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- 10 Marks
Question
c)
i) Define a ‘condition’ as in the law of contract. (3 marks)
ii) Define ‘warranty’ as in the law of contract. (3 marks)
iii) Keita books for a hotel facility and pays in advance. The hotelier tells him nothing more than the issue of a receipt. Keita takes occupancy of the room only to read a list of DONTS posted at the back of the door of his room. The following day he returned from breakfast in the hotel to find that his wristwatch which he left on the table of the room was missing. He spoke to the receptionist at the reception desk on the loss but they referred him to an exclusion clause on the door. He seeks your advice. Advise Keita. (4 marks)
Answer
i) A condition creates the fundamental obligations of the contracting parties. Breach of a fundamental obligation, i.e., a condition, by one party entitles the other party to repudiate. Or a condition is a vital term of a contract, going to the root of the contract, a breach of which entitles the injured party either to treat the contract as repudiated and terminate performance of the contract and claim damages for the termination or to affirm the contract and claim damages.
(3 marks)
ii) A warranty is a minor term. A breach of warranty entitles the other party to damages only. A warranty is not a vital term in a contract, but one which is subsidiary, a breach of which gives no right to treat the contract as terminated but only an action for damages.
(3 marks)
iii) In order to be valid the exclusion clause must pass the following tests:
- It must be incorporated into the contract and not added after the contract is complete.
- The customer must have adequate knowledge of the clause.
- In the present scenario, the contract was concluded before the exclusion clause was brought to Keita’s notice.
(2 marks for any two points = 4 marks)
- Tags: Condition, Contract Law, Exclusion Clauses, Legal Advice, Warranty
- Level: Level 1
- Topic: Contract Law
- Series: MAY 2017
- Uploader: Dotse