Importance attached to the statement test indicates that the statement is a term. It is not merely that the statement is important to the recipient but that he makes this importance clear to the statement-maker ahead of any statement being made.

P wanted Ds, car dealers, to acquire a ‘well-vetted Bentley’. The dealers confirmed that the particular car had travelled only 20,000 miles since being fitted with a new engine and gearbox. In fact, the statement as to mileage was untrue. The statement as to mileage amounted to a warranty (term).

The statement as to mileage was made by a person professing to have specialist knowledge and therefore was a term or collateral warranty (promising that reasonable care and skill had been taken).

An oral assurance was given that containers would be shipped below deck. However, the written contract gave the carriers freedom to decide the method of transportation and exempted them from loss or damage to the goods. The goods were damaged and the carriers sought to rely on the writing. The majority of CA held that oral assurance was a term of the contract which was partly written and partly oral. This oral term overrode the written conditions.

An oral promise can be so important to the decision to enter the contract that it overrides conflicting written terms.

Tenants of a Council tower block claimed that the Council landlord was in breach of an implied obligation to repair and maintain the common parts of the building, i.e. to ensure that the lifts and lighting worked and that the rubbish chutes were not blocked. There was nothing stated expressly on this matter in the lease. HL held that the nature of the contract required an implied term but it was not a guarantee obligation, only an obligation to use reasonable care to keep the common parts in reasonable repair and use. The Council was not in breach of this (qualified) implied contractual obligation.

Implication of term in law as a necessary incident of the type of contract. However, the implied term may be a qualified contractual obligation (reasonable care and skill) rather than a strict (guarantee) obligation.

It was a ‘condition’ of an exclusive distribution contract (over a period of four and a half years) that the distributor ‘shall send its representative to visit [the six largest UK motor manufacturers] at least once in every week’ to solicit orders. The distributor failed to make a number of these visits and the agreement was terminated. The majority of HL held that this term was not a condition in the sense that a single breach, however trivial, would entitle the innocent party to terminate the contract.

The fact that a term is called a ‘condition’ is not conclusive.

Breach of a 24-month charter as the ship was not seaworthy on departure. It broke down and needed repairs. The charterers terminated but the ship was returned to seaworthy condition when there were still 17 months of the original 24-month term remaining. CA held that the term broken was not a condition but an innominate term and since the effects of the breach were not sufficiently serious to justify termination, the charterers had no right to terminate when they did.

Breach of an innominate term may or may not constitute a repudiatory breach depending on whether the effects of the breach were sufficiently serious to deprive the innocent party of substantially the whole benefit they were intended to get under the contract.

Ps were to advertise D’s business on litterbins for three years. Before the date when contractual performance was to begin, D repudiated and asked Ps to cancel the agreement. Ps refused and went ahead and performed their side of the agreement for the three-year period. They made no attempt to minimize their loss by finding other advertisers to take D’s place. They then sued D for the contract price (i.e. an agreed sum rather than damages). HL (3:2) decided Ps could continue and claim the contract price. They were not bound to accept the repudiation and sue for damages.

Following anticipatory repudiatory breach, the innocent party may affirm (assuming legitimate interest in continuing to perform rather than terminating and claiming damages) and can (if able to do so without the other party’s cooperation) continue to perform the contract and claim the contract price (as action in debt—no duty to mitigate).