Hey i'm a bit confused in this area of contract law and was wondering if anyone could help me out.
How do you decide if a term in a contract is a condition or warranty if it doesn't say it is either one of them?
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Condition v Warranty watch
- Thread Starter
- 21-02-2006 15:57
- 21-02-2006 16:29
There is loads to say on this point...
Obviously it's a matter of interpretation, usually based on the intention of the parties at the time of forming their contract...
Significance of the distinction relates to remedies - mere damages for breach of warranty, but right to either choose to repudiate the contract and claim damages / continue performance and claim damages where a condition is breached.
It's a while since I did this but here are some vague points:
* Bettini v Gye  - conditions go 'to the root of' a contract (e.g. in a contract for a shipment where time is stated to be 'of the essence', a term stating the deadline for shipment would probably be a condition)
* I have a feeling Schuler v Wickman Tools is relevant but can't remember exactly why! (try www.lawteacher.net)
* More recent approach as seen in Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha  - innominate/intermediate terms - consequences of breach only known after breach has occured etc so status of a term assessed in light of this
Sorry I can't be less vague but I don't have the time to look back through all my notes, hope that's of some help.
- 21-02-2006 16:48
Schuler v. Wickman is relevant as, despite the term in breach being expressly stated as being a condition in the contract, the House of Lords held that (Lord Wilberforce dissenting) the term is not a condition as a single breach would entitle the innocent party to terminate and that can't have been in the intention of the parties. terrible decision, IMO- read Wilberforce's dissent.
also of relevance is Arcos v. Ronaasen- all about opportunistic withdrawals for breach of conditions (contrast with The Hansa Nord  QB 44)
Arcos also serves as a useful comparison with the consequential approach of the Diplock Test in Hong Kong Fir