Condition, warranty or innominate

• What are the 3 types of term ?

  • Condition
  • Warranty
  • Innominate term
• What is a condition ?

  • A term in a contract that is so important that a failure to perform the obligation would destroy the main purpose of the contract
  • Goes to the root of the contract
  • Poussard v Spiers and Pond
• What happens when a condition is broken ?

  • The person suffering the failure is entitled to end the contract
  • Repudiation
• What is a warranty ?

  • A minor term of the contract
  • The main purpose of the contract can continue to be performed despite the breach
  • Bettini v Gye
• What happens when a warranty is broken ?

  • Only damages can be claimed for a breach of warranty
  • There is no right to repudiate the contract
• What are innominate terms ?

  • A term that is not clearly a condition or warranty
  • The effect of its breach may be viewed as a condition or a warranty depending on the consequences
  • Many terms in contracts are not clearly either a condition or a warranty until the breach of that term has occurred
  • Hong Kong Fir Shipping Co