all. There are other obligations, which although they must be performed
are not so vital that a failure to perform them goes to the substance of the contract.
The former are conditions, the latter, warranties’ - Per Fletcher Moulton L.J.
L. Schuler AG v Wickman (1974)
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