Define The Various Contractual Terms

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Types of Term

  1. Condition

    This is a fundamental term in the contract

    • If you breach it - then the other party can:

      1) Repudiate (rip up) the contract
      2) Claim Damages

    • The case for this is Poussard v Spiers

  2. Warranty

    This isn't fundamental - it's just collateral to the main purpose of the contract

    • If you breach it - then the other party can:

      Claim Damages only

    • The case for this is Bettini v Gye

  3. Innominate

    This means we do not know what sort of term it is

    We don't know until the term is breached

    • If the term is breached and the other party loses the WHOLE benefit of the contract - then it was a condition

      If the term is breached and the other party loses PART of the benefit of the contract - then it was a warranty

    • The case for this is Cehave v Bremer

Express and Implied Terms

  1. An Express term is agreed verbally / written before the contract is agreed

  2. An Implied term is not agreed 

    Instead it is in the contract due to:

    1) Statute eg Sale of Goods Act
    2) Custom
    3) Courts imply a term to give the contract efficacy (The Moorcock case)

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