Contract Law: Conditions and Warranties

A condition is a term that is essential to the main purpose of the contract.
It is a fundamental promise that must be fulfilled for the contract to be valid.
If a condition is breached, the innocent party has the right to treat the contract as repudiated and claim damages for breach of contract.
The innocent party can also choose to affirm the contract and claim damages for breach of contract.
The main contract can be fulfilled if the condition is breached, as long as the breach is not material.
Example: In a contract for the sale of goods, a condition might be that the goods are of a certain quality or description. Example: A buyer agrees to buy a used car from a seller. The contract states that the car must have less than 50,000 miles on it. This is a condition because it is an essential term in the agreement. The buyer will only buy the car if it meets this condition.

A warranty is a term that is less important than a condition.
It is a promise that is not essential to the main purpose of the contract.
If a warranty is breached, the innocent party can only claim damages for breach of contract, not terminate the whole contract.
The main contract can be fulfilled if the warranty is breached.
Example: In a contract for the sale of goods, a warranty might be that the goods will be delivered on a certain date or that the seller will provide a warranty for the goods. Example: A buyer agrees to buy a new phone from a seller. The contract states that the phone will come with a 1-year warranty. This is a warranty because it is not essential to the main purpose of the agreement. The buyer will still buy the phone even if the warranty is not provided.

An intermediate or innominate term is a term that is neither a condition nor a warranty.
It is a term that is important, but not essential, to the main purpose of the contract.
Its consequences depend on the seriousness of the breach.
If the breach is serious, the innocent party can treat the contract as repudiated and claim damages.
If the breach is less serious, the innocent party can only claim damages.
Example: In a contract for the sale of goods, an intermediate term might be that the goods will be delivered on a certain date.
Example: A buyer agrees to buy a laptop from a seller. The contract states that the laptop will have a specific screen size. This is an intermediate term because it's important but not essential to the agreement. If the laptop has a slightly different screen size, the buyer might only be able to claim damages. But if the screen size is dramatically different, the buyer might be able to terminate the contract.

The case of Poussard v Spiers and Pond (1876) established that a condition is essential to the contract and the innocent party is entitled to terminate the contract if it is breached.
In this case, an actress was contracted to perform in a play. She was unable to perform for the first few days of the play because she was ill. The producers were entitled to terminate the contract because her performance was essential to their production of the play and her absence amounted to a breach of condition.
The case of Bettini v Gye (1876) established that a breach of warranty does not entitle the innocent party to terminate the contract.
In this case, an opera singer was contracted to perform for three months. He was sick for a week leading up to the start of the contract and missed two days of rehearsals. The Court held that this was a breach of warranty because the rehearsals were not essential to the singer's ability to perform. The producers were only entitled to claim damages, and could not terminate the contract.

Condition: Yes, unless the breach is deemed material.
Warranty: Yes.
Intermediate/Innominate: Depends on the seriousness of the breach. If the breach is serious, the contract may be treated as repudiated.

Condition: The innocent party is entitled to terminate the contract and/or claim damages.
Warranty: The innocent party is only entitled to claim damages.
Intermediate/Innominate: The innocent party can either terminate the contract (if the breach is serious) or claim damages (if the breach is less serious).

The damages awarded in a breach of contract case will be determined by the court based on the type of breach and the loss suffered by the innocent party.
The innocent party is entitled to be compensated for the losses they have incurred as a result of the breach, including lost profits, wasted expenses, and any other foreseeable losses.
Example: If a buyer agrees to buy a car from a seller, but the seller breaches the contract by not delivering the car on time, the buyer may be entitled to receive damages for lost profits (e.g., a business missed due to not having the car on time) or wasted expenses (e.g., gas used searching for new cars).