Contents

Question 1

What are the ways in which terms may be incorporated into a contract?

Answer 1

Signature.

Reasonable notice before or at the time of the contract.

A previous consistent course of dealing.

Question 2

When will a term not be incorporated even where the contract has been signed?

Answer 2

Where the contents of the document had been misrepresented.

Question 3

What are the factors the courts could take into account in deciding whether, or not, reasonable notice has been given?

Answer 3

Nature of the document: Is the document one on which a reasonable person would expect there to be contract terms?

Timing: The notice must come before or at the time of the contract and not afterwards.

Onerous terms: The more onerous the term, the more a party must do to bring it to the other party’s attention.

Legibility.

Position of the clause.

Question 4

How can terms be incorporated by previous consistent course of dealing?

Answer 4

The parties must have had a lot of regular dealings in the past that were all on exactly the same terms and conditions.

Question 5

How can damages be claimed?

Answer 5

For every breach of contract.

Question 6

When can a claimant terminate a contract?

Answer 6

When an important term of the contract (‘condition’) has been breached and there are outstanding contractual obligations.

Question 7

What is the difference between a condition and a warranty?

Answer 7

Breach of conditions entitle a claimant to terminate the contract whilst the only remedy for breach of warranty is damages.

Question 8

What are implied terms?

Answer 8

Terms implied by necessary implication to make sense of what has been expressly agreed or terms that are so obvious they go without saying.

Question 9

When do terms get implied into contracts?

Answer 9

Terms implied by custom

Terms implied in fact

Terms implied in law

Terms implied by statute

Question 10

How can terms be implied by custom?

Answer 10

A term may be implied if it reflects what are regarded as the well-known and legally binding customs of a particular trade unless these contradict an express term of the contract.

Question 11

How can terms be implied by fact?

Answer 11

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

Question 12

How can terms be implied in law?

Answer 12

A term may be implied into a contract because the law regards it as a necessary incident of a particular type of contract.

Question 13

How can terms be implied by statute?

Answer 13

Through the SGA 1979, SGSA 1982 and CRA 2015.

Question 14

What are the implied terms in the Sale of Goods Act 1979?

Answer 14

s.12(1): In a contract of sale … there is an implied term on the part of the seller that … he has a right to sell the goods.

s.13(1): Where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description.

s.14(2): Where the seller sells goods in the course of a business, there is an implied term that the
goods supplied under the contract are of satisfactory quality.

s.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 (if relevant) and all
the other relevant circumstances.

s.14(3) Where the seller sells goods in the course of a business and the buyer, expressly or by
implication, makes known to the seller … any particular purpose for which the goods are being
bought, there is an implied term that the goods supplied under the contract are reasonably fit for
that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the seller …

Question 15

How are the implied terms in SGA 1979 classified?

Answer 15

As conditions

Question 16

What are the bars to rejecting goods under SGA 1979?

Answer 16

Where the buyer has accepted the goods (eg they have intimated acceptance or
otherwise kept the goods beyond a reasonable time without seeking to reject them); or

In relation to ss.13 and 14, where the breach is so slight that it would be unreasonable to
reject the goods.

Question 17

What are the implied terms in the Supply of Goods and Services Act 1982?

Answer 17

s.2(1) In a contract for the transfer of goods, there is an implied condition on the part of the transferor that they have a right to transfer the property [ownership] in the goods.

s.3 Where there is a supply of goods by description there is an implied term that the goods will correspond with that description.

s.4(2) Where goods are supplied in the course of a business, it is an implied term that the goods will be of satisfactory quality.

s.4(5) Where goods are supplied in the course of a business, and the buyer makes known to the supplier their purpose for the
goods (either expressly or impliedly) and reasonably relies on the supplier’s skill/
knowledge, there is an implied term that the goods will be fit for that purpose.

s.13 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.

s.14 Where work or a service is done in the course of a business and no time for performance has been agreed, it is implied that the work will be done within a reasonable time.

s.15 If a price for work or a service has not been fixed, there is an implied term that a reasonable sum will be charged.

Question 18

Which implied terms in the SGSA 1982 are conditions and which are innominate terms?

Answer 18

s.2(1), s.3, s.4(2) and s.4(5) are conditions whereas s.13, s.14 and s.15 are innominate terms.

Question 19

What are the consequences for the breach of an innominate term?

Answer 19

Only if the breach was really serious and effectively deprived the innocent party of substantially the whole benefit they expected to receive under the contract would they have the choice to terminate or affirm the contract.

Question 20

Where does the Consumer Rights Act 2015 apply?

Answer 20

In business-to-consumer contracts for the sale of goods and supply of goods and services.

Question 21

What are the implied terms in the Consumer Rights Act 2015?

Answer 21

s.9 Where goods are sold/ supplied in the course of a business, there is an implied term that the goods will be of satisfactory quality.

s.10 Where goods are sold/ supplied in the course of a business, and the buyer makes known to the seller their purpose for the goods (either expressly or impliedly) and reasonably relies on the seller’s skill/ knowledge, there is an implied term that the goods will be fit for that purpose.

s.11Where there is a sale/ supply by description there is an implied
term that the goods will correspond with that description.

s.17 The seller has the right to sell or transfer the goods at the time
when ownership of the goods is to be transferred.

s.49 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.

s.51 If a price for work or a service has not been fixed, there is an implied term that a reasonable sum will be charged.

s.52 Where work or a service is done in the course of a business and no time for performance has been agreed,it is implied that the work will be done within a reasonable time.

Question 22

How can a consumer enforce their rights if goods do not conform to the contract because of a breach of ss.9-11?

Answer 22

The consumer has the short-term right (30 days for non-perishable goods) to reject and get a full refund, if not the consumer has a right to repair or replacement (if appropriate) and if not, the consumer has the right to a price reduction or the final right to reject and get a partial refund to reflect the consumer’s use of the goods.

Question 23

What happens if goods do not conform to the contract at any time within six months of the date of delivery in business-to-consumer contracts?

Answer 23

The goods will be taken as not having conformed to the contract on that day. The only exceptions to this are in relation to perishable goods and where it can be proved that the goods did conform to the contract on the day (but this may be very difficult to establish).

Question 24

What happens where a service/work does not conform to the contract because of either breach of an express term relating to the performance of the service/work or breach of the implied term to exercise reasonable care and skill?

Answer 24

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

Question 25

What happens where the implied term as to performance within a reasonable time is breached?

Answer 25

The consumer simply has the right to an appropriate price reduction.