Intermediate or innominate terms Some terms are not readily classifiable as

Intermediate or innominate terms some terms are not

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Intermediate (or innominate) terms Some terms are not readily classifiable as either conditions or warranties because they can be breached in both major and minor ways. Such terms are called intermediate (or innominate) terms . The rights which accrue to the innocent party if an intermediate term is breached do not depend on the classification of the term but upon the seriousness of the breach. If the breach is serious (such that the injured party no longer gets essentially what he or she contracted for ), it is treated in the same way as a breach of condition. If the breach is minor (such that the injured party still gets substantially, though not exactly , what he 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 to agree that you would visit each of my customers at least once each calendar month, the monthly visit stipulation would probably be an intermediate term. This is because it is capable of both serious and minor breach. For instance, if you failed to visit any of my customers at all in a particular month that would have very serious consequences for me and I would be justified in terminating your agency. On the other hand, if you missed one customer in one month — perhaps for very good reason — but ensured that you visited him or her early the next month you would still be in breach. However, because the consequences for me are unlikely to have been serious — especially given our contract taken as a whole — termination would not be justified and, therefore, I would not be entitled to terminate the contract. In fact, if I did I would probably be in breach and you would be entitled to, at least, damages. 4.1.4 Exemption Clauses Definition An exemption clause is a term of a contract that protects the party who inserting it by excluding or limiting his or her liability if he or she breaches the contract. When they are effective, exemption clauses can protect a party against liability for both breach of contract and tortious behaviour (such as negligence) in his or her performance of the contract. Consequently, one or more exemption clauses are now normally included — especially in all standard form contracts where one party can adopt a ‘take it or leave it’ attitude because of his or her superior bargaining position. Requirements for validity Because exemption clauses are usually imposed, rather that freely agreed to, the courts demand 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 the other party adequate notice of the existence and contents of the clause; that the clause is clear and unambiguous; and that the clause is wide enough to cover the actual breach subsequently complained of.
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© Stephen Graw 2012 The notice requirement There are two categories of notice — actual notice and constructive notice. Actual notice occurs where the existence and contents of the clause have actually
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