Some Problems about Fundamental Terms

Abstract

Is fitness for purpose a fundamental term in hire-purchase contracts?The need for clarification of concepts and propositions in the area of the position of exemption clauses has already been demonstrated by the discussion of the difference between “fundamental terms” and “fundamental breach”. In the Charterhouse case we have seen one variety of judicial approach arising from this difference. But there is a further conflict of judicial opinion in the case which calls for further clarification of doctrine. The three members of the Court of Appeal agree that apart from the limited provision of the Hire-Purchase Acts there is to be implied in all hire-purchase agreements a fitness for purpose term. But while Ormerod L.J. describes such a term as fundamental, Upjohn L.J. denies that it possesses this character. Donovan L.J. is probably in accord with the view of Upjohn L.J. though he makes no explicit statement. Upjohn L.J. envisages hire-purchase agreements as containing a fundamental “correspondence with description” term in addition to a non-fundamental “fitness for purpose” term. These judicial opinions are derived from the precedents. These are few in number and can be examined separately. This examination, it is submitted, will show that much of the conflict is terminological and that the subject is in need of further theoretical analysis.