Contents of a contract

Question 1

How many express terms be incorporated into a contract?

Answer 1

1. Signature
2. Reasonable Notice at the time or before the contract
3. A previous course of dealing. The parties must have had a lot of regular dealings in the past that were all on exactly the same terms and conditions.

Question 2

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

Answer 2

Nature of the document- is the document one which a reasonable person would expect there to be contract terms?

Timing- the notice must come before or at the time of the contract not afterwards.

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

if the term is set out on the back of a document are there words on the front drawing the other party’s attention to them, such as ‘see terms overleaf’.

Question 3

What are terms classified as?

Answer 3

1. conditions ( important terms)
2. warranties (minor terms)
3. Innominate terms.

Question 4

What options are available to the non defaulting party where a condition is breached?

Answer 4

The innocent party can terminate future performance of the contract as well as claim damages OR can decide to affirm the contract.

Question 5

What options are available to the non defaulting party where a warranty is breached.

Answer 5

The only remedy is damages however serious the breach is.

Question 6

How would a term or a warranty be identified in a contract?

Answer 6

In a written contract the terms may be specifically identified as conditions or warranties or otherwise a contract may specify what will be the consequences of breach.

Question 7

What happens if a contract has been drafted by a non-lawyer and they have been unaware of the significance of calling a particular term a ‘condition’?

Answer 7

it will be a case of looking at all the circumstances and deciding whether, or not, the parties could have intended breach of the particular term to lead to the possibility of termination.

Question 8

What are ‘innominate’ or ‘intermediate’ terms?

Answer 8

These are terms which the Courts have adopted a ‘wait and see’ approach.

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 9

How may terms be implied into a contract?

Answer 9

*Terms implied by custom
* Terms implied in fact
* Terms implied
*Terms implied by statue.

Question 10

Explain how terms may be implied by custom?

Answer 10

terms may be implied If it reflects what are regarded as the well known and legally binding customs of a particular trade.

Question 11

How would a term not be implied by custom?

Answer 11

If it contradicts an express term of the contract.

Question 12

What are terms implied in fact

Answer 12

This is where 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.

It is taken that the parties have implicitly agreed what is necessary to make commercial sense of their contract, i.e something that is so obvious it goes without saying.

Question 13

What are Terms implied in law

Answer 13

This is where a term is implied into the contract, because the law regards it as a necessary incident of a particular type of contract.

For example, in an employment contract, there is an implied duty on the employer to provide a healthy and safe environment for the employee to work in

Question 14

What are terms implied by statue

Answer 14

a ‘sub-category’ of terms implied in law. You normally see them in business to business contracts for the sale and supply of goods and services.

Question 15

What are the relevant statues in business to business contracts for the sale and supply of good or services

Answer 15

Sales of goods act 1979

Supply of goods and services act 1979

Question 16

What is the implied term in s12(1) of Sale of Goods Act 1979

Answer 16

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.

Question 17

What is the implied term in s13(1) of Sale of Goods Act 1979

Answer 17

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.

Question 18

What is the implied term in s14(2) of Sale of Goods Act 1979

Answer 18

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.

Question 19

What is the implied term in s14(2A) of Sale of Goods Act 1979

Answer 19

Goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking into account of any description of the goods, the price.

Question 20

What is the implied term in s14(3) of Sale of Goods Act 1979

Answer 20

Where the seller sells goods in the course of a business and the buyer, expressly or by implication, makes it 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 reasonable fits for that purpose.

Question 21

What is the significance of s12, 13 and 14 of the Sales of Goods Act 1979.

Answer 21

They are all classified by the act as conditions and they impose strict liability.

The fact that they are conditions, means the innocent party can reject the goods, claim a refund as well as also claiming damages.

Question 22

What does strict liability mean

Answer 22

That the seller need not personally be at fault for the goods not matching their description or otherwise being defective. The point is that for some reason the goods do not comply with one, or other of the terms implied by the SALES OF GOODS ACT, the actual reason why is irrelevant.

Question 23

In what circumstances would an innocent party would be barred from rejecting the goods under the Sales of Goods Act 1979

Answer 23

(A) Where the buyer has accepted the goods or otherwise kept the goods beyond a reasonable time without seeking to reject them. or

(B) In relation to s13 and 14, where the breach is so slight that it would be unreasonable to reject the goods.

Question 24

What kind of activities fall under the Supply of Goods and Services Act 1982

Answer 24

1. Contracts for a service/work for example furniture removal contract and logistics contract.
2. Contracts that involve both the supply of work and material goods e.g a contract to supply and fit a new kitchen.

Question 25

What are the implied terms of the Supply of goods and Services Act 1982 and which of these are conditions or innominate terms?

Answer 25

s2(1) have a right to transfer the property ownership in the goods.. This is a condition

s3 The good will correspond with that description.. this is a condition.

s4(2) Where the goods are supplied in the course of a business, it is an implied term that the goods will be of satifactory quality.. this is a condition.

s4(5) Where the good are supplied in the course of a business, and the buyer makes know to the supplier their purpose for goods (either expressly or impliedly) and reasonably relies on the suppliers skill/knowledege, there is an implied term that the goods will be fir for that purpose….This is a condition

S13 The work or service is carried out with reasonable care and skill… This is an innominate term

S14 ~Where no time for performance has been agreed, it is implied that the work will be done within a reasonable time… this is an innominate term.

s15- If a price for work or service has not been fixed, there is an implied term that a reasonable sum will be charged… this is an innominate term

Question 26

Do s13-s15 of the SUPPLY OF GOODS AND SERVICES ACT 1982 impose strict liability

Answer 26

no, as they are innominate terms. Also s14 and 15 only apply in absence of express agreement to the contrary.

Question 27

What is the relevant statue for terms implied into business to consumer contracts for the sale of goods and supply of goods and services

Answer 27

Consumer Rights Act 2015

Question 28

What are the implied terms of the Consumer Rights Act 2015

Answer 28

S9- The goods will be of satisfactory quality. ( Strict Liabilty)

S10- Where the buyer relies on the seller’s skill/knowldege, there is an implied term that the goods will be fit for that purpose. ( Strict Liability)

S11 Where there is a sale/supply by description there is an implied term that the goods will corresspond with that description.

S17- The seller has the right to sell or transfer the goods at the time when ownership of the goods is to be transferred.

S49- 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.

s51- If a price for work or a service has not been fixed, there is an implied term that a reasonable sum will be charged

s52- Where work or a service is done and no time for performance has been agreed, it is implied that the work will be done within a reasonable time.

Question 29

What remedies does the courser have under s19 of CRA 2015 if the GOODS do not conform to the contract because of a breach of sections 9-11

Answer 29

(a) The consumer has a short-term right to reject and get a full refund
(b) the right to repair or replacement
(c) The right to a price reduction or the final right to reject and get a partial refund to reflect the consumers use of the goods.

This is a pecking order of remedies. If a short term right to reject has been lost, then consider whether it is appropriate/reasonable to get the goods repaired or replaced. If not then the consumer may be entitled to an appropriate price reduction or to reject the goods and to get partial refund of the price.

Question 30

Do the rights set out in s19 CRA 2015 affect the consumer’s common law right to claim damages?

Answer 30

No, if the remedies set out in s19 do not fully compensate the buyer for losses suffered as a result of the breach damages may be awarded too.

Question 31

What is the time limit to the short term right for the consumer to reject goods under S19 CRA 2015

Answer 31

Unless the parties have agreed otherwise, the time limit for the short term right to reject non-perishable goods is 30 days after they have been bought, delivered and where appropriate installed.

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

Question 32

What is the time limit for the consumers right to a repair or replacement; and the right to a price reduce or the final right to reject and get a partial refund to reflect the consumer’s use of the goods.

Answer 32

if the goods do not conform to the contract at any time within six months of the date of delivery, they will be taken as not having conformed too the contract on that day.

Question 33

Are there any exceptions to the time limit for the consumers right to a repair or replacement; and the right to a price reduce or the final right to reject and get a partial refund to reflect the consumer’s use of the goods.

Answer 33

The only exception 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

Question 34

What rights does the consumer have under CRA 2015 to enforce terms about SERVICE/WORK

Answer 34

S54 of the CRA 2015 provides that 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 (s49), the consumer has the right to require repeat performance or to a price reduction.

Question 35

What Rights does the consumer have to enforce terms about SERVICES/WORK in relation to a breach of the implied term as to performance within a reasonable time?

Answer 35

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