General Terms Evaluation

• Development of Innominate Terms and Judicial Discretion

  • terms were classed as a condition or warranty which should have created certainty
  • looked at status of term at the time the parties made the agreement
  • uncertainty - express contract terms are not classified explicitly as a condition or warranty
  • innominate term - depend on consequences of breach
  • judge has discretion when interpreting how to classify terms
  • Hong Kong Fir - classified as a warranty
• All Express Terms Classified as Conditions to Avoid Judicial Discretion

  • some parties with stronger bargaining powers will try to classify all express terms as conditions; Arnold v Britton
  • produce unfair results if courts apply literal interpretation, allow stronger party to reject the contract even if it is a minor breach
  • unclear how judges are meant to proceed when faced with a condition, wording can he important, can be ignore in favour of looking at commercial setting; Rainy Sky v Kookmin Bank
  • confusion in deciding role of conditions in a contract as it is based on an individual judge's discretion
• Flexibility

  • judges are able to look at the discussions before the contract was signed and the impact of the breach of this term to decide how it should be classified; Schuler v Wickman
  • shows how classification is not relevant as the classification can be altered by a judge
• Protection for Consumers

  • terms implied by statutes are classified as conditions
  • Consumer Rights Act 2015, s.9,s.10,s.11 - important to the supply of goods in a consumer contract
  • provides certainty for consumers if those terms are breach as it allows them to reject goods
  • additional protection to consumers who don't have to worry about innominate terms and judicial discretion
• Classification Will Impact Remedies

  • condition - sufficiently serious, continue and sue for damages, repudiate, repudiate and sue; Poussard v Spiers
  • warranty - damages; Rice v Great Yarmouth