Anaya Thapar Unit 6 assignment 2
Unit 5 Assignment 2
P3: Describe the different types of terms in a contract.
Contracts that are created have terms. Contract terms detail what parties have agreed within the
contract. These terms are those that have beed specifically agreed between both parties, which is
known as an express term. Express terms involve the law in the contract which is known as an
implied term. Implied terms can be implied by the courts or the Acts of Parliament.
Express terms that are in a contract are agreed during the process of negotiation which leads up to
an offer being accepted. It could be very straightforward, for example buying a coffee from a cafe.
There are different types of contracts with different expressed terms that are used. These types of
expressed terms are: conditions, warranties and innominate terms. These can apply to standard form
contract and implied terms
What is a condition?
Conditions are terms that in a contract are central. When someone makes a contract to rent a car it
is central to the contract that the car accelerates and breaks reliably. If there is a condition that is
broken the person that is affected can end the contract when they want as they are entitled to.
There are circumstances affecting the way that people live and work which regards their well
being. In a contract there is an expressed condition which is stated clearly in a definite term
contract, lease or deed. A implied condition is presumed by the law upon the nature of a
transaction and what would be reasonable to do if a event occurs.
In the case of Poussard V Spiers and Pond 1876 where a condition can be seen. It states that a
lead star agreed to preform in a production for a season of performances and rehearsals. After she
had failed to attend the first performances, the role was given to the understudy and she was not
allowed to preform again. She sued for breach of contract, however the court stated that she had
broken the contract by not attending the opening night. In the case it states that the legal principle
is where a breach of a condition allows the entitled the affected party to be repudiate the contract.
What is a warranty?
A warranty is a minor term of the contract that is made that allows a claim to be made by the
affected party to the contract. Though the damages can be payable. For example if the radio in a
rental car works intermittent;y, this would be classified as a warranty. It is also known as a written
guarantee which is issued by the manufacturer, which promises the repair or replacement if it is
necessary within a period of time which is specific. It is a minor term where a breach does not end
a contract but allow a damage to be claimed.
In the case Bettini v Gye 1876. Where a Singer was to be preforming in a season of concerts and
six rehearsals. However, failed to appear to the first three days of rehearsal. He was replaced along
with being sued by the concert organisers. The court decided that the rehearsals were not central to
the contract so the concert organisers couldn't terminate his contract. The absence could have
caused extra expense, however the rehearsals could have been arranged in a different way. The
legal principle is a breach of a contracts warranty only allows claims for damages. The contract
will continue and will not end with this breach.
What is a innominate term?
It is where the court decides on a category of a term which is based on all the evidence,
particularly on any description of the term in a contract. In some circumstance a term can not fall
into a classification of either a condition or a warranty. The courts will call any term that is not
defined as a warranty or condition is a innominate term. The effects of this term may be a
condition or a warranty. It is unclear whether a term is a condition or a warranty until the breach of
the term and the consequences that have been investigated by the courts.
As presented in the case of Hong Kong Fir Shipping v Kawasaki Kisen Kaisha 1962. This is
where the Kawasaki Kisen Kaisha charted a shipping for two years from Hong Kong Fir shipping.
, Anaya Thapar Unit 6 assignment 2
One of the terms stated that the shipping was 'in every way fitted for cargo service'. Within the first
year, about 20 weeks of the charter was lost due to problems from the ship. However, they could
only end the charter if the term was a condition, not a warranty. The court stated that the effect of
the breach would determine it was a breach of condition or warranty. It was decided there was a
insufficient breach of the the term as being treated as a condition. The legal principle is that some
terms in contracts are innominate. As in this case the effects of the breach will determine if it is a
breach of a condition or warranty.
What is an exemption clause?
An exemption clause is an agreement in a contract where a party is limited or is excluded from a
liability. It can be unfairly used which can come as a disadvantage to a party. There are two
different types of exemption clause which are limitation clause and exclusion clause. The court
will decide if an exemption clause is enforceable. They also look at this clause with a disfavour
and often narrowly to see if it is in the right circumstances. Exemption clauses excludes liability
and doesn't give a freedom of contract. Along with it only protecting the defendant.
In the case of Olley v Marlborough Court 1949. Where the claimant had booked into a hotel,
where the contract that was made with the reception desk where the exclusion clause was not
stated. The hotel room at the back door was a notice with an a excluded liability of the hotel
proprietors of anything that caused damages. This legal principle was the notice was ineffective
where the contract had already been made when the claimant seen the notice.
What is an exclusion clause?
This is sometime called an exemption clause. The purpose of these terms in a contract is that it can
protect a person selling the goods or providing a service by avoiding a liability when and if an
event of a breach of contract. The effectiveness of the exclusion clause has different situations. The
law has struggled with this clause as they are always in a contract by a party with a strong position
of bargaining. As presented in the famous case of L'Estrange v Graucob 1934. Where the
company's order form contained a clause providing with a complete exemption for liability. The
vending machine full of cigarettes that Mrs L'Estrange brought from never worked. However, this
clause meant that she cannot claim the suppliers of the machine. The legal principle is that the
exclusion clause is part of a contract that is then it will be effective if there is no protection given
the party suffering from the term.
The exclusion clause imposes on the consumers and some businesses may have no effect that is
legal so businesses imposing on the exclusion clause is still liable for a breach of contract. On the
other hand when an exclusion clause is not part of the contract. It can be found not to be effective
but if it can be shown that it is not incorporated in the contract. The idea of the offer and it being
accepted. Exclusion clauses must be part of an offer that is made and not introduced after a
contract is formed.
What is a limitation clause?
The limitation clause is a section of a contract agreement that is specific to damages that a party
will be obligated to provide under certain term. It has restrictions and limits the extent of a
contracts liability. Limitation clauses have to be reasonable and are drafted to make sure that
attention that is great when someone enters a contract. It is constructed more favourably. A
limitation clause can see the amount of damage of the potential damage where a company can be
exposed. This limit can apply to claims that arise during the contract or apply's to actions which
are caused by certain types. By the limits that this clause has can be from the fee's and
compensation which are paid during the contract, the amount of money which is negotiated and
agreed, the insurance or two combinations of what is paid.
Unit 5 Assignment 2
P3: Describe the different types of terms in a contract.
Contracts that are created have terms. Contract terms detail what parties have agreed within the
contract. These terms are those that have beed specifically agreed between both parties, which is
known as an express term. Express terms involve the law in the contract which is known as an
implied term. Implied terms can be implied by the courts or the Acts of Parliament.
Express terms that are in a contract are agreed during the process of negotiation which leads up to
an offer being accepted. It could be very straightforward, for example buying a coffee from a cafe.
There are different types of contracts with different expressed terms that are used. These types of
expressed terms are: conditions, warranties and innominate terms. These can apply to standard form
contract and implied terms
What is a condition?
Conditions are terms that in a contract are central. When someone makes a contract to rent a car it
is central to the contract that the car accelerates and breaks reliably. If there is a condition that is
broken the person that is affected can end the contract when they want as they are entitled to.
There are circumstances affecting the way that people live and work which regards their well
being. In a contract there is an expressed condition which is stated clearly in a definite term
contract, lease or deed. A implied condition is presumed by the law upon the nature of a
transaction and what would be reasonable to do if a event occurs.
In the case of Poussard V Spiers and Pond 1876 where a condition can be seen. It states that a
lead star agreed to preform in a production for a season of performances and rehearsals. After she
had failed to attend the first performances, the role was given to the understudy and she was not
allowed to preform again. She sued for breach of contract, however the court stated that she had
broken the contract by not attending the opening night. In the case it states that the legal principle
is where a breach of a condition allows the entitled the affected party to be repudiate the contract.
What is a warranty?
A warranty is a minor term of the contract that is made that allows a claim to be made by the
affected party to the contract. Though the damages can be payable. For example if the radio in a
rental car works intermittent;y, this would be classified as a warranty. It is also known as a written
guarantee which is issued by the manufacturer, which promises the repair or replacement if it is
necessary within a period of time which is specific. It is a minor term where a breach does not end
a contract but allow a damage to be claimed.
In the case Bettini v Gye 1876. Where a Singer was to be preforming in a season of concerts and
six rehearsals. However, failed to appear to the first three days of rehearsal. He was replaced along
with being sued by the concert organisers. The court decided that the rehearsals were not central to
the contract so the concert organisers couldn't terminate his contract. The absence could have
caused extra expense, however the rehearsals could have been arranged in a different way. The
legal principle is a breach of a contracts warranty only allows claims for damages. The contract
will continue and will not end with this breach.
What is a innominate term?
It is where the court decides on a category of a term which is based on all the evidence,
particularly on any description of the term in a contract. In some circumstance a term can not fall
into a classification of either a condition or a warranty. The courts will call any term that is not
defined as a warranty or condition is a innominate term. The effects of this term may be a
condition or a warranty. It is unclear whether a term is a condition or a warranty until the breach of
the term and the consequences that have been investigated by the courts.
As presented in the case of Hong Kong Fir Shipping v Kawasaki Kisen Kaisha 1962. This is
where the Kawasaki Kisen Kaisha charted a shipping for two years from Hong Kong Fir shipping.
, Anaya Thapar Unit 6 assignment 2
One of the terms stated that the shipping was 'in every way fitted for cargo service'. Within the first
year, about 20 weeks of the charter was lost due to problems from the ship. However, they could
only end the charter if the term was a condition, not a warranty. The court stated that the effect of
the breach would determine it was a breach of condition or warranty. It was decided there was a
insufficient breach of the the term as being treated as a condition. The legal principle is that some
terms in contracts are innominate. As in this case the effects of the breach will determine if it is a
breach of a condition or warranty.
What is an exemption clause?
An exemption clause is an agreement in a contract where a party is limited or is excluded from a
liability. It can be unfairly used which can come as a disadvantage to a party. There are two
different types of exemption clause which are limitation clause and exclusion clause. The court
will decide if an exemption clause is enforceable. They also look at this clause with a disfavour
and often narrowly to see if it is in the right circumstances. Exemption clauses excludes liability
and doesn't give a freedom of contract. Along with it only protecting the defendant.
In the case of Olley v Marlborough Court 1949. Where the claimant had booked into a hotel,
where the contract that was made with the reception desk where the exclusion clause was not
stated. The hotel room at the back door was a notice with an a excluded liability of the hotel
proprietors of anything that caused damages. This legal principle was the notice was ineffective
where the contract had already been made when the claimant seen the notice.
What is an exclusion clause?
This is sometime called an exemption clause. The purpose of these terms in a contract is that it can
protect a person selling the goods or providing a service by avoiding a liability when and if an
event of a breach of contract. The effectiveness of the exclusion clause has different situations. The
law has struggled with this clause as they are always in a contract by a party with a strong position
of bargaining. As presented in the famous case of L'Estrange v Graucob 1934. Where the
company's order form contained a clause providing with a complete exemption for liability. The
vending machine full of cigarettes that Mrs L'Estrange brought from never worked. However, this
clause meant that she cannot claim the suppliers of the machine. The legal principle is that the
exclusion clause is part of a contract that is then it will be effective if there is no protection given
the party suffering from the term.
The exclusion clause imposes on the consumers and some businesses may have no effect that is
legal so businesses imposing on the exclusion clause is still liable for a breach of contract. On the
other hand when an exclusion clause is not part of the contract. It can be found not to be effective
but if it can be shown that it is not incorporated in the contract. The idea of the offer and it being
accepted. Exclusion clauses must be part of an offer that is made and not introduced after a
contract is formed.
What is a limitation clause?
The limitation clause is a section of a contract agreement that is specific to damages that a party
will be obligated to provide under certain term. It has restrictions and limits the extent of a
contracts liability. Limitation clauses have to be reasonable and are drafted to make sure that
attention that is great when someone enters a contract. It is constructed more favourably. A
limitation clause can see the amount of damage of the potential damage where a company can be
exposed. This limit can apply to claims that arise during the contract or apply's to actions which
are caused by certain types. By the limits that this clause has can be from the fee's and
compensation which are paid during the contract, the amount of money which is negotiated and
agreed, the insurance or two combinations of what is paid.
