Contract terms-Implied terms and the Consumer Rights Act 2015 Flashcards
2 ways terms can be implied in common law.
- Business efficacy and the officious bystander
- By custom or prior dealings between the two parties
Test for business efficacy
Is the term necessary to make the contract effective?
Case for business efficacy test.
The Moorcock (1889)
Facts of The Moorcock (1889).
D signed contract allowing C to use their dock on the Thames.
Both parties knew C’s ship would rest on river bottom at low tide.
River bottom damaged the ship.
Was implied that the ship could rest safely at the dock.
The officious bystander test
Had an officious bystander suggested the term when the 2 parties were negotiating, would both parties have agreed the term was obvious?
In what case was the officious bystander test set out?
Shirlow v Southern Foundries Ltd (1939)
Example case for officious bystander test.
Egan v Static Control Components (2004)
In what case did the Supreme Court clarify the business efficacy and officious bystander test?
Marks and Spencer v BNP Paribas Securities (2015)
Case for implied term by custom.
Hutton v Warren (1836)
Facts of Hutton v Warren (1836).
Local custom meant that at the end of an agricultural lease, a tenant farmer was entitled to an allowance for seed and labour on the land.
The court decided that the terms of the lease must be viewed in the light of this custom.
Case for where prior conduct of the parties might indicate implied terms.
Hillas v Arcos (1932)
What Act shows that terms can be implied by statute?
Consumer Rights Act 2015
Key terms defined in the CRA
Consumer
Trader
Definition of a consumer in the CRA.
An individual acting for the purposes that are wholly or mainly outside that individual’s trade, business, craft or profession.
Which section and sub-section of the CRA is a consumer described by?
Section 2(3)
Which section and sub-section of the CRA described what a trader is?
Section 2 (2)
Definition of trader in the CRA.
A person acting for purposes relating to the person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf.
Which sections of the CRA deal with statutory rights in regards to the provision of products?
S.9
S.10
S.11
6 rules of business efficacy and officious bystander test which were clarified in Marks and Spencer v BNP Paribas Securities (2015).
- Reasonableness is to be tested objectively
- Fairness and acceptability to the parties are not enough
- Requirement for reasonableness and equitableness (fairness) will usually add nothing to other tests
- Business efficacy and officious bystander tests are not cumulative - only one needs to be satisfied
- Officious bystander test may not be straightforward
- Test of necessity for business efficacy involves a value judgement
What right does section 9 talk about?
Right to satisfactory quality
What does s.9 (1) say?
Every contract to supply goods is to be treated as including a term that the quality of the goods is satisfactory.
How is s.9 (2) tested?
Objectively