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Innominate terms

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Introduction

INNOMINATE TERMS Sometimes it is hard to determine the status of terms, thus an intermediate category for such terms is developed- innominate terms. Whether termination is available depends on the ?waiting and seeing? at time of the breach and whether it is so fundamental to strike the fundamental purpose of the contract. If the breach is serious, it will be classified as a condition and able to be rescinded. and if it is not, it will be classified as a warranty- where rescission is not available. The parties may describe the terms as condition themselves. An examination of innominate terms, the courts will not take this as decisive but judge on the facts of the case. ...read more.

Middle

The ship was contracted to be ?in every way fitted for ordinary cargo service? Hence the defendants have obviously able to claim damages but instead they chose to rescind the contract. The claimants sued for wrongful repudiation- claiming that their breach did not entitle them to sue for damages, Conventionally, the courts will determine the status of terms at the time of the contract. The importance of the term then dictated the consequences of the breach. However, in HK Fir, the courts find themselves ready to find a term innominate, even if parties described it as conditions. This is confirmed In the case of Schuler v Wickman, where there was a clause stating as conditions for there to be a weekly visit to certain manufacturers. ...read more.

Conclusion

However, it would create much uncertainty- especially in commercial contracts where parties would want to know the status of terms before proceeding.(Reardon Smith v Hansen Tangen) Innominate terms are very important when the status of terms cannot only be based on just facts.The courts would look at the result of the breach. Even with many benefits, innominate terms create uncertainty and thus may cause inconvenience in business where parties often need to know what obligations they are assuming in order to plan their affairs. Consequently, the courts have decided not to give the doctrine too broad a scope as in to Mihalis Angelos case. T is a necessary evil that do more good than harm, producing fairer outcomes. ...read more.

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