Lecture Notes on Contract Terms

Introduction

• The lecture was conducted via Zoom due to the absence of students in the classroom.
• The session is recorded and will be available for those who could not attend.
• The focus is on terms of contracts, which refer to the duties and content within a contract.
• Importance of understanding express terms, both written and oral.

Categorization of Contract Terms

Importance of Contract Terms

• Terms can vary in importance; some are more crucial than others.
• Breach of important terms can lead to different consequences and remedies.

Types of Contract Terms

1. Conditions

   • Major importance; go to the root of the contract.
   • Breach allows the innocent party to repudiate the contract.
   • Entitles the innocent party to claim damages.
   • Example: Case of Poussard v. Spiers and Pond (1876).
     • Actress unable to perform due to illness; management justified in terminating the contract.

2. Warranties

   • Relatively lesser importance; subsidiary statements of fact.
   • Breach does not allow repudiation of the contract but allows for recovery of damages.
   • Example: Case of Bettini v. Gye.
     • Singer arrived late for rehearsals, seen as a warranty, not a condition.

3. Innominate or Intermediate Terms

   • Neither conditions nor warranties; requires assessment post-breach.
   • Introduced by the Hong Kong Fir Shipping Co. Ltd v. Kawasaki Kisen Kaisha Ltd (1962).
   • Requires a "wait and see" approach to determine the seriousness of a breach.
   • Example: Case of Hong Kong Fir.
     • Ship's crew incompetence and antiquated parts did not justify termination as a condition.

Determining the Status of Terms

• Intention of the Parties:
  • The intention is gathered from the contract.
  • If parties mislabel a term, the true intention will prevail as determined by the court.
  • Example: Schuler AG v. Wickman Machine Tool Sales Ltd.

Legal Interpretations

• Case Law Examples:
  • S.S.B. Ltd. v. Seabam Services.
  • Bunge Corporation v. Tradax Export SA.
• Courts assess intention and classification on a case-by-case basis.

Conclusion

• The lecture highlighted the need to understand different classifications of contract terms.
• Emphasized practical examples and how courts interpret these terms.
• Encouraged further reading and understanding of case law to grasp the complexities involved.

Further Reading

• Refer to Mrs. Duna Harmon's book on contract terms, specifically Chapter 14.
• Review case law to better understand the application of these principles in real-world scenarios.