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Condition

A condition is a term (oral or written) which goes directly 'to the root of the contract', or is so essential to its very nature that if it is broken the innocent party can treat the contract as discharged. That party will not therefore be bound to do anything further under that contract.

Warranty

A warranty is e term of the contract which is collateral or subsidiary to the main purpose of the contract. It is therefore not so vital as to affect a discharge of the contract. A breach of warranty only entitles the innocent party to an action for damages; he cannot treat the contract as discharged.

Both conditions and warranties are terms in a contract and it is for the court to decide in each contract whether, having regard to the intentions of the parties, a term is a condition or a warranty. The importance lies in the remedy in the event of breach.

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14y ago
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15y ago

In a contract for the sale of goods, a warranty, once breached, gives rise to a claim for damages, but not a right to reject the goods sold and treat the contract as repudiated. A condition, however, is part of the root of the contract and allows the injured party to rescind and/or seek damages.

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9y ago

Classification of terms in insurance contracts

You will recall that in the general law of contract terms are often classified into condition and warranties , in the general law of contract a warranty is a term concerning a minor part of the agreement only , If it is broken , the injured party has a right to claim damages but not , In general , to treat the contract as repudiated.

A condition , on the other hand is a term that relates to an important aspect of the agreement : it ' goes to the root ' . if such a term is broken the victim has a right , not only to claim damages , but also to avoid the contract.

You also recall that the words ' condition ' and ' warranty ' , though they used in insurance , do not have the same meaning as in the general law of contract. In particular , a warranty in insurance is not a minor term of the contract , but one of the greatest importance.

Of course , the term of an insurance contract cover all sorts of things including , for example : payment of the premium , rights of cancellation and application of arbitration in the event of a dispute . these provisions may be described as ' condition ' or even ' warranties ' in the contract . however we are concerned mainly with terms that impose obligation on the insured i.e. those that require the insured to do something ( or not do something ) as their part of the bargain.

Warranties:

We begin by looking at terms that are described as warranties , these are the most important terms in an insurance contract and bring about the most drastic effects if they are broken.

Nature of warranties:

Until fairly recently , a warranty in an insurance contract was commonly described as a term which , if broken , allowed the insurers to repudiate the contract as a whole , in this respect it was regarded as being similar in effect to what is described as a condition in the general law of contract .

The house of lords held that a breach of warranty terminated cover automatically from the date of the breach and , to all intents and purposes , terminated the insurance policy , although the house of lords did not state that this rule applies to non-marine insurance , it has been assumed that it does in subsequent cases.

a warranty is essentially a promise made by the insured relating to the facts or to something which they agree to do . a warranty may relate to past or present facts ( i.e. be a promise that something was so or is so ) , or it may be a continuing warranty , in which the insured promises that a state of affairs will continue to exit or that they will continue to do something . for example a warranty may require that no work be carried out at a greater height than twelve meters , or that an intruder alarm is to be kept in good working order and regularly tested.

Exact compliance:

A warranty must be exactly complied with , if its broken , cover terminate , even if the breach did not cause or have any connection with a loss , and even if the breach has been remedied by the time a loss occurs , As stated above , termination arises from the date of the breach . If warranty has regard to past or present facts , cover ( and effectively the contract ) will terminate ab initio ( from the beginning ) , since by definition the breach will exist from the start of the contract.

Condition:

Rather confusingly , warranties themselves have sometimes been described as types of conditions , however , here we mainly use the word to describe terms , other than warranties , that impose an obligation on the insured , condition can also classified in various ways.

Condition precedent to the contract:

You should note that a condition precedent to the contract is not , as is sometimes suggested , a condition that must be met before the contract ( as apposed to the cover ) can come into effect - by definition , a non-existent contract cannot have any terms or condition . in this sense , all terms and conditions are ' subsequent ' to a contract.

A condition precedent to the contract is one which states , in one form of words or another , that the policy as a whole will become void , or cover will not attach. If the insured fails to comply with the term in question. For example , a life insurance policy may contain a condition that cover will not come into effect until the premium is paid . If such a term is not complied with the insurance contract will become void ab initio , that is , the contract will be cancelled retrospectively and the insurer will be deemed never to have been no risk.

A condition precedent may also impose a continuing obligation on the insured . for example motor policies usually contain a clause that requires the insured to maintain the vehicle in a roadworthy condition at all times . Conditions of this sort have much the same effect as continuing warranties , and some writers have suggested that there is no difference and the two terms refer to exactly the same thing.

Condition precedent to liability: The expression condition precedent to liability ( or recovery ) is used to describe a term that allows the insurers to avoid liability for a particular loss if the term is broken , but not avoid the contract as a whole. If a further loss occurs the insurer must pay , provided the insured in this case complies with the condition, claims conditions , such these requiring the insured to give prompt notice of a loss , or not admit liability , provide examples of this category of condition.

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15y ago

A contract is between 2 people or companies that agree to do something while a warranty covers an object (Like a clock or radio) for a length of time guaranteeing that the object will work properly in that length of time or be replaced free of charge.

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12y ago

the condition is a condition

and the warranty is a warranty

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Q: Difference between condition a warranty
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