Charter Party Warranties

Warranties have been described as terms which, although they must be performed, are not so vital that a failure to perform them goes to the root or substance of the contract. This becomes important when considering what remedies to apply. Because a condition is a term that is vital to the contract, breach of a condition gives the innocent party not only the right to damages i.e. to seek monetary compensation but also the right to repudiate the contract, i.e. the right to refuse performance of their own obligations under the contract. The innocent party can, however, choose (elect) to affirm the contract and claim only damages. This is sometimes called ‘innocent party’s election.’ Because a warranty is not so important, a breach will not justify a refusal to perform the contract. The only remedy for breach of a warranty will be damages.