Banking and finance dispute resolution
For the latest news and comment on banking and finance disputes.
For the latest news and comment on banking and finance disputes.
For all the latest news and comment in clinical negligence healthcare law
This collection looks at the latest news and comment on commercial contracting healthcare law. With the health and social care sector under…
For all the latest news and comment in employment and pensions healthcare law
For all the latest legal and regulatory news and comment in health technology
This collection contains DAC B eachcroft's latest report, The Route to Integrated Healthcare , which provides the first practical examples of how…
This collection looks at the latest strategic, commercial, regulatory and negligence legal and advisory news and comment in health and social care. …
For all the latest news and comment on employment and pensions law.
DAC Beachcroft Dublin specialises in insurance, professional indemnity, defendant personal injury, health, commercial litigation and employment work.…
For all the latest new and comment in tax law.
The GC Collective collection offers insight and comment for General Counsels (GCs) and in-house legal teams.
For the latest news and comment on Corporate, M&A and Equity Capital Markets.
Analysis, commentary and checklists on the legal and governance implications of Brexit on businesses operating in, and trading with, the UK
The Accountant's Liability Collection brings you topical news and insight of interest to accountants, actuaries, trustees and other financial…
Events and online training for the health and social care sector.
DAC Beachcroft's LatAm Quarterly Newsletter discusses topical news and issues in Latin America
In response to client suggestions and requests, DAC Beachcroft's insurance sector flagship publication.
For all the latest legal and regulatory news and comment in health and social care integration
For all the latest news and comment in corporate regulatory healthcare law
Find advice, commentary and thought leadership on all aspects of Director's & Officer's Insurance; from contract formation through to complex…
This collection looks at the latest news, comment and development on the law affecting mental health services. The law affecting mental health…
Our market-leading Information Law team regularly publish articles and updates addressing the ever-evolving Information Law landscape.
This collection looks at our Safety, Health and Environment Team and the products and services they can provide. In the climate of increased…
The Insurance Act 2015 comes into force in August 2016 and will represent a significant change to insurance contract law in this country. This…
Legislative changes are bringing major changes to the Insurance landscape. This collection houses DAC Beachcroft's alerts on the pertinent issues.
For all the latest news and comment in clinical regulatory healthcare law
Organisations face ever-increasing expectations from Government, regulators, customers or service users, and other stakeholders, so scrutiny and…
For all the latest legal and regulatory news and comment in healthcare estates and facilities management
This collection addresses the full spectrum of cyber security and data risk management – the zeitgeist of our age.
We have acted for clients in the majority of significant product liability cases that have been decided in the UK over the last 35 years. Our product…
Considering the future landscapes of our cities
The European General Data Protection Regulation (GDPR) came into force on 25 May 2016. A rewrite of European data protection law, the GDPR imposes…
Considering the future of housing
For the latest news and comment on public procurement law.
Welcome to the Construction Risks collection. This space is used to report upon issues of interest to those who seek to allocate, manage and reduce…
Technology, brands and intellectual capital are key assets for any successful business. Our intellectual property (IP) team are experts at helping…
Considering the future of retail
The Insurance Market Conditions and Trends report is DAC Beachcroft's insurance sector flagship publication. Now in its tenth year, the report…
The Solicitors' Risk Collection addresses issues and developments affecting legal practitioners, and the professional indemnity insurers of legal…
Published On: 20 August 2015
Welcome to the fourth in our series of simple briefings aiming to highlight some of the more common issues relating to contracting. In this briefing we are looking at the difference between "conditions" and "warranties" and why that matters when assessing the consequences of a breach of contract.
Contractual terms are classified as conditions, warranties or intermediate (or innominate) terms. Ideally, parties will identify how each contract term will be classified at the outset of the contract. This is so that if there is a breach of contract, the parties can quickly determine the available remedies.
A condition is a term of a contract that goes to the root of the contract. In a sale of goods contract this might include a clause that states that time is of the essence i.e. it is a condition of the contract that the goods must be delivered by a specific time.
If a condition is breached, the aggrieved party has the right to treat the breach as "repudiatory" which means that the aggrieved party can either:
In either case the aggrieved party can claim damages.
It is important to note that a breach of a condition entitles the aggrieved party to terminate regardless of the nature or consequences of the breach, even if the aggrieved party has suffered little loss as a result of the breach.
A warranty is a term of the contract which is less significant than a condition and which is usually written as an assurance or a promise. For example, in a services contract there might be a requirement to have staff trained at a specific level.
If breached, it would not deprive the aggrieved party of the whole of the benefit of the contract. A term that is a warranty in one contract might be a condition in another depending on how important that term is to the parties.
Statements about factual matters are commonly expressed as "warranties" in a contract. For example, a party might warrant that it has obtained all required consents at the start of a contract. Such a statement is likely to be accepted as a warranty (subject to the below).
An intermediate term is neither a condition nor a warranty and the parties need to consider the significance of the breach to determine the right remedy. The remedy available to the aggrieved party will depend on the nature and effect of the breach at the time it occurs.
The general test is whether:
If the breach deprives the aggrieved party of the whole of the benefit of the contract then this will be a condition and will allow the aggrieved party to terminate. If not, then the term will be a warranty and the aggrieved party may be entitled to claim damages.
This approach is usually criticised for lack of certainty. An aggrieved party should act cautiously as it could be liable for wrongful termination if it is found that the breach did not actually deprive it of substantially the whole benefit of the contract.
Many terms implied by statute are classified as conditions or warranties by the relevant statute. For example:
If the contract is silent and does not stipulate if a term is condition or a warranty:
If the contract states that a term is a condition or warranty, the courts will generally follow this classification unless:
If you need any help in drafting contractual terms and conditions, please do not hesitate to get in touch.
Helen Simpson, Partner
T: +44(0)117 918 2338
Carole Poletti, Solicitor
T: +44(0)117 918 2324