Contents (Express and Implied terms)

Question 1

Which three ways can a term be incproapted into a contract?

Answer 1

Signautre;

Reasonable notice before or at the time of the contract

Previous consistent courses of dealing between the parties.

Question 2

What is incporoation by signature?

Answer 2

The rule that where a part signs a contrast, they are bound by the terms within the contract (unless hey contradict statutory controls, or do not form a proper contract/ can overridden by a common law or statuary control).

Question 3

What is the general rule for incorporation by reasonable notice?

Answer 3

If terms are contained in a notice at the point of sale or transaction (or are on the back of a ticket for example) then the party wanting to rely on these terms have to have given reasonable notice at or before the time of the contract.

Question 4

List the factors the court will take into account t in deciding whether or not realisable notice has been given.

Answer 4

• nature of the document;
• timing;
• onerous terms;
• whether the exemption is legible;
• if terms are on the back of the document, does the front of the document indicate as such (eg see terms on back).

Question 5

Explain how the nature of the document may mean reasonable notice is not deemed given.

Answer 5

The court will assess whether the document is one on which a reasonable person would expect there to be contract terms.

Eg a receipt would not be expected to have contractual terms on, as a reasonable person would presume this is receipt of payment.

Question 6

How does timing affect whether or not reasonable notice has been given?

Answer 6

The notice of the term which is incorporated MUSt be com united either prior to the contract or at the time of the contract.

A term contained in an invoice after the event is not sufficiently incorporated.

Question 7

What is an onerous term and when will it affected the validity of the term?

Answer 7

Onerous terms are terms which impose a substantial fine if a particular condition is not met.

The rule is the more onerous a term is, the more a party must do to bring it to the other party’s attention.

Question 8

Explain incorporation by previous consistent course of dealing.

Answer 8

For terms to be incorporated this way, parties must have had a lot of rebular dealings in the past which were all on exactly the same terms and conditions. .

If an invoice is provided after every course of dealings this will not negate the previous course of dealings, provided the dealing have been consistent and on the same terms.

Question 9

Would 4/5 dealings in the space of 5 years be sufficient to count as previous course of dealings?

Answer 9

No.

Question 10

Explain which type of term has to be breached for termination of the contract to be possible

Answer 10

Breach of a condition.

Question 10

What are the three types of terms?

Answer 10

Innominate terms;

Warranties;

Conditions.

Question 11

Explain what is meant by a judicially recognised term.

Answer 11

Some terms in certain inductors are recognised as conditions by the courts regardless of how they are labelled (eg the term ‘expected ready to load’ in a charter contract to hire a ship is always a condition).

Question 11

What are the remedies available for breach of a condition?

Answer 11

Termination of future performance under the contract and damages.

Question 12

How is it determined whether a term is a condition or a warranty?

Answer 12

Just because a term is labelled as a condition, does not mean it is.

Important to look at the circumstances to determine whether the parties meant the term to be a condition (especially where drafted by non-lawyers).

Question 13

What happens if the breach of a term is so slight, termination would seem unreasonable in the circumstances?

Answer 13

The new approach of the court is taken, where courts will instead examine the effect of the brush in oder to determine whether the term was indeed a condition or a warranty.

Question 14

Explain the modern approach of the courts.

Answer 14

If in doubt as to whether the term is a condition or a warranty, or the effect ion a breach of the condition is so slight it would not be realisable to warrant termination of the entire contract, the courts will likely choose to look at the effect of the breach to determine what the term was.

Question 15

What are the four categories of implied term?

Answer 15

• Terms implied by custom;
• Terms implied by in law;
• Terms implied by statute;
• Terms implied in fact.

Question 16

Explain terms implied by custom.

Answer 16

Term may be implied if it reflectors the well-known and legacy binding customs of a particular trade.

Note such a term is not implied by custom if it would contradict an express term of the contract.

Question 17

Explain terms implied by fact.

Answer 17

Term is implied into a contract where parties have not expressly agreed something, but the contest would be unworkable without the relevant term.

Effectively, a term will be implied if it is needed to make commercial sense of their contact (ie something so obvious it goes without saying).

Question 18

Explain terms implied by law.

Answer 18

Where terms are implied because the law regards it as necessary for the particular type of contract.

Eg employment contacts impose an implied duty on the employer to provide healthy and safe environment for the employee to work in, and a duty on the employee to provide honest and loyal service.

Question 19

List the statutory implied terms under the sale of goods act (SGA 1979), which are implied into business to business contacts for the sale and supply of goods and/por services.

Answer 19

12(1) - implied term seller has right to sell the goods;

13(1) - goods must correspond with description;

14(2) - goods must be of satisfactory quality;

14(3) - where seller sells goods in their courses of business, and buyer makes known to the seller any particular purpose the goods are being bought for, implied term is included ensuring goods supplied are reasonably fit for that purpose (unless it is unreasonable for the buyer to rely on the skill and judgement of the seller, or decides not to rely on the judgment of the seller).

Question 20

How is it determined whether goods are of satisfactory quality (pursuant to SGA 1979)?

Answer 20

14(2A) goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price and all other relevant circumstances.

Question 21

Are the implied terms under the SGA 1979 conditions or warranties?

Answer 21

Sections 12,13 and 14 of SGA 1979 are all conditions and impose strict liability (liability does not depend on the fault of the seller).

This means buyer can reject the goods, obtain a refund and claim damages.

Question 22

In what circumstances can a buyer not reject the goods where s12, 13 or 14 SGA 1979 has been breached?

Answer 22

1) where buyer has accepted the goods (eg kept the goods beyond a reasonable time without seeking to reject them); or

2) in relation to s13 and s14, where the breach is so slight it would be unreasonable to reject the goods.

Question 23

Which types of contracts are covered by the SGSA 1982?

Answer 23

Contracts for service/work (eg furniture removal); or

Contracts involving both the supply of work and materials (ie hybrid of goods and services being offered such as supply and fitting of a new kitchen).

Question 24

Explain s2(1) of the SGSA 1982 and whether or not it is a condition imposing strict liability.

Answer 24

Where goods are being transferred, implied that seller had the right to transfer ownership of the goods.

This relates to contracts for work and materials.

it is a condition and therefore termination is a remedy.

Question 25

Explain s3 of the SGSA 1982 and whether or not it is a condition imposing strict liability.

Answer 25

Implies that the supply of the goods will correspond with its description.

This relates to contracts for work and materials.

it is a condition and therefore termination is a remedy.

Question 25

Explain s4(2) of the SGSA 1982 and whether or not it is a condition imposing strict liability.

Answer 25

Implies that the goods are of a satisfactory quality.

This relates to contracts for work and materials.

it is a condition and therefore termination is a remedy.

Question 25

Explain s4(5) of the SGSA 1982 and whether or not it is a condition imposing strict liability.

Answer 25

Where buyer makes it known to seller the purpose for which the goods are to be used, and the buyer reasonably relies on the supplier’s skill and knowledge, term is implied that goods will be fit for that purpose.

This relates to contracts for work and materials.

it is a condition and therefore termination is a remedy.

Question 26

Explain s15 of the SGSA 1982 and whether or not it is a condition imposing strict liability.

Answer 26

Applies to contracts for work and material and service contracts.

Implies a term that service done is carried out with rinsable care and skill.

This is treated as an innominate term so the court will look at the effect of the breach to determine whether or not termination is a suitable remedy. Damages would be awarded at least.

Question 27

Explain the effect of s14 SGSA 1982 and the implications of breaching such a term.

Answer 27

Applies where work or service done in the course of a business and no timing as to performance has been agreed, the term implies it must be don within a reasonable time.

This is an innominate term and therefore court looks at effect of the breach to determine whether termination is appropriate.

Question 28

Explain the effect of s15 SGSA 1982 and the implications of breaching this term.

Answer 28

Implies that if price for work or service is not fixed, a reasonable sum but be charged.

This is an innominate term so effect of the breach will determine whether or not the breach

Question 29

What types of contracts does the consumer rights act 2015 apply to?

Answer 29

Business to consumer contracts.

Question 30

Explain s9 of the CRA 2015 and which types of contracts it applies to.

Answer 30

S9 implies that goods must be of a satisfactory quality.

It applies to contracts for the sale of goods, and the supply of goods under a goods and services contract.

Question 31

Explain s10 of the CRA 2015 and which contracts it applies to.

Answer 31

This implies into contacts that where goods re sold by the seller in the course of business, and the buyer makes it known to the seller the purpose for which the goods are for (either expressly or impliedly), and the buyer reasonably relies on the seller’s skill/ knowledge, the goods must be fit for purpose.

This applies to contracts for the sale of goods, and the sale of goods under a contact for goods and services.

Question 32

Explain s11 of the CRA 2015 and which contracts it applies to.

Answer 32

Where there is a sale/supply of goods by description, there is a term implied that the goods will correspond with that description.

This applies to contracts for the sale of goods, and the sale of goods under a contact for goods and services.

Question 32

Explain s17 of the CRA 2015 and which contracts it applies to.

Answer 32

Implies into contracts that the seller has the right to sell or transfer the goods at the time when the ownership of the goods is to be transferred.

This applies to contracts for the sale of goods, and the sale of goods under a contact for goods and services.

Question 33

Explain s49 of the CRA 2015 and which contracts it applies to.

Answer 33

Where work or a service is done in the course of a business there is an implied term that it will be carried out with reasonable care and skill.

This applies to service contracts for the provision of goods and services.

Question 34

Explain s51 of the CRA 2015 and which contracts it applies to.

Answer 34

If price for work or service has not been fixed, this implies into the contract that a reasonable sum will be charged.

This applies to service contracts for the provision of goods and services.

Question 35

List the rights consumers have where there is a breach of the implied terms (under the CRA 2015) about the goods thy receive (ie sections 9-11 CRA 2015 are breached).

Answer 35

1) short term right to reject ad get full refund under section 20 and 22;

2) right to repair or replacement (if appropriate) under section 23;

3) right to a price reduction or the final right to reject and get a partial refund to reflect the consumers use of the goods - under section 20 and 24.

Question 36

Explain s52 of the CRA 2015 and which contracts it applies to.

Answer 36

Where work or a service is done in the course of business and no time as to the performance has been agreed, this implies a term into the contract that the wrk will be done within a reasonable time.

This applies to service contracts for the provision of goods and services.

Question 37

Explain he short term right to rejection.

Answer 37

Unless agreed otherwise in the contract, short term right to rejection of the goods (on-perishable goods) is 30 days after they have been bought or delivered (or installed if appropriate).

With perishable goods, time limit is no longer than the goods could reasonably be expected to last.

Question 38

Explain the customers rights to enforce terms about services/work carried out.

Answer 38

S54 provides that where a service/ work does not conform to the contract because either:

• there is a breach of an express term relating to performance; or
• there is a breach of an implied term to exercise reasonable care and skill (s49)

the consumer will have the right to require repeat performance (where reasonable) or to a price reduction.

In relation to a breach of s52 (performance within a reasonable time) consumer has the right to an appropriate price reduction price reduction.

Question 38

Explain the time limit for other rights (ie right to repair ad replacement and right to price reduction or final right to reject and get partial refund).

Answer 38

This will be within 6 months of the goods being bought, delivered or installed.

For perishable goods, they must be proven to not have confirmed to the contract on the day they are delivered.

Question 38

If a customer rejects goods under s9 for being inherently faulty, was are their remedies?

Answer 38

Provided it is within the window of short term repair, the client can:

• reject the goods;
• claim a refund; and
• claim damages for any extra money needed to pay for the same goods elsewhere.