Terms Flashcards
(23 cards)
A golf club contracts with a local plumbing company to have some showers serviced and pipes cleaned at its newly refurbished golf park. Following the servicing , it is found that some showers were incorrectly re-installed and the cold-water supply now connects to the hot-water taps. The golf club needs advice upon the likely classification of the contractual term implied under the Supply of Goods and Services Act 1982 (the ‘Act’) that appears to have been breached.
Which of the statements below is the most accurate advice?
(a) The term breached is an innominate term and so could be treated as a condition or warranty depending on the seriousness of the effects of the breach.
(b) The term breached is categorised as an express term by the Act.
(c) The term breached is categorised as a condition by the Act.
(d) The term breached is categorised as a warranty by the Act.
(e) The term breached is a condition unless pursuant to the Act the breach is deemed so minor it would be unreasonable to allow termination of the contract.
(a) The term breached is an innominate term and so could be treated as a condition or warranty depending on the seriousness of the effects of the breach.
This is a S 13 SGSA 1982 breach as reasonable care and skill has not been used when performing the contract. However, the Act does not classify the term. S 13 is as an innominate term, and depending on the seriousness of the effects of the breach of contract, the term can be treated as either a condition or warranty (Hong Kong Fir v Kawasaki).
A supplier and a buyer are considering contracting for the supply of 100 bedsheets. The buyer says “Quality is important to us. How many thread-count are they?”. The supplier replies “They are very high quality bedsheets – 1,000 thread-count each”. Reassured, the buyer enters a simple oral contract with the supplier to purchase 100 bedsheets. The buyer later discovers the bedsheets are only 150 thread-count and therefore not high quality.
Is the statement “They are very high quality bedsheets - 1,000 thread-count each” likely to be a representation on which a claim in misrepresentation could be based and/or to have become a term of a contract?
(a) It is likely to be both a representation and a term.
(b) It is likely to be a term, but not a representation.
(c) It is likely to be mere puff and also a representation, but not a term.
(d) It is likely to be a representation, but not a term.
(e) It is likely to be only mere puff, and neither a representation nor a term.
(a) It is likely to be both a representation and a term.
It is a representation as it is a statement of fact which induces the making of the contract. It is also an express term as it was clearly important to the buyer, and the supplier knew this. A statement cannot be both a representation and mere puff.
What is a term of a contract?
(a) Statements made by the parties in order to induce formation of the contract but which the parties do not intend to be binding
(b) Statements made by one party to coerce another party into a contract
(c) Statements of fact made by the parties which they intend to be binding
(d) Statements made by the parties which have no legal effect
(c) Statements of fact made by the parties which they intend to be binding
These statements are normally promissory in nature
Which factor is not generally relevant when deciding whether the parties to a contract intended a statement to be binding?
(a) The importance of the statement
(b) The age of the person making the statement
(c) The timing of the statement
(c) Special knowledge or skill of the person making the statement
(b) The age of the person making the statement
The age of the person making the statement is not relevant when deciding whether the parties intended the statement to be binding. The factors that are relevant include the timing and importance of the statement and whether the person making the statement had special knowledge or skills
What happens if a term of a contract is not fulfilled as required or at all?
(a) The innocent party can sue for misrepresentation
(b) The innocent party can sue for discharge
(c) The innocent party can sue for breach of contract
(d) The innocent party can sue for rectification
(c) The innocent party can sue for breach of contract
The usual remedy for breach of contract is an award of damages
Which of the following is not a means by which we can ascertain the terms which the parties to a contract intend to be bound by?
(a) Incorporation by agreement
(b) Incorporation by course of dealing
(c) A signed written contract
(d) Incorporation by notice
(a) Incorporation by agreement
This is not a means of ascertaining the terms of a contract. The terms can be ascertained where there is a signed written contract, where there is incorporation by notice, or where there is incorporation by course of dealing
Why was the clause not enforceable against the claimant in Thornton v Shoe Lane Parking?
(a) The claimant was not given reasonable notice of the clause either before or at the time of contracting
(b) The parties previous dealings had not been regular and consistent
(c) The clause was contained in a document that did not have contractual effect
(d) The defendants were prevented from relying on the clause because their employee orally misrepresented the meaning of the clause to the claimant
(a) The claimant was not given reasonable notice of the clause either before or at the time of contracting
For a clause to be incorporated into a contract, reasonable notice of it must be given before or at the time of contracting.
How can parties to a written contract reduce the possibility of a claim that there are binding oral terms alongside the written terms?
(a) The parties can include an ‘entire agreement’ clause in their written contract
(b) The parties can say that there are no binding oral terms alongside the written terms
(c) The parties can include a ‘complete agreement’ clause in their written contract
(d) The parties can include an exemption clause in their written contract
(a) The parties can include an ‘entire agreement’ clause in their written contract
An entire agreement clause provides that a particular contract or set of contracts constitutes the entire agreement between the parties
Which of the following is not a basis for implying terms in fact into a contract?
(a) Where the parties have dealt with each other consistently and regularly in the past
(b) To give business efficacy to a contract
(c) Under the common law
(d) On the grounds of trade or professional customs
(c) Under the common law
Terms implied at common law are not implied in fact. The grounds for implying terms in fact are to give business efficacy to a contract, where the parties have dealt with each other consistently and regularly in the past and on the grounds of trade and professional customs.
Which of the following is correct regarding a term implied by statute?
(a) The term operates irrespective of the intention of the parties unless there is a valid exemption clause
(b) A statutory implied term is binding to a less extent compared to an express term
(c) The term is implied to give effect to the presumed but unexpressed intentions of the parties
(d) The term is imposed in the contract by the courts
(a) The term operates irrespective of the intention of the parties unless there is a valid exemption clause
Statutory implied terms are imposed in contracts by statute and they operate irrespective of the intention of the parties unless there is a valid exemption clause
Which of the following statute does not contain implied terms?
(a) Sale of Goods Act 1979
(b) Supply of Goods and Services Act 1982
(c) Consumer Rights Act 2015
(d) Unfair Contract Terms Act 1977
(d) Unfair Contract Terms Act 1977
The Unfair Contract Terms Act 1977 regulates exemption clauses. The Sale of Goods Act 1979, Supply of Goods and Services Act 1982 and Consumer Rights Act 2015 all contain implied terms
Sale of Goods Act 1979
Which of the following is correct about the Sale of Goods Act 1979?
(a) The Sale of Goods Act 1979 implies a term that the goods will be of satisfactory quality if they meet the standard that the buyer of the goods regards as satisfactory
(b) The Sale of Goods Act 1979 implies terms to an agreement between a trader and a consumer
(c) The terms implied by ss 13, 14 and 15 of the Sale of Goods Act 1979 cannot be excluded or restricted by agreement of the contracting parties
(d) The Sale of Goods Act 1979 implies a term that the seller of goods has a right to sell the goods
(d) The Sale of Goods Act 1979 implies a term that the seller of goods has a right to sell the goods
The Act implies a term that the seller of goods has a right to sell the goods. This implied term is found in s.12(1) of that Act.
The SGA applies to business-to-business contracts only, and not to consumer contracts ie between a trader and a consumer. Satisfactory quality under the Act is judged on an objective basis (s14(2)), and contracting parties can agree to exclude or restrict ss13,14 and 15 of the SGA 1979, subject to the Unfair Contract Terms Act 1977.
Sale of Goods Act 1979
A restaurant purchases 30 round tables for its business. When the tables are delivered they are rectangular. Which section of the Sale of Goods Act 1979 implied into this contract is most likely to have been breached?
(a) S 14(3)
(b) S 15(3)
(c) S 14(2)
(d) S 13
(d) S 13
It is likely that this table does not correspond with its description.
Sale of Goods Act 1979
A property development company purchases some radiators. The radiators do not heat up properly. Which section implied by the Sale of Goods Act 1979 is most likely to have been breached?
(a) S 14(3)
(b) S 15(3)
(c) S 14(2)
(d) S 13
(c) S 14(2)
The goods are not of satisfactory quality as they are not fit for the purpose for which they are commonly supplied
The director of a minicab business hires a vehicle from a hire company for use in his minicab business. Which of the following implied terms is relevant to the contract between the two businesses?
(a) S 9 of the Supply of Goods and Services Act 1982
(b) S 9 of the Consumer Rights Act 2015
(c) S 14(2) of the Sale of Goods Act 1979
(d) S13 of the Supply of Goods and Services Act
(a) S 9 of the Supply of Goods and Services Act 1982
The Supply of Goods and Services Act 1982 does not imply terms in which type of contracts?
(a) Contracts for the supply of services.
(b) Contracts of sale of goods
(c) Certain contracts for the transfer of property in goods
(d) Contracts for the hire of goods.
(b) Contracts of sale of goods
The Supply of Goods and Services Act 1982 does not apply to contracts of sale of goods (see s1(2)(a) of the 1982 Act).
The SGSA however applies to, and implies terms to contracts for the hire of goods, contracts for the supply of services and certain contracts for the transfer of property in goods
A service that is carried out in the course of a business needs to meet what standard under the Supply of Goods and Services Act 1982?
(a) A satisfactory standard
(b) Performed with reasonable care and skill
(c) An absolute standard - liability is strict
(d) The relevant industry standard
(b) Performed with reasonable care and skill
See S 13 SGSA 1982.
The Consumer Rights Act 2015 regulates contracts entered into by what people?
(a) A business and a consumer
(b) A company and a consumer
(c) A trader and a consumer
(d) A business and a business
(c) A trader and a consumer
S1(1) of the 2015 Act states that the Act regulates agreements between a trader and a consumer. Sections 2(2) and 2(3) of the Act define a trader and a consumer.
A university student buys an e-book from an online bookshop for £29.99. The e-book is missing several pages and the writing is blurred. Which implied term is the student likely to rely upon against the bookshop?
(a) S.49(1) of the Consumer Rights Act 2015
(b) S.34(1) of the Consumer Rights Act 2015
(c) S. 9(1) of the Consumer Rights Act 2015
(d) S.14(2) of the Sale of Goods Act 1979
(b) S.34(1) of the Consumer Rights Act 2015
The contract is between a bookshop (a trader) and a student (a consumer) therefore the Consumer Rights Act 2015 applies. An e-book is an example of digital content. S.34(1) of the 2015 Act states that ‘every contract to supply digital content is to be treated as including a term that the quality of the digital content is satisfactory.’
What remedy is available to a consumer under the Consumer Rights Act 2015 where a trader breaches the implied term that the trader must perform the services contract with reasonable care and skill?
(a) The consumer has a right to receive a refund from the trader of all money paid by the consumer for the service
(b) The consumer has a right to require the trader to perform the service again to the extent necessary to complete its performance in conformity with the contract
(c) The consumer has a right to reject the service
(d) The consumer has a right to treat the contract as at an end because of the breach
(b) The consumer has a right to require the trader to perform the service again to the extent necessary to complete its performance in conformity with the contract
The right to repeat performance is governed by s.55 of the Consumer Rights Act 2015. Where a trader breaches the implied term that he must perform the services contract with reasonable care and skill, the consumer has only two remedies available to him under the 2015 Act. The first is the right to repeat performance already stated, and the second remedy is the right to a price reduction.
Which option is not available to an innocent party following breach of a condition by the other party to the contract?
(a) The innocent party can waive the right to repudiate, affirm the contract and sue for damages
(b) The innocent party can accept the repudiatory breach, affirm the contract and sue for damages
(c) The innocent party has the right to treat the contract as repudiated and sue for damages
(d) The innocent party can terminate the contract and sue for damages
(b) The innocent party can accept the repudiatory breach, affirm the contract and sue for damages
An innocent party cannot both affirm the contract and accept the repudiatory breach. Affirming the contract means continuing with it despite the breach. Accepting the repudiatory breach means treating the contract as terminated. These are mutually exclusive options. If the innocent party chooses to affirm, they can only sue for damages. If they choose to accept the repudiatory breach, they can terminate the contract and sue for damages.
Under the Sale of Goods Act 1979, what is the classification of the implied term that goods will correspond with their description?
(a) The term is classified as an innominate term
(b) The term is classified as a warranty
(c) The term is classified as an intermediate term
(d) The term is classified as a condition, but it may be treated as a warranty if the breach is so slight that it would be unreasonable for the buyer to reject the goods
(d) The term is classified as a condition, but it may be treated as a warranty if the breach is so slight that it would be unreasonable for the buyer to reject the goods
The term is classified as a condition by s 13(1A). However, s 15A of the Act must be considered and the classification of the term may change depending on the severity of the breach.
What is the remedy for breach of an innominate term?
(a) The innocent party has a statutory right to terminate the contract and sue for damages in all situations
(b) The innocent party is limited to suing for damages where the consequence of the breach is minor
(c) The innocent party can rescind the contract and sue for damages where the consequences of the breach are serious
(d) The innocent party can treat the contract as repudiated and sue for damages where the consequences of the breach are minor
(b) The innocent party is limited to suing for damages where the consequence of the breach is minor
The remedy for breach of an innominate term can be identified by applying the test in the case of Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd.
The test focuses on the consequences of the breach and asks the question whether the breach has deprived the innocent party of substantially the whole benefit of the contract. Where the question is answered in the affirmative, ie the consequences of the breach are serious, the term will be treated as a condition. Where the question is answered in the negative, ie the consequences of the breach are minor, the term will be treated as a warranty.
Regarding the other options, note that the remedy of rescission is not available for breach of contract.
