Contracts - Consumer

Question 0

What are express terms

Answer 0

These are the terms that are agreed by the parties when the contract is made (this does not always mean that the consumer has any control over the terms in the contract because these are usually dictated by the seller anyway).

Question 1

Which three things need to be present if a contract is to be formed?

Answer 1

Agreement - the parties must have reached an agreement (this is one where one person makes a legitimate offer and the other person accepts the offer unconditionally).

Consideration - this is in effect the price that each side is prepared to pay for what is being given to the other side.

Legal Intent - they must intend that the agreement they reach will be enforceable in a court of law.

Question 2

What are the implied terms?

Answer 2

These are not in the contract itself but they are things that are inserted into all the contracts by law (usually following an Act of Parliament. Eg Sale of Goods Act 1979).

Question 3

What are terms?

Answer 3

You can rely on terms and can sue for breach of contract because they are actually incorporated into the contract.

Question 4

What are Mere representations?

Answer 4

You cannot rely on these because they are not part of the contract. They are not important enough.

Question 5

What are misrepresentations?

Answer 5

A misrepresentation occurs when a representation made at or before the time of the contact is falsely stated.
You may be able to get out of the contract or sue for compensation if misrepresentations have wrongly induced you to contract when you would not have done if you had known the truth.

Question 6

Can you rely on opinions in contracts?

Answer 6

No, because the other party’s opinion is no more valid than your own.

Question 7

Can you rely on expert opinions in contracts?

Answer 7

You can rely on expert opinions because these will often be terms. We rely on and should be entitled to rely on the opinions of experts.

Question 8

What are ‘trade puffs’?

Answer 8

These are usually advertising boasts that we shouldn’t take seriously. We cannot rely on these in contracts.

Question 9

What are ‘conditions’?

Answer 9

A condition is a term of a contract which is so important to the contract that failing to carry out a condition would make the contract meaningless and destroy the whole purpose of the contract.

Question 10

If a seller breaches the conditions of the contract, what can the person who is buying do?

Answer 10

1. They can sue for compensation.
2. They can avoid carrying out their own obligations
3. Or both of the above

Question 11

What are warranties?

Answer 11

Warranties are all terms that are not conditions and that do not go to he root of the contract.
They are minor terms of the contract or those where in general the contract could continue despite them being breached.

Question 12

Terms are divided into two types depending on their importance. What are they.

Answer 12

1. Conditions

2. Warranties

Question 13

What is an exclusion clause?

Answer 13

An exclusion clause is a term in a contract where the seller is trying to avoid liability for any breaches of the contract or for negligence.

Question 14

What is a limitation clause?

Answer 14

A limitation clause is one where the seller is trying to reduce the amount of damages he has to pay.

Question 15

Why do people often prefer written contracts?

Answer 15

We are generally bound by contracts that we have signed and it is therefore easier to prove that someone has agreed to the terms that are written down and the person has signed up to.

Question 16

Why have judges developed controls on the use of exclusion clauses ?

Answer 16

Judges have developed controls on the use of exclusion clauses because of their potential unfairness to consumers.

Question 17

What would a seller have to demonstrate that they have done for an exclusion clause to be valid?

Answer 17

1. They must show that the party subject to the clause was aware of it at the time of entering the contract.
2. They must show that they did enough to make the consumer aware of the clause.

Question 18

What was the purpose of introducing The Unfair Contract Terms Act 1977?

Answer 18

• The UCTA was introduced to comply with EU law.
• it limits the use of exclusion clauses
• The Act applies to exclusions of tort damage (negligence) as well as contractual damage.

Question 19

In what ways does the Unfair Contract Terms Act 1977, protect consumers?

Answer 19

1. Distinguishes between consumer purchases and inter-business deals.
2. Makes some types of exclusion invalid (unenforceable against a consumer).
3. Makes other types of exclusion clause enforceable only if they are reasonable .
4. Creates test of what is reasonable.

Question 20

How does the UCTA 1977 distinguish between consumer and inter-business contracts?

Answer 20

1) the one person (the consumer) does not make the contract in the course of a business.
2) the other party does make the contract in the course of a business.
3) the goods passing under the contract are of the type ordinarily supplied for private use or consumption.

Question 21

Which type of exclusions are invalid against a consumer under the UCTA 1977?

Answer 21

1) no exclusion of liability for death or personal injury caused by the seller’s negligence (s2(1)).
2) no exclusion of liability by reference to the terms of a guarantee in respect of defects caused by negligence in the manufacture or distribution of the goods (s5(1)).
3) no exclusion of liability for breaches of the implied terms of Sale of Goods Act and Supply of Goods and Services Act.

Question 22

Which types of exclusion clause does the UCTA say are only enforceable against the consumer if they are reasonable?

Answer 22

1) a clause excluding liability for loss (other than death and personal injury) caused by the negligence of the party inserting it will only be enforced if it is reasonable.
2) where a person contracts as a consumer, or deals on the other party’s standard business forms, a clause excluding liability for breach of contract, or for substantially different performance, or for no performance at all is not enforceable unless inclusion of the clause was reasonable.

Question 23

How has the UCTA 1977 strengthened consumer protection?

Answer 23

1. It removed some inequalities in bargaining strength between consumers and the businesses they buy from.
2. It made some of the most unfair exclusion invalid (unenforceable).
3. It introduced a test of reasonableness in respect of some other types of clauses.

Question 24

What are the criticisms of the UCTA 1977?

Answer 24

1. It does not cover all exclusion clauses.
2. It is mainly restricted to exclusion clauses.
3. It ignores a lot of unfair terms that consumers may find in contracts that they make.
4. It is limited in scope and application.

Question 25

How is the Unfair Terms in Consumer Contracts Regulations 1999 different from the UCTA 1977?

Answer 25

1. The regulations cover contractual terms in general and not only exclusion clauses.
2. The regulations only cover consumer contracts not inter-business contracts.
3. The definition of seller and consumer are different.

Question 26

How are sellers and consumers defined under The Unfair Terms in Consumer Contracts Regulations 1999.

Answer 26

A seller is defined as ‘any person who sells or supplies goods or services and who in making a contract is acting for purposes which are related to his business.’

A consumer is defined as ‘any natural person who is acting for purposes outside his trade, business or profession.’