Terms and Conditions – a reminder

Terms and Conditions – a reminder

At completion the parties will enter into a lease of the Premises for a term of ten years on the terms set out in Schedule 3

Term - two very different meanings

a) Duration of a contract

e.g. for a term of ten years from the Commencement Date

You call that a fixed term contract

The opposite is a contract with no fixed term which, usually, either party can terminate by giving notice to the other

b) Provision in a contract

e.g. …on the terms set out in the Third Schedule

c) Errors to avoid

i) termless is wrong

Did the writer mean x) a contract with no fixed term or y) a contract with no terms which, I would argue, isn’t a contract? He meant the former

ii) Talking about for how long a criminal was jailed, the term of the sentence is wrong

The correct expression is the length of the sentence but you do talk about a term of imprisonment   

Terms and conditions

a) Is there a difference?

In general conversation, people will use these words interchangeably to mean the provisions of a contract 

As explained in b) immediately below, there is a technical legal difference but only lawyers will be aware of it

b) The terms of a contract are either

  • Conditions (essential terms)

Breach entitles the injured (non-breaching / innocent) party to terminate the contract and to claim damages, or 

  • Warranties (less important terms)

The innocent party is only entitled to sue for damages. It cannot terminate

The above distinction is very technical and legal. I wouldn’t expect laymen ( in this context, non lawyers) to be aware of it

Possible confusion - condition and warranty are also used in different senses

a) A conditional contract

If the condition is a condition precedent, certain provisions of the contract (usually the most important ones) do not come into force unless a specified condition – e.g. receipt of a third party consent – has been met / satisfied

The contract should set out what happens if the condition isn’t met / satisfied by a specified date

b) A warranty

A manufacturer’s warranty

E.g. this car will be free from any defect for three years from the date of purchase

In general conversation, people also refer to this as a manufacturer’s guarantee even though technically it isn’t a guarantee 

Scroll to top