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TERMS AND CONTENTS OF

CONTRACT

 A

contractual term is
any provision
forming part of a contract.
 Terms are therefore promises capable of
enforcement. When a party to a contract
makes a statement prior or at the time of
contracting with which he intended to be
bound, such a statement becomes a term
of the contract and is legally enforceable.
The determinant factor is the intention of
the parties at the time of making the
statement as viewed objectively.

natural or incidental. which are essential. Each term gives rise to a contractual obligation. . breach of which can give rise to litigation.  Not all terms are stated expressly and some terms carry less legal gravity as they are peripheral to the objectives of the contract.  Terms of contract can be divided into three categories.

such a term is important term.A termterm of the which if Essential andcontract. the Terms substantial performance of the contract is  not possible.  Important terms are also known as material term. essential term or vital term. by any of the party to it. .    The term(s) which form the very basis of the contract is an important term and rests other terms are general terms. General breached.

he will get the services performed by B.  For example.    .  Casual termsIn contract where the condition is of such nature where the future even is uncertain to happen because of chance or because of decision of any third party. On the other hand. if A will be successful in tender. such is a casual condition. substantial performance of the contract is possible. in case of breach of any condition the such a term is general term. which is to be decided by the city council (the third party).

such a condition is potestative condition. if the future event which is within the power of any of the party to the contract.Potestative and Mixed terms While.  .   Where the future event is a combination of both these two condition. in whose favour the obligation was formed. it is a mixed condition.

it is called condition.  In a contract there may be various terms or stipulation. . Such stipulations may be either conditions or warranties.   Conditions.Conditions or warranties.If stipulations forms the very basis of the contract and is essential to the main purpose of the contract.  The term condition is also defined as it is a qualification which renders the operation and consequences of the whole contract dependent upon an uncertain future event.

in other words.Warranty If the stipulation is not essential to the main purpose of the contract but is of only secondary importance. it is collateral to the main purpose of the contract. is called warranty. .

INTERMEDIATE TERMS 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 consequences of a breach.

The Mihalis Angelos [1971] 1 QB 164 The Hansa Nord [1976] QB 44 Reardon Smith Line v Hansen-Tangen [1976] 3 All ER . the injured party will be entitled to repudiate the contract. the injured party's remedies will be restricted to damages.If a breach of the term results in severe loss and damage. These intermediate terms have also become known as innominate terms. where the breach involves minor loss. See: Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha [1962] 1 All ER 474.

Loretto’s marriage is fixed on Sunday.find out……terms nature. packed in a carton box with a nice gift paper and ribbon. the gown supplier to supply of particular white gown with the terms that on the evening of Saturday the gown to be supplied.    . to be supplied at her home through hand delivery. the payment will be made through cash currency notes at the time of delivery. she enters into a contract with Daniel.????  For example.

In such a contract the particular gown and the time is the conditions as these terms are essential to the main purpose of the contract and the mode of payment. mode of delivery such terms are not so essential but have secondary importance and hence are warranties. packaging. .

.  It can be determined by the court.Please note…. on the basis of facts and circumstances of case. must be looked into. in case of dispute.  There is no hard and fast rule that which term is condition and which is warranty. the intention of the parties to a contract at the time of entering into it.  This also depends on the construction of the contract. At the time of determining that such a term is condition or a warranty.

its operation or consequence is suspended until uncertain event in future.Suspensive condition and Resolutive condition. such condition is a suspensive condition. Suspensive ConditionBy virtue of a stipulation or condition of a contract. payment monthly installments.  .e.  Condition can further be divided into two categories.  For example the agreement of hire purchase where change of ownership is suspended on the future events i.

such condition is resolusive condition. the contract will be terminated. parties to a contract of sale and purchase of land may agree that in case of higher offer by any third party.    .  For example.When in case of happening of uncertain Resolutive Condition future event the operation or consequences   of a contract are dissolved or the contract  may come to an end.

sue for specific performance of the contract and/or recovery of damages.Consequence of the breach of condition and warranty In case of the breach of a condition by one party. On the other hand in case of breach of warranty entails the injured party the right of recovery of damages only. entails the other (injured) party the right to repudiate/cancel the contract. .

  .  There are two types of exemption clauses:  Exemption Clauses embodied in a signed document.Exemption or the limitation clause  An exemption clause is a term in a contract which seeks to exempt from or limit the liability of one of the parties to the contract. and Exemption Clauses embodied in an unsigned document.

Exemption Clause in a Signed Document   The general rule is that a person who signs a document is deemed to have read it and understood it.Where offeree signs through misrepresentation  ii. he is bound: The maxim is caveat subscriptor.  Exceptions-i.   . Therefore if a person signs a document in which an exemption clause is embodied. 1. Where the signor signed the document under a fundamental mistake as to its nature as in Foster v Mackinnon 1869 the defendant was induced to sign a promissory note on assumption that it was a guarantee.

See: Chapelton v Barry Urban District Council [1940] 1 ALL ER 356 . receipts. Exemption Clauses in an Unsigned Document   These are usually in the form of notices. that it is not merely a receipt.  Here the offeree is bound if:  A reasonable man would assume the document to be contractual e. tickets.g. etc.2.

. went to a pile of deck chairs belonging to defendant council near to which was displayed a notice in the following terms 'Barry UDC Cold Knap. Hire of chairs 2d per session of 3 hours. The notice went on to state that the public were requested to obtain tickets for their chairs from the chair attendants and that those tickets should be retained for inspection.Plaintiff who wished to hire a deck chair on a beach. There was nothing on the notice relieving defendant council from liability for any accident or damage arising out of the hire of a chair. Plaintiff obtained two chairs from the attendant for which he paid 4d and received two tickets therefor.

On the other side of the tickets were the words 'Available for three hours. .' Plaintiff put the chairs up in the ordinary way on a flat part of the beach. and then sat down on a chair which gave way. with half hours printed on the side of the tickets.  The council will not be liable for any accident or damage arising from the hire of the chair. On one side of the tickets were the words 'Barry UDC Cold Knap. the canvas having come away from the top of the chair. Chair Ticket 2d not transferable'. Plaintiff glanced at the tickets and slipped them into his pocket and had no idea that they contained any conditions. Time expires where indicated by cut-off and should be retained and shown on request.

On appeal: Held the ticket was a mere voucher or receipt for the money paid for the hire of the chair. the local authority were liable to plaintiff.   .In an action against defendants the city court judge found that the accident was due to the negligence of defendants but that defendants were exempted from liability as plaintiff had sufficient notice of the special contract printed on the ticket. and as that notice contained no limitation of liability for any accident or damage arising from the hire of the chairs. and the conditions upon which the local authority offered to hire out the chairs were those contained in the notice put up near the pile of chairs.

 Contemporaneous notice. the other party is required to do the following things: Prior notice – the offeror must give offeree reasonable notice of the existence of the clause”.However. The offeror must draw the attention of the offeree to the existence of the clause contemporaneously to the making of the contract: See: Olley v Malborough Court Ltd [1949] I ALL 127   .

Morrison v Angelo Deep Gold Mines Ltd. There are certain exceptions to the rule however. may freely waive any of his rights. 1905 TS 775 p779 . For an exception on the basis of public policy to succeed it must be shown that the arrangement necessarily contravenes or tends to induce contravention of some fundamental principle of justice or of general statutory law. or that it is necessarily to the prejudice of the interests of the public.The general principle of law in regard to exemption clauses is that a party contracting without duress or fraud and understanding what he does. on consideration of public policy.

The court of appeal held that the term in question was not a warranty but a condition. . finding it unsuitable for touring purposes he complained. The seller relied on an exemption clause excluding all warranties. As a matter of public policy the courts as the public protector have set limits to the exemption clauses they will permit by interpreting clauses narrowly. and was therefore not excluded by the clause. and the seller recommended a Bugatti.   In Baldry v Marshall [1925] KB 260. Illustrations:  It is not every exemption clause that will absolve the defendant from his obligations under the contract. the buyer of a car stipulated that it should be suitable for touring purposes. which the buyer bought.

a garage keeper contracted to garage a car subject to the exemption clause “cars garaged at owner’s risk”. while the car was in the garage it was exposed to risks arising from the ordinary activities carried on in the garage. because the only risks which he undertook to bear were risks attendant on the garaging of the car in Scott’s garage. Watermeyer J A said at p188:  “In my opinion it means that the plaintiff took it upon himself certain risks of damage occurring while it was in the garage. He did not undertake to bear any additional risks to which the car might become exposed to. I do not propose. if in breach of the contract between the parties it was out of the garage into the public streets”. In Weinberg v Olivier 1943 AD 181. Clearly. . however. to attempt the task of defining accurately the type of risk which plaintiff took upon him. An employee of the garage keeper wrongfully drove the car to his own house and damaged it on the way back to the garage.  Referring to the exemption clause.