‘Course of dealing’
Sometimes the courts will find that the parties not only meet on equal
terms, but that they have traded with each other before, or within the same
trade or professional sphere. In this situation it is likely that the parties
themselves know which terms are the more important ones from the outset.
This was the finding in the following case.
Innominate terms – the Hong Kong Firapproach
Generally, more important terms are conditions and less important ones are
warranties. Occasions may arise, however, where the importance of a term
is not apparent until it is breached. This often applies to a term which is
wide in meaning, such as a claim that something is ‘in good condition’.
This could be breached in a minor way or a very serious way. Where the
status of a term is unknown because of its nature, it is usually regarded now
as an innominate term.
However, this area of law is still in development, and case law will
clarify exactly how the approach is to work in practice. The issue arose in
the following leading case.
Types of terms within a contract 113British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd(1975)
The normal trade practice for a hirer of this type of equipment was to
be responsible for returning it to the place of hire. When a crane was
stuck in some marshy ground, the terms involving the return of the
equipment were disputed, and it was held that on this occasion the
courts could refer to normal trade practice which the parties must have
encountered in their previous work.Can you think of any other trading situations where usual practice
may indicate a type of term?Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962)
The plaintiff owned a ship which he chartered to the defendant, stating
in the agreement that it was ‘in every way fitted for ordinary cargo
service’. In fact the engines were old and developed trouble, and the
staff were incompetent. This resulted in a delay of five weeks on a
voyage to Osaka and a further fifteen weeks at Osaka being repaired.
The defendant terminated the charterparty and the plaintiff sued for