CONDITIONS WARRANTIES AND INNOMINATE TERMS

In the course of negotiation a lot of statements are made, these statements are known as representation and if false they are known as misrepresentations.

Those that turn out to be part of that contract become its terms.

Terms are the rights and obligations of each party in the contract. The terms may be EXPRESS, that is, specifically agreed upon, or IMPLIED from the parties’ behaviors. A further classification will lead to these contractual terms being classified as conditions warranties and innominate terms.

CONDITIONS AND WARRANTIES

The terms in a contract do not carry the same weight. Some terms are more important than others. A condition is a major term of the contract which goes to the root of the contract. If a condition is breached the innocent party is entitled to repudiate, that is end, the contract and claim damages:

Poussard v Spiers (1876)

X entered a contract to perform as an opera singer for three months. She became ill five days before the opening night and was not able to perform the first four nights. Z then replaced her with another opera singer. Held: X was in breach of condition and Z was entitled to end the contract. X missed the opening night which was the most important performance as all the critics and publicity would be based on this night.

Conditions can further be classified into;

1. Condition precedent– this is a term pre-condition to the formation of a contract, i.e, a term that must be satisfied before the contract becomes operational
2. Condition subsequent– this is a condition whose occurrence may affect the rights of the parties already in a contract, For instance, a condition that the contract remains valid until a stated event occurs, occurrence of the stated event may bring the contract to an abrupt end.

Warranties are minor terms of a contract which are not central to the existence of the contract. If a warranty is breached the innocent party may claim damages but cannot end the contract:

Bettini v Gye (1876)

X  agreed by contract to perform as an opera singer for a three month period. He became ill and missed 6 days of rehearsals. The employer sacked him and replaced him with another opera singer. Held: X was in breach of warranty and therefore the employer was not entitled to end the contract. Missing the rehearsals did not go to the root of the contract.

Both conditions and warranties can be express or implied.

INNOMINATE TERMS

Innominate or intermediate terms combine the features of both conditions and warranty in the terms of a contract.

In shot an innocent party may or may not win depending on the context

Whereas normally any breach of condition, however minor, will entitle the innocent party to treat the contract as repudiated.

A breach of an innominate term will do so, only if the breach itself is so serious as to deprive the innocent party of substantially the whole benefit of the contract