ACCA Corporate and Business Law (F4) Certification Practice Exam 2025 - Free Practice Questions and Study Guide

In contract law, terms can generally be classified as conditions, warranties, or innominate terms, each type having different implications for the parties involved. When a warranty is breached, the injured party does not have the right to repudiate the contract, meaning they cannot terminate the entire contract based on that breach. Instead, the injured party is entitled to claim damages for the loss caused by the breach but must continue to uphold their obligations under the contract.

Conditions are fundamental terms of the contract, and a breach of a condition typically allows the injured party to repudiate the contract. Innominate terms, on the other hand, provide for a mixed approach; whether the injured party can repudiate depends on the severity of the breach and its implications on the contract as a whole.

Therefore, since a breach of a warranty does not entitle the injured party to terminate the agreement but merely provides a claim for damages, this makes warranties distinct in their nature compared to conditions and innominate terms.