Charter Party Innominate Terms : “intermediate terms”

The rules concerning conditions and warranties are extremely rigid and this can lead to remedies out of all proportion to the original fault. For example, in one case, a buyer was entitled to reject barrel staves, which were only one sixteenth of an inch narrower than they should have been, even though they were still perfectly suitable for the purpose for which they were intended, i.e. for making barrels (Arcos Ltd v E A Ronaasen & Son [1933] AC 470). This seems to have disturbed the courts; they have therefore introduced a more flexible solution, the “innominate term”. This is neither a condition nor a warranty. Innominate means ‘without a name’. They are sometimes also called “intermediate terms”, i.e, terms somewhere between warranties and conditions. We can also say that this is only of any relevance when parties want to dispute the terms of a contract, so that even if both parties agree that there has been a fundamental breach of a condition but that both are prepared to continue to uphold the contract in a commercially friendly manner, then they could easily agree that this breach has been of an innominate term which they now jointly interpret to be breach of a ‘warranty’. In the case of innominate terms, the remedy made available depends on the seriousness of the consequences of the breach of the term in each particular case. This gives the courts far more discretion and manoeuvrability