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3 Law of contract (1 questions)
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A breach of a condition gives the innocent party the right to treat the contract as repudiated and to terminate, whereas a breach of a warranty only entitles the innocent party to claim damages and does not automatically confer a right to terminate.
- Condition breach: A condition is a fundamental term. Failure goes to the root of the contract. Example: Poussard v Spiers and Pond (1876) – the singer’s failure to appear for the opening night was a breach of condition, allowing the theatre to terminate.
- Warranty breach: A warranty is a subsidiary term. Breach does not affect the contract’s core; the innocent party may claim damages but must continue performance. Example: Bunge v Nissen (1995) – a breach of a warranty concerning the quality of goods did not permit termination.
- Intermediate term (innominate term): The right to terminate depends on the seriousness of the breach (see Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962)).