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