OCR A2 Law - The Law of Contract - The Importance of 'Classifying Terms' (2)

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  • Created by: Majid
  • Created on: 27-04-13 21:19

The Importance of 'Classifying Terms' (2)

Warranties: Minor term of a contract, a breach of which will allow innocent parties to claim damages only - contract continues.

CASE: "Bettini v Gye". Facts were similar to Poussard except the singer was 3 days late for rehearsals. HELD: This was just a breach of warranty as it didn't allow the producers to repudiate.

AO2: Parties should be allowed to have minor terms of the contracts as in certain situations for a contract to continue. It would avoid wasted expenditure. Here it is fair that it was only a minor term and the singer was only late for rehearsals so it seems fair the contract should continue.

Innominate Terms: A term without classification and is a new approach, created by judges. Where terms aren't strictly categorised as conditions or warranties. Judges look to the 'consequences' of the breach. The more serious the breach parties could be awarded damages and repudiate contract. The less sessions will only amount to damages. 

Case: "The Hong Kong Fur Shipping Case". In this case a ship charterd for 2 years, was in poor condition and was out of service for 18 weeks. The claimant claimed for breach of contract but it failed. Lord Diplock said obiter that you shouldn't simply consider whether a term was a condition or a warranty, but to also look at the consequences of the breach. 

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