Intermediate (or innominate) termsSome terms are not readily classifiable as either conditions or warranties because they canbe breached in both major and minor ways. Such terms are called intermediate (orinnominate) terms. The rights which accrue to the innocent party if an intermediate term isbreached do not depend on the classification of the term but upon the seriousness of thebreach. If the breach is serious (such that the injured party no longer gets essentially whathe or she contracted for), it is treated in the same way as a breach of condition. If thebreach is minor (such that the injured party still gets substantially, though not exactly, whathe or she contracted for), it is treated as if it were a breach of warranty.So, for example, if I were to contract with you to act as my selling agent and we were toagree that you would visit each of my customers at least once each calendar month, themonthly visit stipulation would probably be an intermediate term. This is because it iscapable of both serious and minor breach. For instance, if you failed to visit any of mycustomers at all in a particular month that would have very serious consequences for meand I would be justified in terminating your agency. On the other hand, if you missed onecustomer in one month — perhaps for very good reason — but ensured that you visited himor her early the next month you would still be in breach. However, because theconsequences for me are unlikely to have been serious — especially given our contracttaken as a whole — termination would not be justified and, therefore, I would not be entitledto terminate the contract. In fact, if I did I would probably be in breach and you would beentitled to, at least, damages.4.1.4 Exemption ClausesDefinitionAn exemption clause is a term of a contract that protects the party who inserting it byexcluding or limiting his or her liabilityif he or she breaches the contract. When they areeffective, exemption clauses can protect a party against liability for both breach of contractand tortious behaviour (such as negligence) in his or her performance of the contract.Consequently, one or more exemption clauses are now normally included — especially inall standard form contracts where one party can adopt a ‘take it or leave it’ attitude becauseof his or her superior bargaining position.Requirements for validityBecause exemption clauses are usually imposed, rather that freely agreed to, the courtsdemand clear proof of three things before they will enforce them:that the proferens(the party inserting the clause for his or her own protection) gave theother party adequate notice of the existence and contents of the clause;that the clause is clear and unambiguous; andthat the clause is wide enough to cover the actual breach subsequently complained of.
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