Classification

Question 1

What are contractual terms?

Answer 1

Rules of an agreement.
## Footnote
They define the rights and obligations of the parties.

Question 2

What are the three classifications of contractual terms?

Answer 2

Conditions, warranties, and innominate terms.
## Footnote
Each classification determines the remedy available on breach.

Question 3

What is a condition in contract law?

Answer 3

An essential term that goes to the root of the contract.
## Footnote
Failure to fulfil a condition defeats the contract’s purpose.

Question 4

What is the effect of breaching a condition?

Answer 4

The contract may be repudiated and damages awarded.
## Footnote
The innocent party can end the contract.

Question 5

Which case shows that breach of a condition allows termination?

Answer 5

Poussard v Spiers & Pond.
## Footnote
Missing rehearsals breached a condition and ended the contract.

Question 6

What is a warranty in contract law?

Answer 6

A minor term that does not go to the root of the contract.
## Footnote
Breach does not defeat the contract’s main purpose.

Question 7

What is the effect of breaching a warranty?

Answer 7

Only damages are awarded.
## Footnote
The contract continues.

Question 8

Which case illustrates breach of a warranty?

Answer 8

Bettini v Gye.
## Footnote
Missing rehearsals breached a warranty, so only damages were available.

Question 9

How do courts decide between a condition and a warranty?

Answer 9

By assessing whether the term goes to the root of the contract.
## Footnote
If it does, it is a condition; if not, a warranty.

Question 10

Which cases illustrate the ‘root of the contract’ test?

Answer 10

Poussard v Spiers & Pond and Bettini v Gye.
## Footnote
They contrast condition vs warranty.

Question 11

When is statutory classification of a term conclusive?

Answer 11

When legislation specifies a term as a condition or warranty.
## Footnote
Courts must follow statute.

Question 12

Which statute classifies certain terms as conditions?

Answer 12

Sale of Goods Act 1979.
## Footnote
Quality-related terms are conditions in B2B contracts.

Question 13

Can parties decide whether a term is a condition or warranty?

Answer 13

Yes, parties may specify the classification.
## Footnote
However, courts can intervene.

Question 14

Which case shows courts can reclassify an unreasonable condition?

Answer 14

Schuler v Wickman.
## Footnote
An unreasonable condition was treated as a warranty.

Question 15

What is an innominate term?

Answer 15

A term that may be a condition or warranty depending on the breach.
## Footnote
Its seriousness determines the remedy.

Question 16

When is breach of an innominate term treated as serious?

Answer 16

When it deprives a party of substantially the whole benefit of the contract.
## Footnote
This allows termination.

Question 17

Which case established the innominate term approach?

Answer 17

Hong Kong Fir Shipping.
## Footnote
Serious deprivation justified termination.

Question 18

How do courts generally view innominate terms?

Answer 18

They are reluctant to use them.
## Footnote
Courts prefer certainty.

Question 19

Which case created an exception for shipping contracts?

Answer 19

Bunge Corporation.
## Footnote
‘Readiness to load’ clauses are always conditions.

Question 20

How are innominate terms treated in sale of goods cases?

Answer 20

Only serious breaches justify termination.
## Footnote
Minor breaches lead to damages only.

Question 21

Which case applies innominate terms to sale of goods?

Answer 21

Cehave v Bremer.
## Footnote
Only serious deprivation justified termination.