Thursday, December 13, 2007

What is innominate Terms ?

Innominate terms - (intermediate terms) Terms of a contract that cannot be classified as conditions or warranties. The parties to a contract may label the terms of the contract as either conditions or warranties and those labels will usually be respected by the courts provided that the result is reasonable. Similarly, certain terms have traditionally been treated as conditions or warranties even though they have not been labelled as such (for example, time clauses in mercantile contracts are to be treated as conditions). Innominate terms are those that will not fit the above categories. The remedy for breach of an innominate term will depend on whether or not the breach is of a fundamental nature, i.e. that the injured party has been deprived of substantially the whole of the benefit of the contract. If the injured party has been so deprived, he will be entitled to treat the contract as repudiated and claim damages. If not, he will be entitled to damages only.

NI Act_Practicle Problems_50

B signs the following endorsements on different negotiable instruments pay­able to bearer. Classify the endorsements with reasons as Blank Endorsement or Full Endorsement or Restrictive Endorsement or Partial Endorsement or Conditional Endorsement. Also, state whether the following Endorsements are valid or invalid.

a. No other words except B's signature.
b. Pay C.
c. Pay C or order.
d. Pay C only.
e. Pay C or order for the account of B.
f. Pay C or order Rs 500 out of Rs.1,000.
g. Pay C or order being the unpaid residue of the bill.
h. Pay C or order on safe receipt of goods.
i. Pay C sans Recourse.
j. Pay C sans Frais.
k. Pay C, notice of dishonour dispensed with.

NI Act_Practicle Problems_49

P, the holder of a bill of exchange, transfers it to Q without consideration. Q also transfers it to R without consideration. R transfers it to X for consideration. X transfers it to Y without consideration. State whether Y can recover the amount of such instrument from X or P.