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Lecture notes Contract Law (LAW1030) Contract Law, ISBN: 9780198855293
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SXL 1112 Contract Law
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18th May 2020
Contract Law
SXL 1112 Exam
Answer TWO questions,one from SECTION A and one from SECTION B
SECTION A
Question 2
Explain the distinctions between conditions, warranties and innominate terms. Ensure that you
illustrate your answer with reference to appropriate law.
.In understanding the classification of contractual terms and conditions, warranties and
innominate,it should be noted that the law of contract now acknowledges that not all breaches of
a contract are equated to the same level of seriousness, hence the need for separation of
terminologies.A proportion of contract breaches could be so severe that they need the innocent
party to put a swift end to contract.While some have the capability of being appropriately dealt
with by the usage of damages.Signifying that Disparate cases can be utilized to examine both the
meaning and distinction of the terms as well as the way in which the terms are used to reach a
resolution to a twist where a contract breach may have taken place.
The sale of goods act 1979 led to the English courts handling contract breaches by labelling and
defining the terms in a contract as conditions, warranties or innominate terms, this gave each
case individuality instead of a one size fits all approach, to solve contractual issues or breaches.
A condition in a contract is fundamental term that is at the crux of any contract.Failure for a
party to perform a condition will ultimately alter the original contract resulting in the innocent
parties right to repudiate a contract.The cases of Poussard V Spiers (1876) 1 QBD 410 and
Bettini v Gye (1876) 1 QBD 183 illustrate that a breach of a obligation in a contract has to be
extremely serious for it to be considered a breach of a condition. As the issue found in Poussard
V spiers (1876) 1 QBD was associated with a breach of condition however though Bettini V Gye
(1876) 1 QBD was a breach of a contract that did not concern the root or fundamentals of a
contract therefore was seen to not be a conditional contract.
A warranty is much less significant in a contract, as any breach of it will only ever give rises to
damages and repudiation is not an option.In the case Wills v Amber [1954] 1 a person was sold a
of a four- berth motor with the warranty of the boat hull being in good condition which lead to
, the buyer agreeing to the contract, later however discovering the hull was rotten.The contract had
not be changed or altered by the fact therefore they were awarded damages.Determining that
though failures of warranty may have consequences, they are not as severe as the ones found at
the heart of a contract therefore can be dealt with damages.
Another clear example of the usage of warranty is in the Sales of Goods act 1979 whereby
specific implied terms found in contracts terminology such as title or quality are categorically
labelled as a condition or warranty.Though the Sales of goods act of 1979 makes it easy to
determine whether or not a term in a contract is a condition or warranty it is much more complex
to determine in practice.As not every obligation or statement in a contract conveniently fit into
the two categories of condition or warranty therefore a resolution is not straightforward.
The usage of the classification of terms into conditions and warranties in contracts is extremely
beneficial in relation to the consumer contracts.Highlighted in scenarios where contracts have
strict regulations that make a supplier liable if their goods are not to a certain standard.Meaning
that consumer who buys an item and finds it defective will generically want to return it and get
there money back.This strict liability on the supplier as opposed to the consumer removes the
need for the availability of termination to be determined by a case by case basis.
On the other hand a issue in the classification of terms into conditions and warranties is that it
symbolizes a ‘all or nothing’ resolution to breaches of contracts.Depicting that if a term is
considered to be a condition any breach of it no matter how big or small will give the other party
the right and opportunity to prematurely terminate.Alongside this if a term is seen to be a
warranty with no breach the result consequence would be the in damages which is not the case
all of the time.
This problem came into practice with Hong Kong Fir Shipping co Ltd v Kawasaki Kisen
Kaisha.The particular contractual clause that proved problematic was the obligation of
‘seaworthiness’ in a time charter, which in many ways could have been broken.The ship if
lacking of essential medical supplies making the ship ‘unseaworthy’ just the same would apply
if the ship was at risk of sinking.The courts found that where the right to terminate a contract
relied on the consequences of breach otherwise known as innominate terms.A innominate term is
a term that is not clearly distinguished or defined, until the seriousness of the breach is
discovered,This specific case embodies that not all contractual obligations fall directly into the
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