Contract Law - Key Legislation Flashcards
Explain the The provisions of the Contracts (Rights of Third Parties) Act 1999
This grants rights of action to a ‘third party’, who is defined as ‘a person who is not a party to the contract’.
The contract (Rights of Third parties) Act allows third parties to enforce contracts where they had a benefit, despite a lack of consideration. This is enforced via the provisions of the Contracts (Rights of Third Parties) Act 1999.
The act states that - A third party can acquire rights under a contract if;
a) The contract expressly provides that he may acquire a benefit s(1(1)(a); or
b) The term purports to confer a benefit on him (s1(1)(b)
The third party must be expressly identified in the contract by name or by member of a class (e.g. employees) or answering a particular description.
So even though the 1999 Act does not say so expressly, now if you fall within the terms of the Act as a third party it is irrelevant whether or not you provided consideration, you can still claim and thus don’t need consideration to move from the promisee (if you satisfy the criteria in the Act)
Explain the The statutory formal requirements for Estoppel
English law generally has no requirement of writing or any other form that a contract must comply with, in order to be valid or enforceable (though the parties may agree to impose such a requirement on themselves (the discussion of NOM clauses).
In exceptional cases, however, there is a statutory requirement of form, for example for deeds and contracts for the sale of land (under the Law of Property (Miscellaneous Provisions) Act 1989) and contracts of guarantee (under the Statute of Frauds 1677).
Explain The Sale of Goods Act 1979 specifically its Sections 14(6) and 15A
The Sale of Goods Act 1979 is an important piece of legislation that governs the sale of goods in the UK. It provides for the rights and obligations of both buyers and sellers, ensuring that transactions are fair and that goods sold are as described, of satisfactory quality, and fit for their purpose.
Section 14(6): This section states that the terms implied by subsections (2) and (3) of section 14 do not apply to a contract in which the seller sells goods in the course of a business and the buyer, expressly or by implication, makes known to the seller that the goods are required for a particular purpose, so that the buyer relies on the seller’s skill or judgment, and the goods are of a type which it is in the course of the seller’s business to supply (whether he is the manufacturer or not), there is an implied term that the goods will be reasonably fit for such purpose, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the seller’s skill or judgment.
Section 15A: This section was inserted by the Sale and Supply of Goods Act 1994 and it limits the remedies available to the buyer where the breach of contract relates to a term implied by section 14(2) or section 14(3) (which concern the quality and fitness for purpose of the goods) and the goods have been transferred to the buyer. Essentially, Section 15A provides that if the buyer has accepted the goods, the buyer cannot reject them later and claim a refund; instead, the buyer’s remedy is limited to a claim for damages.
Explain the significance/purpose of the Sale of Goods Act 1979
The Sale of Goods Act 1979 is significant because it:
Establishes clear legal guidelines for the sale of goods, which are essential for both consumer protection and business transactions.
Implies key terms into contracts for the sale of goods, such as the requirement for goods to be of satisfactory quality, as described, and fit for purpose.
Provides remedies for buyers when these terms are breached, such as the right to reject the goods and claim a refund, or to claim damages.
Balances the interests of buyers and sellers by limiting the circumstances under which a buyer can reject goods and by providing a framework for resolving disputes.
The Act has been amended several times since its enactment, reflecting changes in commercial practices and consumer protection needs. It remains a cornerstone of English commercial and consumer law.
Explain the Goods and services Act 1982 and its key provisions/sections
The Supply of Goods and Services Act 1982 is another crucial piece of legislation in the UK that governs contracts in which goods are transferred or services are provided in exchange for a monetary payment. It implies certain terms into contracts to ensure fairness and quality in the provision of goods and services.
Section 3: This section implies a term into the contract that the supplier will carry out the service with reasonable care and skill.
Section 4(2): This subsection implies a term that, where the time for the service to be carried out is not fixed by the contract, it must be carried out within a reasonable time.
Section 4(5): This subsection states that the determination of what is a ‘reasonable charge’ should take into account the nature of the service provided and, if the service was performed in an emergency, any additional expense incurred because of the emergency.
Section 13: This section implies a term into contracts for the transfer of goods where the transfer is by description, that the goods will correspond with the description.
Section 14: This section implies a term that goods supplied under a contract for the transfer of goods will be of satisfactory quality, taking into account any description of the goods, the price, and all other relevant circumstances.
Section 15: This section implies a term into contracts for the transfer of goods by sample, that the bulk will correspond with the sample in quality, and that the buyer will have a reasonable opportunity to compare the bulk with the sample.
Explain the signficance/purpose of the Sale of Goods Act 1982
The Supply of Goods and Services Act 1982 is significant for several reasons:
Consumer Protection: It provides consumers with statutory rights when buying goods and services, ensuring they get what they pay for.
Quality Assurance: It sets a minimum quality standard for goods and services by implying terms into contracts about satisfactory quality, fitness for purpose, and correspondence with description or sample.
Legal Clarity: It clarifies the legal position in transactions involving the supply of goods and services, which is beneficial for both consumers and businesses.
Dispute Resolution: It offers a framework for resolving disputes between consumers and suppliers, which can be used in court if necessary.
Business Standards: It encourages businesses to maintain high standards in the provision of goods and services to avoid legal disputes and maintain a good reputation.
The Act covers a wide range of transactions and is an essential part of UK commercial and consumer law, complementing other legislation such as the Sale of Goods Act 1979. It helps to ensure that suppliers provide goods and services that meet certain standards and that consumers have recourse if these standards are not met.
NOTE: These Acts do not apply to contracts between traders and consumers (which are now governed by the Consumer Rights Act 2015
Explain the Consumer Rights Act 2015
n Act to amend the law relating to the rights of consumers and protection of their interests; to make provision about investigatory powers for enforcing the regulation of traders; to make provision about private actions in competition law and the Competition Appeal Tribunal; and for connected purposes.
Covers goods services, digital content, unfair terms etc.
Therefore the Consumer Rights Act 2015 (‘the Act’) merges the consumer protection rules under UCTA 1977 and UTCCR 1999 with the aim of providing increased protection for consumers against unfair terms in a contract.
An unfair term is not legally binding on consumers, and enforcers can also take action to stop you using it.
The Consumer Rights Act 2015 covers the use of unfair terms in consumer contracts. Consumer contracts are those between traders and consumers (although this does not include employment contracts). As well as terms in consumer contracts, the Act applies to certain consumer notices, whether they are in writing or not
Explain the The Unfair Contract Terms Act 1977 (‘UCTA’ 1977)
The Unfair Contract Terms Act (UCTA) 1977 regulates contracts by limiting the extent to which one party can avoid liability through use of exclusion clauses such as disclaimers.
Its defined as an Act to impose further limits on the extent to which under the law of England and Wales and Northern Ireland civil liability for breach of contract, or for negligence or other breach of duty, can be avoided by means of contract terms and otherwise, and under the law of Scotland civil liability can be avoided by means of contract terms
It applies to exclusion terms within the majority of contracts, including notices that would bring into existence contractual obligations. Despite its name, the UCTA does not subject any other types of terms to a test of fairness
Terms that are subject to the UTCA:
The UTCA applies to contracts made in the course of business. It therefore excludes contracts made between individuals. In addition, it does not apply to:
- contracts of employment
- contracts concerning interests in land and real property
- contracts relating to intellectual property rights
It also governs/ renders ineffective terms and subjects terms to a test of ‘reasonableness’ (the UCTA reasonableness test)
Explain the distinction between the UCTA and the Sales of Goods Act
The UCTA and the Sales of Goods Act
The Sale of Goods Act 1979 states that goods must be of satisfactory quality and suitable for the specific purpose for which they are being sold.
The UCTA applies if one party attempts to limit liability for the requirements under the Sale of Goods Act. Liability cannot be excluded for breach of contract with a consumer, and is subject to a test of reasonableness if the contract is business to business.
Explain the Reasonableness test under the UCTA 1977
“GUIDELINES” FOR APPLICATION OF REASONABLENESS TEST
The matters to which regard is to be had in particular for the purposes of sections 6(3), 7(3) and (4), 20 and 21 are any of the following which appear to be relevant-
(a) the strength of the bargaining positions of the parties relative to each other, taking into account (among other things) alternative means by which the customer’s requirements could have been met;
(b) whether the customer received an inducement to agree to the term, or in accepting it had an opportunity of entering into a similar contract with other persons, but without having to accept a similar term;
(c) whether the customer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties);
(d) where the term excludes or restricts any relevant liability if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable;
(e) whether the goods were manufactured, processed or adapted to the special order of the customer
