Implied and Express terms (contract) - Essay Example

In such situations the concept of what are implied terms comes into the picture. Implied terms could be a condition, a warranty or an innominate term and it’s on only by knowing the effect of each, that we could determine the distinction of one from the other. The court, in the case of Hong Kong Fir v Kawasaki Kisen Kaisha [1962] 2 QB 26, had the chance to make a distinction among a condition, warranty and an innominate term. In said case, the following definitions were settled: When a condition is breached the injured party has the right to sue for damages and also to terminate the contract.

A breach of warranty only gives rise to the right to sue for damages. When an innominate term is breached the legal consequences of the breach depend upon its factual consequences i.e. there is a right to terminate the contract, in addition to suing for damages, only if the breach of an innominate term is such as to deprive the injured party of substantially all the benefit which he was intended to derive from the contract. If a term is subject to different interpretation then there is flexibility otherwise there is certainty.

As to how it creates a tension is on the consequence of different interpretations. A party to a contract, for example, believes a term to be condition but when the court will interpret otherwise, it will really create a tension as to him because that would be depriving him the right to terminate the contract. a or exanmplke iif one entitles meFF Since in innominate terms there could be either the right to sue for damages or both the said right and right to terminate the contract, then a tension could also be created by the uncertainty of flexibility of the decision depending on how the courts appreciates the facts of the cases and surrounding circumstances and how it will apply the rule on implied terms.

As to why, the court said: ‘Terms implied in fact are