BUSINESS LAW(All contractual terms are either categorised as Essay

BUSINESS LAW(All contractual terms are either categorised as conditions or warranties. How true is this statement Discuss, with reference to case law. ) - Essay Example There ought to be a consideration that will pass hands once the promises of the contract have been fulfilled. Finally, the agreement should be not violate the laws of the land. For example, it would be illegal to enter into an agreement of drug trafficking. Once these conditions have been fulfilled, the agreement becomes a contract that can be enforced by the court of law.2 As such, all contractual terms are either categorized as conditions or warranties Terms of contracts are promises or statements made by one person to another in order to encourage him to enter into a contract.3They comprise of duties and responsibilities of the parties to a contract. The terms may be express or implied. The parties themselves put down express terms, either in writing or verbally. In a written contract, any statement is an explicit term of the contract. An example is in Duffy & Ors v. Newcastle United Football Co. Ltd. (2000). The law from the actions or intentions of the parties infers implied terms of a contract. Shirlaw v Southern Foundries [1939] is a good example of a situation where terms of the contract were implied. In the case, the claimant was hired as a managing director for a term of ten years. Later the defendant altered the articles of association giving the company the power to remove directors. The firm fired the claimant before the end of his ten years contract. The court held that when signing the employment contract there was an assumption that the company would not remove the managing director from his position during the term of the contract. Another assumption was that the enterprise would not alter the articles of association to give it the right to fire the managing director. A condition is a term of a contract that goes to the root of the contract. Failure to honour a conditional term renders an agreement very different from the original one. Hence, conditions are the essential terms of a contract.4 Due to their