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Terms of Contract

Posted by snowie , Thursday, April 15, 2010 7:19 PM

Terms of contract can be in the form 'CONDITION' or 'WARRANTY' under section 12(1), Sale of Goods Act 1957. Terms of contract means the stipulation or things that between the two parties who involve in the contract.

CONDITION: is a stipulation which is essential to the main purpose of the contract, its breach leads to repudiation of contract. (Section 12(2), Sales of Goods Act 1957)

WARRANTY: is a stipulation which is collateral to the main purpose of the contract, its breach only leads to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. (Section 12(3), Sales of Goods Act 1957)

Whether a stipulation is a condition or warranty depends in each case on the construction of the contract. The stipulation may be a condition, though called a warranty in the contract. (Section 12(4), Sale of Goods Act 1957)

However, who have the right to determine the ‘term of contract’? The court only has the right to determine the term of contract whether it is condition or warranty.