Expressed Terms

Barry Problem

This problem is related to express terms. These are terms which the parties write down or agree to orally. The terms within a contract have been sub-divided into conditions which is a major term and warranties which are a minor term. Conditions are vital terms of the contract which, if broken, entitles the injured party to repudiate the contract. It was defined by Lord Justice Fletcher Moulton in Wallis v Pratt as ‘An obligation which goes directly to the substance of the contract that its non-performance may fairly be considered by the other party as a substantial failure to perform the contract at all’. Warranties are a subsidiary term of the contract and give rise to an action in damages only. It was defined in Wallis v Pratt as ‘An obligation which, though it must be performed, does not go to the root of the contract.’ Whether a term is a condition or a warranty is a question of the intention of the parties to be deduced from the circumstances of the cases. A clear example is given by Justice Blackburn who ruled on two similar cases within months of one another. In the case of Bettini v Gye, the warranty cannot be repudiated, but may claim damages, whereas with Poussard v Spiers the condition can both repudiate and claim damages.

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The term, ‘the machine is able to pick potatoes at the rate of 100 per minute’ is a condition which goes to the root of the contract. It is important to Barry that the machine picks potatoes faster than by hand, otherwise there would be no need for him to purchase the machine. This condition has been breached as the machine only picks 30 potatoes per minute but states in the contract that the machine picks at the rate of 100 per minute. Barry therefore has the right to repudiate the contract and sue for damages. This is shown in Poussard v Spiers where the plaintiff, a singer agreed with the defendant that she would play the leading role in an opera for a three month period. The plaintiff became seriously ill five days before the first performance and it was uncertain as to how long her illness would last. The defendant found a replacement and refused to take the plaintiff back when she was better after eleven days. It was held that the defendant was entitled to treat the contract as discharged by the plaintiff’s breach.

The term, ‘the machine only requires two star petrol to operate it’, is a warranty, as it does not go to the root of the problem, as it is not as important for the machine to use two star rather than four star and there is no need to end the contract. Under this breach Barry is entitled to sue for damages. In Bettini v Gye a singer missed three days of rehearsals due to being ill, the defendant terminated the contract. It was held that the plaintiff could still perform his contract and the defendant was not entitled to treat the contract as discharged by the plaintiff’s late arrival for rehearsals.

The term ‘it is a condition of the contract that delivery of the machine is to take place at 12.00 noon on July 1st’ may be seen as a condition but it may necessarily not be, as seen in Schuler v Wickman Machine Tool where the House of Lords held that it is possible that the distributor was unable for very good reason to go to one or all of the points during the week. Lord Reid said, ‘Condition does not have a rigid meaning so that the use of it is evidence of intention. The court must consider the whole contract, the more unreasonable result, the more unlikely it is that the parties intend to allow repudiation.’ Therefore this term is an innominate term, where the courts will wait and see the result of the breach before deciding if it is a condition or a warranty, which is shown in cases such as Hong Kong Fir Shipping Co. Ltd v Kawasaki Ltd, where it was held that the take of the court was not to evaluate the term as is stood in the contract, but to wait and see what happened as a result of the breach. Due to the late delivery of the machine, it does not necessarily inconvenience Barry and does not go to the root of the problem so it may just be a warranty. Similar cases to Barry’s is Mihalis Angelos and Bunge Corporation v Tradax Export S.A., in both of these cases, it involves the issue of time, in both it was decided that the innominate term can not be used when a time is stipulated in a contract, meaning that this term must be a condition which has been breached by the late delivery of the machine and Barry is therefore entitled to repudiate the contract and sue for damages.

Therefore overall, Barry is entitled to repudiate the contract and sue for damages due to Wobbly Ltd breaching two conditions and a warranty.