Express and implied terms
The different between representations and terms
Terms of a contract is set out the obligations on the parties under
an agreement
Terms can be expressed- laid down by parties themselves
Terms can be implied- means the terms are assumed by the court or
by statute
Terms can be classified according to their importance: conditions,
warranties, and innominate terms
Terms should be distinguished from mere representations
Have no liability attached to them as they have just induced a party
to enter a contract
However, if representation has been false and has wrongly induced
the other party to enter the contract, then this is misrepresentation
and will attach liability
Terms should also be extinguished from mere opinions
Have no liability attatched to them either
Other parties' opinion is no more valid than our own and cannot rely
on it
However, if comes from an expert, entitled to rely on it and so the
opinion of experts is said to attach liability
Importance of terms
Conditions:
▫ Condition is term of contract
▫ Is so important to a contract that a failure to perform the condition
would render the contract meaningless
▫ If condition has been breached, claimant is entitled to the fullest
range of remedies, damages or repudiation, or both
▫ Any term implied by statute is also regarded as a condition, in terms
of the effect of the breach
The Mihalis Angelos (1970)
, It held that an “expected readiness to load” clause was a condition,
meaning its breach entitled the charterer to terminate the contract
immediately.
Warranties:
▫ A term of contract which is minor
▫ If it has been breached, injured party can be breached, the injured
party can sue for damages, but not for repudiation (refusal)
▫ Warranties are regarded as obligations that are secondary to major
purpose of contract
Bettini v Gye (1876)
Court held that missing a few days of rehearsals was a breach of a
warranty rather than a condition, so the employer was not entitled to
terminate the singer’s contract.
Innominate terms:
▫ Cannot be identified as either warranties or conditions
▫ Identified as innominate until contract has been breached
▫ A contract will only be repudiated in the event of a breach if it is fair
to both sides
▫ It is uncertain what the remedy will be until the extent of the breach
has been considered, and the judge declares the appropriate
remedy
Hong Kong Shipping v Kawasaki (1962)
It held that contract terms should not be rigidly classified as “conditions”
or “warranties,” and the court decided that the seaworthiness clause was
an innominate term, breached only to the extent that it did not deprive
the charterer of the whole benefit of the contract.
Express terms
In order to be a term of the contract, statement must be
incorporated
Courts have developed some guidelines:
The importance of the statement
The different between representations and terms
Terms of a contract is set out the obligations on the parties under
an agreement
Terms can be expressed- laid down by parties themselves
Terms can be implied- means the terms are assumed by the court or
by statute
Terms can be classified according to their importance: conditions,
warranties, and innominate terms
Terms should be distinguished from mere representations
Have no liability attached to them as they have just induced a party
to enter a contract
However, if representation has been false and has wrongly induced
the other party to enter the contract, then this is misrepresentation
and will attach liability
Terms should also be extinguished from mere opinions
Have no liability attatched to them either
Other parties' opinion is no more valid than our own and cannot rely
on it
However, if comes from an expert, entitled to rely on it and so the
opinion of experts is said to attach liability
Importance of terms
Conditions:
▫ Condition is term of contract
▫ Is so important to a contract that a failure to perform the condition
would render the contract meaningless
▫ If condition has been breached, claimant is entitled to the fullest
range of remedies, damages or repudiation, or both
▫ Any term implied by statute is also regarded as a condition, in terms
of the effect of the breach
The Mihalis Angelos (1970)
, It held that an “expected readiness to load” clause was a condition,
meaning its breach entitled the charterer to terminate the contract
immediately.
Warranties:
▫ A term of contract which is minor
▫ If it has been breached, injured party can be breached, the injured
party can sue for damages, but not for repudiation (refusal)
▫ Warranties are regarded as obligations that are secondary to major
purpose of contract
Bettini v Gye (1876)
Court held that missing a few days of rehearsals was a breach of a
warranty rather than a condition, so the employer was not entitled to
terminate the singer’s contract.
Innominate terms:
▫ Cannot be identified as either warranties or conditions
▫ Identified as innominate until contract has been breached
▫ A contract will only be repudiated in the event of a breach if it is fair
to both sides
▫ It is uncertain what the remedy will be until the extent of the breach
has been considered, and the judge declares the appropriate
remedy
Hong Kong Shipping v Kawasaki (1962)
It held that contract terms should not be rigidly classified as “conditions”
or “warranties,” and the court decided that the seaworthiness clause was
an innominate term, breached only to the extent that it did not deprive
the charterer of the whole benefit of the contract.
Express terms
In order to be a term of the contract, statement must be
incorporated
Courts have developed some guidelines:
The importance of the statement
