Commercial Practice - SGA & UCTA

Question 1

What does S2 (1) SGA define a sale of goods contract as? (1)

Answer 1

A contract by which the seller transfers or agrees to transfer the property in goods to the buyer for money consideration called the price.

Question 2

What does the SGA imply? (1)

Answer 2

It implies default terms into all contracts for the sale of goods, though only in the absence of agreement to the contrary between the parties.

Question 3

Can parties to a sale of goods contract vary the implied terms of the SGA? (1)

Answer 3

Yes, provided such variation does not fall foul of UCTA 1977 Reasonableness Test.

Question 4

What does S13(1) SGA provide? (1)

Answer 4

Goods should correspond with their description.

Question 5

What does S14(2) SGA provide? (1)

Answer 5

Goods should be of satisfactory quality.

Question 6

What does S14(3) SGA provide? (1)

Answer 6

Goods should be reasonably fit for the purposes made known to the seller.

Question 7

What are S13(1), 14(2) and 14(3) SGA all? (1)

Answer 7

Conditions.

Question 8

What does the breach of S13(1), 14(2) and 14(3) entitle the buyer to? (3)

Answer 8

A choice of three remedies:
1. Reject goods, terminate contract and claim damages.
2. Reject goods, affirm contract and claim damages.
3. Accept goods and claim damages (treat condition as a warranty).

Question 9

When is the buyers right to reject goods lost? (3)

Answer 9

1. The buyer has expressly or by implication waived the breach.
2. Where the breach is so slight that it would be unreasonable for the buyer to reject the goods (S15A SGA).
3. The buyer has accepted the goods.

Question 10

Under S35 SGA when is the buyer deemed to have accepted the goods? (2)

Answer 10

(a) when he intimates to the seller that he has accepted them. (b) when the goods have been delivered to him and he does not act in relation to them which is inconsistent with the ownership of the seller.

Question 11

Under S35(4) SGA, when else is the buyer deemed to have accepted the goods? (1)|

Answer 11

After the lapse of a reasonable time, the goods are retained without intimating to the seller he has rejected them.

Question 12

Under S35(2) SGA when has the buyer not deemed to have accepted the goods? (1)

Answer 12

Where goods are delivered to the buyer, he has not previously examined them, he is not deemed to have accepted them he has had a reasonable opportunity of examining them.

Question 13

What does S55 SGA 1979 provide in relation to exclusion / limitation clauses? (1)

Answer 13

They are permissible providing they comply with the requirements of the UCTA 1977.

Question 14

What could be restricted by exclusion / limitation clauses? (1)

Answer 14

Remedies for breach of S13(1), 14(2) and 14(3) provided they comply with UCTA 1977.

Question 15

What do we have to consider when assessing what remedies are available for breach of S13(1), S14(2) and S14(3) SGA 1979? (2)

Answer 15

Whether the sale of goods contract contains an exclusion / limitation clause and whether this clause is valid under UCTA 1977, if it passes the reasonableness test.

Question 16

What does UCTA 1977 limit? (1)

Answer 16

The extent to which one party to a contract can avoid liability through the use of exclusion / limitation clauses.

Question 17

What does S13 UCTA mean? (2)

Answer 17

UCTA does not only apply to straightforward exclusion / limitation clauses but also clauses which make it difficult to establish there is any liability and clauses which exclude or restrict the right of a party, or a remedy that it might otherwise be entitled to.

Question 18

What does S2(1) UCTA provide? (1)

Answer 18

Any term in a contract which purports to exclude or limit liability for death or injury caused by negligence is not valid.

Question 19

What does S2(2) UCTA permit? (1)

Answer 19

A term of a contract to exclude or limit liability for negligence if it passes the reasonableness test.

Question 20

What does S3 UCTA permit? (1)

Answer 20

A term of a contract to exclude or limit liability for breach of contract, where the parties are contracting on the seller’s written standard terms if it passes the reasonableness test.

Question 21

What does S6(1)A UCTA permit? (1)

Answer 21

A term of a contract to exclude or limit liability for breach of S13(1), S14(2) and S14(3) SGA 1979 if it passes the reasonableness test.

Question 22

What does S11(1) and S11(2) require when considering if a term passes the reasonableness test? (1)

Answer 22

Consideration of the factors in Schedule 2 UCTA.

Question 23

What does schedule 2 UCTA include? (3)

Answer 23

A non-exhaustive list of factors a court must have regard to when assessing whether or not an exclusion / limitation clause is reasonable including the bargaining strength of the parties and whether the buyer ought reasonably to have known about the term.

Question 24

When are S11(4) factors relevant and what are they? (3)

Answer 24

When the clause being considered is a limitation clause which seeks to set a monetary cap on the amount that can be claimed. (a) the resources which he could expect to be available to him for the purpose of meeting the liability should it arise (b) how far it was open for him to cover himself by insurance.

Question 25

What happens if the exclusion is reasonable? (1)

Answer 25

The exclusion / limitation clause will be valid, so the liability of the seller will be restricted in line with that clause and the remedies available to the buyer for breach of contract of sale will be reduced accordingly.

Question 26

What happens if the exclusion is unreasonable? (1)

Answer 26

The exclusion / limitation clause will not be valid, so the liability of the seller will not be restricted by that clause and the remedies available to the buyer for breach of contract of the sale will not be reduced accordingly.