Chapter 9The terms of business contractsThe division of terms into conditions and warranties
was included in the original Sale of Goods Act 1893
(now the Sale of Goods Act 1979, as amended). In
s 11(3) a condition is described as a stipulation ‘the
breach of which may give rise to a right to treat the con-
tract as repudiated’, while a warranty is a stipulation ‘the
breach of which may give rise to a claim for damages
but not a right to reject the goods and treat the contract
as repudiated’. In recent years, the courts have recog-
nised that it may be impossible to classify a term neatly
in advance as either a condition or a warranty. Some
undertakings may occupy an intermediate position, in
that the term can be assessed only in the light of the con-
sequences of a breach. If a breach of the term results in
severe loss and damage, the injured party will be entitled
to repudiate the contract; where the breach involves only
Express and implied terms
Another way in which the contents of a contract can be
classified is according to whether the terms are express
or implied.Express terms
Express terms are the details of a contract which have
been specifically agreed between the parties. They may
be contained wholly in a written document or ascer-
tained entirely from what the parties said to each other.
In some cases, the terms may be partly written and
partly verbal.283
Poussardv Spiers(1876)Madame Poussard was engaged to appear in an oper-
etta from the start of its London run. Owing to illness,
she was not available until a week after the show had
opened and the producers were forced to engage a sub-
stitute. They now refused Madame Poussard’s offer to
take up her part. It was held that the obligation to per-
form from the first night was a condition of the contract.
Failure to carry out this term entitled the producers to
repudiate Madame Poussard’s contract.Bettiniv Gye(1876)Bettini, an opera singer, was engaged by Gye to appear
in a season of concerts. He undertook to be in London
at least six days before the first concert for the purpose
of rehearsals. He arrived three days late and Gye refused
to accept his services. It was held that the promise to
appear for rehearsals was a less important term of the
contract. Gye could claim compensation for a breach of
warranty but he could not repudiate Bettini’s contract.2 Warranties.A warranty is a less important term: it
does not go to the root of the contract. A breach of
warranty will only give the injured party the right to
claim damages; he cannot repudiate the contract.
The difference between a condition and a warranty is
illustrated by the following cases.
Cehave NVv Bremer Handelsgesellschaft
mbH (The Hansa Nord)(1975)
A clause in a contract for the sale of citrus pulp pellets
stipulated that shipment was ‘to be made in good con-
dition’. Part of one consignment arrived in Rotterdam in
a damaged condition and the buyers rejected the whole
cargo. The defects were not particularly serious because
some time later the buyers bought the very same cargo
at a considerably reduced price, which they then pro-
ceeded to use for their original purpose. The Court of
Appeal held that the clause in question was an interme-
diate term. The breach was not so serious that it entitled
the buyers to reject the whole cargo. It could be dealt
with by an award of damages.Harlingv Eddy(1951)A heifer was put up for sale by auction at Ashford Cattle
Market. The sale was subject to the auctioneer’s printed
conditions of sale which stated that the auctioneer did
not guarantee the condition of the animals sold. The
appearance of this particular heifer was so poor when
she entered the auction ring that no one was prepared to
make a bid for her. The auctioneer then stated that there
was nothing wrong with her and he would guarantee her
in every respect. The heifer was sold to the claimant but
was dead from tuberculosis within three months. Theminor loss, the injured party’s remedies will be restricted
to damages. These intermediate terms have become
known as innominate terms.