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Status of Terms in Warranties and Contracts

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´╗┐STATUS OF TERMS There are many different status of terms: warranties conditions and innominate term. The law seeks to classify legal terms according to their importance, with implication that a breah for the innocent party varying according to the type of term breached for these purposes. A condition is an essential term. It goes to the root of the contract, and is fundamental. A breach such term entitles the innocent party to repudiate the contract, so need not render any further performance, as well as claim for damages. In the case of Bunge Corp v Tradax Export, the seller contracted to sell to ship 5000 soya bean meal to the buyers. ...read more.


For example, goods must always match the description, always be of staidfactory quality, good bought in bulk must fit the sample. It should follow that in the event of a breach, a buyer should be able to rescind the contract. This protects the buyers from malicious sellers that have an unfair bargaining position over them In the case of Mihalis Angelos, the owner of a ship hired it out to a charterparty. The document contained the clause expected ready to load under this charter on 1 July, in fact it was not ready untoml 23 July. The clause ?expected readiness? was a condition and breach of the clause entitled the parties to rescind the contract irrespective of the consequences of the breach. ...read more.


The Sale of Goods Act regards it as ?collateral to the main purpose(of contract of sale). The breach of this only bring about light consequences and the innocent party can sue for damages and not rescind the contract. In Bettini v Gye, the plaintiff was an opera singer who was sacked because he missed 6 days of reheasals. This is held to be a mere warranty, hence the employer had no right to sack him, but only to claim damages. When there is a need for courts to determine the status of terms, the Sale of Goods Act 1979 will act as a guideline by labeling terms as either conditions or warranties. When a term is not labeled, the court would determine whetehr it amounts to a condition or warranty based on the importance of the terms. ...read more.

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