ABSTRACT
This chapter concerns the problems that arise in determining the binding terms of an agreement. It examines 'promissory terms' and this terms set out the parties undertaking to perform their part of the bargain and the details surrounding that undertaking, such as how the performance will take place. The most common type of collateral contract is one where the consideration given for the promise is the making of another contract. The House of Lords agreed that there was a third category of term, that is, 'innominate' or 'intermediate' terms, but they stressed that it was not to be used unless there was ambiguity or doubt as to whether a term was a condition or warranty. An innocent party also has the option to treat a broken condition as a broken warranty. A warranty is a term collateral to the main purpose of the contract, breach of which entitles the innocent party only to damages.
