Answer Guide Q3 p210 CACL

Answer Guide Q3 p210 CACL - Question 3 CACL p210 Here is...

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Question 3 CACL p210 Here is another example of how an answer to a hypothetical legal problem should be structured. It will provide some guidance for both the test in week 8 and the final exam. The issues to be discussed in this answer are (a) whether Clause 1 is a condition or a warranty (b) the remedies that may be available for the breach and (c) whether the outbreak of the virus is a frustrating event that excuses the breach. 1. Is Clause 1 a condition or warranty? A condition is a term that is ‘essential’ or goes ‘to the heart’ of the contract: Tramways Advertising and Associated Newspapers. If a condition is breached in any way, however small, the innocent party has an option: terminate the contract and/or sue for damages. On the other hand, a warranty is a term of lesser importance, the breach of which does not permit termination but allows the innocent party to sue for damages. Courts must ultimately decide what a reasonable person would make of the clause in question and, in doing so, will look at the words used by the parties, the likely consequences of a breach, the overall importance of the term and whether damages are adequate as compensation. So, in order to decide what remedies if any are available, we must determine if clause 1 is a condition or a warranty. The parties have stated that clause 1 is a ‘condition of the contract’ and this is certainly indicative of their intention. However the words used by the parties are not necessarily binding on the courts. For example, in L Schuler v Wickman, the court said
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